VALLEY FORGE, Pa., Nov. 9, 2017 /PRNewswire/ -- Vanguard today
launched Vanguard Total Corporate Bond ETF (VTC), expanding its
U.S. fixed income fund roster to 17 ETFs and 51 indexed and
actively managed mutual funds. The fund offers investors low-cost
exposure to the broad U.S. investment-grade corporate bond market
through a single fund.
"The Total Corporate Bond ETF provides investors with a core
portfolio building block and is a welcome addition to Vanguard's
diversified lineup of low-cost bond ETFs," said John Hollyer, global head of Vanguard Fixed
Income Group.
The new fund seeks to track the Bloomberg Barclays U.S.
Corporate Bond Index and trades on the NASDAQ stock exchange with
an expense ratio of 0.07%1. It is structured as an ETF
of ETFs, investing directly in Vanguard's three existing, low-cost
corporate bond ETFs: Vanguard Short-Term Corporate Bond ETF (VCSH),
Vanguard Intermediate-Term Corporate Bond ETF (VCIT), and Vanguard
Long-Term Corporate Bond ETF (VCLT).
The ETF of ETFs structure enables the fund to immediately access
more than 5,500 U.S. corporate bonds by taking advantage of the
existing exposure and scale offered by the underlying ETFs. This
approach achieves near complete replication of the benchmark at the
fund's inception as well as tighter bid/ask spreads and lower
operating expenses than investing directly in the benchmark's
constituents.
Evaluating ETFs beyond expenses
Low costs are a critical component to long-term investment
success. Vanguard continues to be the industry's across-the-board
cost leader: 99% of Vanguard's US-domiciled mutual funds fall
within the industry's lowest cost decile and 99% of Vanguard's
US-domiciled ETFs fall within the lowest cost quartile of all
ETFs2.
While the expense ratio is a meaningful metric in the ETF
evaluation process, Vanguard encourages investors to examine other
factors.
"As mutual fund and ETF costs continue to compress, the relative
benefit to choosing the cheapest fund diminishes," said
Rich Powers, Vanguard Head of ETF
Product Management. "When choosing among similarly priced funds, we
suggest investors consider elements beyond the expense ratio, such
as investment strategy, methodology, tracking difference, spreads,
tax efficiency, and brand."
Vanguard: a fixed income leader
Vanguard Fixed Income Group serves as the investment advisor to
the Total Corporate Bond ETF. The Fixed Income Group manages
approximately $1.3 trillion in assets
and employs more than 150 investment professionals across the
globe. Through September 2017,
Vanguard's global lineup of 111 fixed income mutual funds and ETFs
have experienced more than $125
billion in global cash flow, $30
billion of which has been directed to bond ETFs.
About Vanguard
Vanguard is one of the world's largest investment management
companies. As of September 30, 2017,
Vanguard managed $4.7 trillion in
global assets. The firm, headquartered in Valley Forge, Pennsylvania, offers 376 funds
to its more than 20 million investors worldwide. For more
information, visit vanguard.com.
Asset figures as of September 30,
2017, unless otherwise noted.
1Estimated as of November 9,
2017
2Source: Morningstar, Inc. as of March 31, 2017
For more information about Vanguard funds and ETFs, visit
vanguard.com or call 800-662-7447 to obtain a prospectus or, if
available, a summary prospectus. Investment objectives, risks,
charges, expenses, and other important information about a fund are
contained in the prospectus; read and consider it carefully before
investing. Copies of the final prospectus can be obtained from
Vanguard. Please note that a preliminary prospectus is subject to
change.
Vanguard ETF Shares are not redeemable with the issuing Fund
other than in very large aggregations worth millions of dollars.
Instead, investors must buy and sell Vanguard ETF Shares in the
secondary market and hold those shares in a brokerage account. In
doing so, the investor may incur brokerage commissions and may pay
more than net asset value when buying and
receive less than net asset value when selling.
U.S. Patent Nos. 6,879,964; 7,337,138; 7,720,749; 7,925,573;
8,090,646; and 8,417,623.
Vanguard Marketing Corporation, Distributor of the Vanguard
Funds.
All investing is subject to risk, including the possible loss of
the money you invest.
Diversification does not ensure a profit or protect against a
loss.
Bond funds are subject to the risk that an issuer will fail to
make payments on time, and that bond prices will decline because of
rising interest rates or negative perceptions of an issuer's
ability to make payments.
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SOURCE Vanguard