VALLEY FORGE, Pa., Aug. 22, 2017 /PRNewswire/ -- Vanguard today
filed a preliminary registration statement with the Securities and
Exchange Commission for a new index portfolio, Vanguard Total
Corporate Bond ETF. The ETF is expected to launch in the fourth
quarter and will offer investors access to the entire U.S.
investment-grade corporate bond market through a single fund.
"The new offering complements our existing lineup of total
market funds and will provide investors with low-cost, broadly
diversified exposure to the U.S. investment-grade corporate bond
market," said John Hollyer, global
head of Vanguard Fixed Income Group.
The fund will be structured as an ETF of ETFs, investing
directly in three existing, low-cost ETFs: Vanguard Short-Term
Corporate Bond ETF (VCSH), Vanguard Intermediate-Term Corporate
Bond ETF (VCIT), and Vanguard Long-Term Corporate Bond ETF
(VCLT).
This approach enables the Total Corporate Bond ETF to achieve
immediate scale by using existing exposure from the underlying
ETFs, and it is expected to result in tighter bid/ask spreads and
lower operating expenses than investing directly in the benchmark's
constituents. Vanguard estimates an expense ratio of 0.07% upon the
ETF's launch.
Vanguard, through its Fixed Income Group, will serve as the
investment advisor to the ETF. The Fixed Income Group manages more
than $350 billion1 of both
active and index corporate bond assets. With $1.2 trillion assets under management, the group
is one of the world's largest bond fund managers and maintains
investment operations in Malvern,
PA; Scottsdale, AZ;
London, England; and Melbourne, Australia.
Vanguard introduced the first bond index fund more than 30 years
ago with the launch of Vanguard Total Bond Market Index Fund. The
firm launched its first bond ETFs in the U.S. in 2007 and has since
expanded its lineup globally.
Vanguard Total Corporate Bond ETF will be the first
U.S.-domiciled bond ETF introduced by the firm since the Vanguard
Tax-Exempt Bond Index ETF (VTEB), which began trading in
August 2015.
"In recent years, we have been building out our ETF lineup to
serve growing demand by our clients abroad," said Greg Davis, Vanguard's chief investment officer.
"Since 2015, we have launched a total of 27 ETFs in Canada, Australia, Hong
Kong, Switzerland, and the
U.K."
Vanguard offers a range of total market funds, including:
- Total Stock Market Index Fund
- Total Bond Market Index Fund
- Total Bond Market II Index Fund
- Total International Stock Market Index Fund
- Total International Bond Market Index Fund
- Institutional Total Stock Market Index Fund
- Total World Stock Index Fund
About Vanguard
Vanguard is one of the world's largest investment management
companies. As of July 31, 2017,
Vanguard managed $4.5 trillion in
global assets. The firm, headquartered in Valley Forge, Pennsylvania, offers more than
371 funds to its more than 20 million investors worldwide. For more
information, visit vanguard.com.
Asset figures as of July 31, 2017,
unless otherwise noted.
1As of June 30,
2017
A registration statement relating to the Vanguard ETF shares
has been filed with the Securities and Exchange Commission but has
not yet become effective. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration
statement becomes effective. This communication shall not
constitute an offer to sell or the solicitation of an offer to buy,
nor shall there be any sale of, these securities in any state in
which such offer, solicitation, or sale would be unlawful prior to
registration or qualification under the securities laws of any such
state.
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