The funds, which expand Vanguard’s bond index family to 12, also offer Signal shares with estimated expense ratios of 0.15% and Institutional shares with expense ratios of 0.09%, according to a press release.
The funds and the benchmarks they seek to track are as follows:
Fund (ETF Ticker)
Barclays Capital Index
Vanguard Short-Term Government Bond Index Fund (VGSH)
U.S. 1–3 Year Government Float Adjusted Index
Vanguard Intermediate-Term Government Bond Index Fund (VGIT)
U.S. 3–10 Year Government Float Adjusted Index
Vanguard Long-Term Government Bond Index Fund (VGLT)
U.S. Long Government Float Adjusted Index
Vanguard Short-Term Corporate Bond Index Fund (VCSH)
U.S. 1–5 Year Corporate Index
Vanguard Intermediate-Term Corporate Bond Index Fund (VCIT)
U.S. 5–10 Year Corporate Index
Vanguard Long-Term Corporate Bond Index Fund (VCLT)
U.S.Long Corporate Index
Vanguard Mortgage-Backed Securities Index Fund (VMBS)
U.S. MBS Float Adjusted Index
“Vanguard’s expanded fixed income lineup provides greater choice and more price competition in the market, and offers financial advisers and institutions more flexibility to tailor the credit quality and duration of their bond exposure,” said Gus Sauter, Vanguard’s chief investment officer, in the press release.
Vanguard noted that unlike a conventional bond index fund, a bond ETF can trade at a substantial premium or discount to its net asset value based on overall supply and demand of bonds in the market. The firm published an article in the autumn 2009 edition of its shareholder newsletter – “The choice between ETFs and conventional fund shares” – that examines the similarities and differences between the two products. Investors may request a free copy of the newsletter by calling 877-662-7447, or read it at www.vanguard.com/share-choices .
The new bond index funds will be managed by the Vanguard
Fixed Income Group, which oversees nearly $485 billion in assets, including
$114 billion in bond index fund assets and $10.4 billion in bond ETF assets.