Vanguard to Introduce International Bond Funds

Registration statements have been filed with the U.S. Securities and Exchange Commission for the following funds: Vanguard Total International Bond Index Fund and Vanguard Emerging Markets Government Bond Index Fund.

Vanguard Total International Bond Index Fund will seek to track the investment performance of the Barclays Global Aggregate ex-USD Float Adjusted Index (Hedged). The target benchmark comprises a wide spectrum of more than 7,000 global government, agency, and corporate securities in 57 countries in Asia, Europe, Canada, and South America.

Vanguard Emerging Markets Government Bond Index Fund will seek to track the investment performance of the Barclays Emerging Markets Sovereign Index (USD). The target benchmark features approximately 200 government bonds in 39 countries. By investing solely in U.S. dollar denominated international bonds, the fund will not subject U.S.-based investors to currency risk.  

The Emerging Markets Government Bond Index Fund will offer exposure to a sizable and growing portion of the international fixed income universe. Emerging markets government bonds feature different risk-return characteristics than the aggregate international fixed income market, affording another diversification opportunity.

Vanguard expects to offer both conventional shares (Investor, Admiral, and Institutional) and ETF Shares of the new funds, with estimated expense ratios ranging from 0.30% to 0.50% (as shown in the accompanying table). To help offset the transaction costs associated with international bonds, the Total International Bond Index Fund and the Emerging Markets Government Bond Index Fund will assess purchase fees of 0.25% and 0.75%, respectively, on the conventional shares.