Vanguard launches active Ultra-Short Bond ETF
Vanguard has launched its first actively managed bond ETF, managed by its in-house fixed income team, the Vanguard Ultra-Short Bond ETF (VUSB) which offers a low-cost, diversified option for investors seeking income and limited price volatility.
The ETF, which is listed on the Chicago Board Options Exchange (Cboe), has an expense ratio of 0.10 per cent, compared with the average expense ratio for ultra-short-term bond ETFs of 0.22 per cent.
“Vanguard Ultra-Short Bond ETF offers the features of an ETF structure for investors seeking an option for anticipated cash needs in the range of six to 18 months,” says Kaitlyn Caughlin, head of Vanguard Portfolio Review Department. “An ultra-short strategy bridges the gap between money market funds offering a stable share price and short-term bond funds, which are meant for longer investment time horizons.”
Vanguard Ultra-Short Bond ETF offers a similar strategy to that of the USD17.5 billion actively managed Vanguard Ultra-Short-Term Bond Fund, which debuted in 2015. Both the fund and the new ETF invest in diversified portfolios consisting of high-quality and, to a lesser extent, medium-quality fixed income securities, including investment-grade credit and government bonds. The ETF provides investors and advisors the flexibility to trade at intraday market prices and invest by buying one share.
With more than USD2.0 trillion globally in fixed income assets under management, Vanguard today is one of the world’s largest fixed income managers. Vanguard dedicates significant resources to attract and develop investment talent, employs sophisticated investment systems, and develops leading fintech solutions to expand our investment capabilities. Vanguard has offered ETFs since 2001 and seeks to meet the needs of a diverse set of investors. With the addition of Vanguard Ultra-Short Bond ETF, Vanguard now offers 20 US-domiciled fixed income ETFs representing more than USD300 billion in client assets.
Like the existing Ultra-Short-Term Bond Fund, the new ETF is co-managed by Samuel C Martinez, CFA, Arvind Narayanan, CFA, and Daniel Shaykevich. Martinez has been with Vanguard since 2007 and has worked in investment management since 2010. He earned a BS from Southern Utah University and an MBA from The Wharton School of the University of Pennsylvania. Narayanan has worked in investment management since 2002 and has been with Vanguard since February 2019. He earned a BA from Goucher College and an MBA from New York University. Shaykevich, a principal at Vanguard, has worked in investment management since 2001 and has been with Vanguard since 2013. He earned a BS from Carnegie Mellon University.