VALLEY FORGE, Pa., July 29, 2021 /PRNewswire/ -- Vanguard today filed initial registration statements with the U.S. Securities and Exchange Commission to introduce two new active fixed income funds: Vanguard Core-Plus Bond Fund and Vanguard Multi-Sector Income Bond Fund. The funds are designed to meet the needs of clients seeking actively managed "core" and "satellite" bond portfolios and will augment the lineup of higher-alpha, diversified fixed income strategies managed by Vanguard Fixed Income Group.
"Vanguard has invested heavily in active management talent and capabilities for decades, resulting in a lineup of active bond funds that leverage proven portfolio manager expertise and help clients achieve investment success," said Kaitlyn Caughlin, head of Vanguard Portfolio Review Department. "Vanguard's client-centric approach to product development has produced a carefully curated line-up that drives long-term value and meets evolving investor needs."
The new funds represent Vanguard's ongoing efforts to improve investor outcomes through single-fund fixed income strategies with enduring investment merit and low costs. Core-Plus Bond will consist of a broadly diversified portfolio invested primarily in Treasury, mortgage-backed, and other U.S. investment-grade securities. In addition, the fund may invest beyond the U.S. investment-grade bond market in areas such as high-yield corporate securities and emerging markets debt of all credit quality ratings. Core-Plus Bond will be differentiated from Vanguard Core Bond Fund in its incremental flexibility across higher-alpha potential sectors, particularly in its greater exposure to high-yield and emerging markets. The fund will have an estimated expense ratio of 0.30% for Investor Shares and 0.20% for Admiral Shares, compared with an average expense ratio of 0.48% for industry peers1.
Multi-Sector Income Bond will offer exposure primarily to U.S. investment-grade securities, U.S. high-yield corporate securities, and emerging markets debt of all credit quality ratings. Multi-Sector Income Bond will have an estimated expense ratio of 0.40% for Investor Shares and 0.30% for Admiral Shares, compared with an average expense ratio of 0.98% for industry peers1.
Vanguard expects to make Core-Plus Bond available to investors in the fourth quarter of 2021 and Multi-Sector Income Bond available for public investment at a later date.
A global fixed income leader
The fund will be managed by Vanguard's Fixed Income Group, a global team of more than 190 tenured and dedicated professionals overseeing $2.1 trillion. For nearly 40 years, Vanguard Fixed Income Group has been distinguished in the industry by its deep investment capabilities, disciplined security selection process, rigorous risk management techniques and strong long-term performance.
The firm has placed a particular focus on investing in its active bond portfolio management capabilities and product offer, including Vanguard Global Credit Fund, Vanguard Emerging Markets Bond Fund, and Vanguard Core Bond Fund. As a result, Vanguard's track record as a bond manager remains unparalleled—76% of Vanguard fixed income funds and 96% of Vanguard active fixed income funds outperformed their peer group averages over the five years ending June 30, 20212.
Reopening Vanguard Wellington Fund
Vanguard also announced today that, due to improved fund liquidity and capacity, the firm will reopen Vanguard Wellington Fund to all investors immediately. The fund is managed by Wellington Management Company LLP and has been closed to new financial advisory, institutional, and intermediary investors since 2013.
Vanguard dedicates considerable resources to the oversight of its fund lineup, ensuring clients have access to sound, lasting investment products that meet their long-term needs. As part of this process, Vanguard will occasionally close certain funds to protect existing shareholders from high levels of cash flow.
Vanguard is one of the world's largest investment management companies. As of June 30, 2021, Vanguard managed $8.0 trillion in global assets. The firm, headquartered in Valley Forge, Pennsylvania, offers 418 funds to its more than 30 million investors worldwide. For more information, visit vanguard.com.
Asset figures as of June 30, 2021 unless otherwise noted.
1 Source: Morningstar, Vanguard.
2 For the five-year period ending June 30, 2021, 83 of 109 bond funds and 49 out of 51 active bond funds outperformed their peer group averages. Results will vary for other time periods. Only funds with a minimum five-year history were included in the comparisons. (Source: Lipper, a Thomson Reuters Company). Note that the competitive performance data shown represent past performance, which is not a guarantee of future results, and that all investments are subject to risks. For the most recent performance, visit our website at www.vanguard.com/performance.
Registration statements relating to Vanguard Core-Plus Bond Fund and Vanguard Multi-Sector Income Bond Fund have been filed with the Securities and Exchange Commission (SEC) but have not yet become effective. The SEC has not approved or disapproved these securities or passed upon the adequacy of either fund's preliminary prospectus. Any representation to the contrary is considered a criminal offense. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statements become 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, visit vanguard.com 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.
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. Investments in bonds are subject to interest rate, credit, and inflation risk. High-yield bonds generally have medium- and lower-range credit quality ratings and are therefore subject to a higher level of credit risk than bonds with higher credit quality ratings
Investments in securities issued by non-U.S. companies and governments are subject to risks including country/regional risk and currency risk. These risks are especially high in emerging markets.
Vanguard Marketing Corporation, Distributor.