Vanguard introduced Vanguard Total Corporate Bond ETF
OREANDA-NEWS. November 13, 2017. Vanguard today introduced Vanguard Total Corporate Bond ETF (VTC), which offers low-cost, broadly diversified exposure to the U.S. investment-grade corporate bond market. The ETF will be managed by Vanguard Fixed Income Group.
"The Total Corporate Bond ETF provides investors with a core portfolio building block and is a welcome addition to Vanguard's diversified lineup of low-cost bond ETFs," said John Hollyer, global head of fixed income.
Bonds can play a key role in diversifying against equity risk in an investor's portfolio. The Total Corporate Bond ETF offers one of the lowest cost single-fund options for investors who seek to capture the risk premium of the broad investment-grade corporate bond market without having to simultaneously make a duration call.
VTC will offer a single ETF share class with an estimated expense ratio of 0.07%.* The ETF will seek to track the Bloomberg Barclays U.S. Corporate Bond Index by investing directly in Vanguard's three maturity-based corporate bond ETFs: Vanguard Short-Term Corporate Bond ETF (VCSH), Vanguard Intermediate-Term Corporate Bond ETF (VCIT), and Vanguard Long-Term Corporate Bond ETF (VCLT).
The ETF-of-ETF structure presents a unique opportunity for Vanguard to offer exposure to the broad investment-grade corporate bond market. The structure also gives VTC immediate scale, which helps it align with Vanguard's corporate philosophy. Economies of scale contribute to savings, which Vanguard passes on to shareholders in the form of low-cost products and low transaction costs.
Vanguard has been a leader in bond indexing since it launched the first bond index fund, Vanguard Total Bond Market Index Fund (VBTIX), in 1986. The Fixed Income Group is one of the world's largest bond fund managers with more than $1.3 trillion under management. Additionally, Vanguard has been among the leaders in the ETF industry for more than 16 years, and currently serves a diverse set of investors with 71 U.S. ETFs that represent more than $800 billion in client assets.