Vanguard, which has US$5.3 trillion in global assets under management (AUM), has launched the Vanguard Global Credit Bond Fund, an actively managed fund to provide investors with diversified exposure to US and international investment-grade credit.
The firms says the fund is actively managed to represent the global credit universe, which is comprised of USD-denominated (~65%) and non-USD-denominated (~35%, developed and emerging markets) investment grade securities, including those issued by corporate and noncorporate credit entities. The majority of the non-USD-denominated portfolio is hedged to the US dollar to preserve the fund’s credit focus.
Vanguard Fixed Income Group serves as the fund’s advisor and focuses on identifying relative value across multiple countries, yields, currencies, credit ratings, and cost bases. The fund’s investment strategy employs a fundamental approach to identifying relative value based on security selection, sector allocation, and interest rate views.
The global team is 175 strong and is responsible for the oversight of $1.3 trillion in AUM. The fund is managed with Daniel Shaykevich and Samuel Martinez as portfolio managers. It adds to the firms existing 25 actively-managed fixed income funds, Vanguard having launched its first internally managed active fixed income fund in 1982 and the first bond index fund in 1986.
The firm offers a range of low-cost actively managed bond funds, featuring an average asset weighted expense ratio of 0.11%. The new fund offers ‘investor shares’ with an expense ratio of 0.35% and ‘Admiral Shares’ with an expense ratio of 0.25%. Citing data provider Morningstar, Vanguard reports the asset-weighted average expense ratio of active funds in the world bond category is 0.65%.