Vanguard Unveils Corporate Bond ETF Suite
Vanguard has launched a new suite of model portfolios constructed using Vanguard Target Maturity Corporate Bond ETFs, a lineup of 10 index exchange-traded funds (ETFs) aimed at helping build more precise and customizable fixed income portfolios.
“Financial advisors are being asked to deliver more personalized outcomes with greater efficiency,” said Amma Boateng, managing director of Financial Advisor Services. “Intuitive and scalable fixed income portfolio construction through target maturity ETFs allows advisors to focus more time on improving client outcomes.”
Each of the four perpetual TME-based bond ladder model portfolios is designed to help investors manage interest rate risk and credit risk.
“BondBuilder model portfolios are another way we’re putting Vanguard’s fixed income expertise to work for advisors—reducing operational complexity while helping them deliver better outcomes to more investors,” said Eve Cout, head of advisor solutions, Financial Advisor Services.
Vanguard will offer four TME bond ladder model portfolios spanning 0-3, 0-5, 0-7, and 0-10-year maturity ranges. Each ladder is constructed using one Vanguard Target Maturity Corporate Bond ETF for each year in the ladder and is equal weighted across maturity rungs, consistent with traditional bond ladder construction.
Approaching the maturity of the earliest-dated ETF, assets will be reallocated to the next furthest-dated ETF for the respective ladder, maintaining a perpetual ladder structure without the need to buy individual bonds.
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with nearly a decade of experience and a passion for telling stories and reporting news.