Vanguard this week announced the launch of the Vanguard U.S. High‑Yield Corporate Bond Index ETF (VCHY), expanding its fixed income lineup with index‑based exposure to U.S. dollar-denominated high‑yield corporate bonds. The ETF is managed by Vanguard Capital Management’s Fixed Income Group.
“The high-yield market is both sizable and growing in importance within fixed income portfolios, yet much of today’s exposure sits in higher-cost structures,” said Sara Devereux, CIO of Vanguard Capital Management and global head of Vanguard Fixed Income Group, in a statement.
“VCHY expands Vanguard’s ETF lineup with a low-cost, index-based approach to U.S dollar-denominated high-yield corporate bonds, designed to deliver broad, rules-based exposure with a focus on liquidity and precision. It provides investors with a clear and efficient way to help access high yield within a diversified portfolio.”
VCHY seeks to track the Bloomberg U.S. Corporate High Yield 250MM 2% Issuer Capped Index, a market‑value‑weighted benchmark that provides broad exposure to below‑investment‑grade U.S. corporate bonds while limiting issuer concentration. The index includes securities rated below investment grade. With an expense ratio of just 0.05%, at launch VCHY matches the lowest price in its category.
“Investors need access to a range of high-quality, low-cost solutions to help them meet their income and diversification goals,” said Amma Boateng, managing director of Financial Advisor Services. “VCHY reflects our commitment to thoughtfully expanding our fixed income lineup with tools that allow advisors to incorporate high‑yield exposure into client’s portfolios while taking smart risks.”
Vanguard Capital Management’s Fixed Income Group oversees more than $2.9 trillion in global assets and has led bond indexing since launching the world’s first bond index fund in 1986.
Joshua Barrickman and Manuel Hayes serve as the portfolio managers responsible for day‑to‑day management of the fund, each bringing more than two decades of experience in fixed income portfolio oversight.