Vanguard this week announced the launch of two fixed income index exchange-traded funds (ETFs) designed to offer flexibility.
The Vanguard Ultra-Short Treasury ETF (VGUS) and the Vanguard 0-3 Month Treasury Bill ETF (VBIL) will be managed by Vanguard Fixed Income Group veteran, Josh Barrickman, co-head of Fixed Income Group Indexing in the Americas.
“These new ultra-short Treasury products serve as valuable tools for advisors and investors to build more precise and flexible portfolios, bridging the gap between money market funds and existing ultra-short-term bond offerings in the ETF wrapper,” said Sara Devereux, global head of Vanguard Fixed Income Group. “VGUS and VBIL reflect our drive to provide investors with a more diverse product range and complement our existing line-up of active and passive funds with Vanguard’s signature low-costs and management expertise.”
Serving as part of investors’ liquidity toolkit, the pair of new ETFs will offer exposure to U.S. Treasury securities, have short durations and low volatility, and are expected to have tight bid-ask spreads. VGUS will track the Bloomberg Short Treasury Index, which includes U.S. Treasury Bills, Notes, and Bonds with less than 12 months until maturity. VBIL will track the Bloomberg US Treasury Bills 0-3 Months Index. Both ETFs will have an estimated expense ratio of 0.07%, positioning each ETF as a low-cost leader in its respective category.
Vanguard Fixed Income Group will advise the new ETFs. The group has been managing index funds since 1986, when it launched Vanguard Total Bond Market Index Fund, also known as one of the world’s first bond index funds.
The new products come as the company revealed lower expense ratios earlier this month. On Feb. 1, the company lowered expense ratios across more than 40% of its funds across share classes—meaning reductions to 168 mutual fund and exchange-traded share classes across 87 funds.
Vanguard Fixed Income Group currently holds $2.5 trillion in global assets under management.
SEE ALSO:
‘Historic’ Expense Ratio Reduction at Vanguard as of Feb. 1
J.P. Morgan Asset Management Unveils New Active ETF
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. She is originally from Queens, New York, but now resides in Denver, Colorado.
