Vanguard Launches New ETF Suite
Vanguard has launched the Vanguard Target Maturity Corporate Bond ETFs (TMEs or BondBuilder TMEs) suite, a lineup of 10 index ETFs (Vanguard Target Maturity 20xx Corporate Bond ETFs) designed to help investors build more precise and customizable fixed income portfolios.
The new ETF suite provides income solutions that make possible targeted fixed-income maturity exposures. When combined, Vanguard says the TMEs provide an alternative to bond ladders and separately managed accounts (SMAs) for select investors; combining the diversification, liquidity, and trading efficiency of ETFs with the features of defined maturities traditionally associated with individual bonds.
“As investors reassess fixed income’s role in portfolios, there is growing demand for approaches that provide the flexibility and control needed to address an increasingly broad set of investment goals,” said Geoff Parrish, global head of fixed income indexing. “Vanguard BondBuilder™ Target Maturity ETF suite combines the approach of holding bonds to maturity with the benefits of the ETF structure – providing professionally managed, broadly diversified exposure across corporate bond issuers and sectors in an efficient and cost-conscious wrapper.”
Each ETF in the suite has an expense ratio of 0.08%. The funds are designed to help investors manage interest rate risk and credit risk while simplifying portfolio construction across maturity horizons.
The TMEs are managed by Vanguard, through Vanguard Capital Management’s Fixed Income Group Global Bond Indexing team, which oversees a range of established bond ETFs, including Vanguard Short-Term Corporate Bond ETF (VCSH), Intermediate-Term Corporate Bond ETF (VCIT), Long-Term Corporate Bond ETF (VCLT), Total Corporate Bond ETF (VTC), and Total Bond Market ETF (BND).
Joshua Barrickman and Jake Riley serve as the portfolio managers responsible for day-to-day management of the funds, each with more than 20 years of industry experience.
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.