Financial services company Vanguard introduces actively managed bond investment offerings.
In a move to broaden its fixed income offering, Vanguard has launched two new active bond funds: the Global Core Bond Fund and the Global Strategic Bond Fund. These funds are designed to actively manage fixed income core allocations, aiming to generate consistent returns by outperforming their respective benchmarks.
The Global Core Bond Fund focuses on high-quality, lower-risk bonds, serving as a stable core fixed income holding. It primarily invests in investment-grade government, corporate, and structured debt from developed-market issuers. Ales Koutny, Head of International Rates at Vanguard, emphasizes the fund's focus on quality and risk control, using bottom-up fundamental security selection without concentrated macro bets. The fund seeks to outperform the Bloomberg Global Aggregate Index and is suitable for investors seeking core, high-quality fixed income exposure to reduce portfolio volatility. The fund's ongoing charges (OCF) are approximately 0.25% to 0.35%.
On the other hand, the Global Strategic Bond Fund adopts a more flexible and higher-risk approach. It has greater flexibility to invest in high yield and emerging market bonds alongside investment-grade securities. This fund aims to outperform the Bloomberg Multiverse Index, which includes a broader set of bond types including high yield and emerging market debt. The fund is targeted at investors seeking additional returns and willing to accept more risk through exposure to higher yield and emerging market bonds. The fund's ongoing charges are slightly higher at about 0.30% to 0.40% due to its broader asset flexibility.
Both funds are managed by Vanguard’s large Fixed Income Group, leveraging a team-based approach combining fund managers, credit analysts, and traders. This team manages over $2.6 trillion in fixed income under management globally, supporting strong research and execution capabilities.
Ales Koutny, Head of International Rates, and Sarang Kulkarni, lead portfolio manager for Vanguard’s Global Credit and pan-European corporate strategies, will co-manage the new funds. They focus on finding pockets of value through fundamental, "bottom-up" security selection.
In conclusion, the Global Core Bond Fund offers a stable core fixed income holding, while the Global Strategic Bond Fund adopts a more flexible and higher-risk approach, aiming for higher returns by including high yield and emerging market debt components. These new funds join Vanguard’s existing active fixed income funds, including the Global Credit Bond Fund and the Emerging Markets Bond Fund.
The Global Core Bond Fund, with a focus on quality and risk control, primarily invests in fixed income securities from developed market issuers, aiming to outperform the Bloomberg Global Aggregate Index, making it suitable for investors seeking core, high-quality fixed income exposure to reduce portfolio volatility.
The Global Strategic Bond Fund, on the other hand, invests in a broader set of bond types, including high yield and emerging market bonds, alongside investment-grade securities. This fund aims to outperform the Bloomberg Multiverse Index and is targeted at investors seeking additional returns and willing to accept more risk through exposure to higher yield and emerging market bonds.
