It is an actively managed fund from the noted index fund pioneer.
Vanguard Group, the second largest manager of exchange-traded funds (ETFs) with about $3.2 trillion in assets under management, launched a new actively managed ETF this week.
The new fund seeks to capitalize in the surge of inflows into fixed income ETFs. According to ETF research firm ETFGI, fixed income ETFs attracted $25.6 billion in net inflows in May in the U.S., compared to $24.5 billion for equity ETFs.
The launch from Vanguard is the Vanguard Multi-Sector Income Bond ETF (NYSE:VGMS), which is an actively managed fixed income ETF.
The ETF, which debuted on June 9, seeks to provide broad diversification across the fixed income spectrum, investing in U.S. Treasuries, investment grade bonds, corporate bonds, emerging-market bonds, and structured products.
The fund managers look to outperform the benchmark through security selection, sector allocation, and duration decisions. The fund is designed to add total return while generating higher income.
“VGMS seamlessly integrates institutional-grade active investment strategies with Vanguard’s hallmark of low-cost leadership, delivering a powerful and differentiated solution for advisors and investors navigating today’s complex and fast-evolving markets,” Sara Devereux, global head of Vanguard Fixed Income Group, said. “Our seasoned portfolio managers employ a rigorous top-down and bottom-up investment process, ensuring every security is meticulously evaluated and executed with precision and purpose.”
Vanguard’s seventh actively managed bond fund
Vanguard has a stable of 32 fixed income ETFs and this is its seventh actively managed fixed income ETF for the company that was a pioneer index funds.
This ETF is currently trading at about $50 per share.
The fund is managed by vanguard veteran fixed income managers Michael Chang, Arvind Narayanan, and Daniel Shaykevich.
“Active fixed income ETFs are increasingly favored by advisors and clients for their low costs, tax efficiency, and potential to add diversification and alpha to portfolios,” Amma Boateng, managing director and head of Vanguard Financial Advisor Services, said. “VGMS pairs these features of an ETF with Vanguard’s experienced team and proven process to seek outperformance in higher-yielding sectors of the bond market.”
This ETF has an expense ratio of 0.30%.
