New short-duration fixed income ETF from Vanguard
23 May 2018 | Topical insights
If your clients are concerned about the potential impact of rising interest rates on their bond portfolio[s], you’ll be interested in the latest addition to our fixed income ETF range.
Investment grade corporate debt exposure
The Vanguard USD Corporate 1-3 Year Bond UCITS ETF is designed to give investors exposure to short-dated investment grade corporate debt denominated in US dollars. Its benchmark is the Bloomberg Barclays Global Aggregate Corporate USD Index 1-3 Year Index.
Vanguard’s experienced investment team and long history of indexing success mean that investors can expect the ETF to track its benchmark index tightly, delivering a similar risk and return profile.
It is listed on the Irish Stock Exchange, with cross-listings in London (GBP and USD, Zurich (CHF) and Frankfurt (EUR).
Efficient duration management
Increasing exposure to shorter maturity bonds (1-3 year) can lower duration in your/your clients’ portfolios, whilst lowering interest rate risk.
With an ongoing charges figure (OCF) of just 0.15%, this ETF continues our track record of offering access to core markets at low cost, helping investors to keep more of their returns.
This launch complements our existing fixed income range, bringing our offering to 7 UCITS ETFs and 15 mutual funds spanning government, corporate and emerging market bonds.
If you would like more information on our bond range, please visit the product page.
Investment Risk Information
The value of investments, and the income from them, may fall or rise and investors may get back less than they invested.
ETF shares can be bought or sold only through a broker. Investing in ETFs entails stockbroker commission and a bid- offer spread which should be considered fully before investing.
The fund may invest in financial derivative instruments that could increase or reduce exposure to underlying assets and result in greater fluctuations of the fund’s net asset value.
Some derivatives give rise to increased potential for loss where the fund’s counterparty defaults in meeting its payment obligations.
Funds investing in fixed interest securities carry the risk of default on repayment and erosion of the capital value of your investment and the level of income may fluctuate. Movements in interest rates are likely to affect the capital value of fixed interest securities. Corporate bonds may provide higher yields but as such may carry greater credit risk increasing the risk of default on repayment and erosion of the capital value of your investment. The level of income may fluctuate and movements in interest rates are likely to affect the capital value of bonds. The fund invests in securities which are denominated in different currencies. The value of these investments may fall or rise as a result of change in exchange rates.
Please also read the risk factors section in the prospectus which is available on the Vanguard website.
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