The long and the short of it: Our new active bond fund

Key takeaways

• Persistent inflation, higher neutral rates and rising deficits are keeping interest rates elevated and bond markets volatile.

• Short-duration bonds can offer income potential, diversification benefits and reduced sensitivity to interest rate moves and rising government debt levels compared with longer-maturity bonds.

• Our new fund extends Vanguard’s active fixed income range, offering short-duration exposure through a disciplined investment process underpinned by our low-cost advantage.

Fixed income investors face a challenging higher-for-longer interest rate environment and elevated yield volatility, driven by persistent inflation pressures, higher neutral rates and rising government deficits.

What it means for fixed income portfolios

Amid this policy uncertainty and associated volatility at the long end of the bond market, short-duration bonds offer income potential and diversification benefits for portfolios - while providing more limited exposure to rate hikes as well as to rising government deficits than longer-maturity bonds.

New active short-duration solution for lower risk tolerances

The new Vanguard Global Short-Term Core Bond Fund gives investors diversified, active exposure to the global short-duration fixed income market. It is designed for portfolio constructors with a lower risk tolerance, who have less appetite for short-term volatility in their portfolios.

The Global Short-Term Core Bond Fund invests primarily in investment-grade, government, corporate and structured short-term fixed income securities, from issuers spanning developed markets and, to a lesser extent, emerging markets. 

Harnessing Vanguard’s active fixed income edge – at low cost

The launch of the Vanguard Global Short-Term Core Bond Fund further aligns our active fixed income solutions line-up with the exposures most commonly used in investor portfolios. Its OCF is just 0.15-0.25%, relative to a peer group average of 0.69%¹.

Key fund features:

• The fund is managed by Vanguard’s Fixed Income Group (FIG), which manages more than $2.9 trillion² in assets globally, making us one of the largest active fixed income managers in the world. 

• The new fund’s lead portfolio managers are Ales Koutny (Head of International Rates) and Sarang Kulkarni (lead portfolio manager for Vanguard’s Global Credit Bond Fund).

• The lead managers also manage the Vanguard Global Core Bond Fund and Vanguard Global Strategic Bond Fund, which reach their one-year anniversaries on 23 July 2026.

• The managers are further supported by the broader resources within FIG (including dedicated teams focused on rates, investment-grade, high-yield and emerging-market credit and structured products).

Vanguard’s active fixed income approach

1. Scale and depth of expertise

Our global team of more than 120 fixed income specialists - including research analysts, portfolio managers and traders – is focused solely on identifying investment opportunities across the entire fixed income spectrum.

2. A disciplined, ‘true-to-label’ approach

We avoid large, directional macro bets, aiming instead for steady, repeatable outcomes over the long term.

3. Cost advantage through scale

As one of the world's largest investment managers, our scale helps drive down costs, and we pass those savings directly to investors through lower fees, giving them a better chance of investment success.

How does the new fund differ to the existing Global Core Bond Fund?

The key points of difference between the new Global Short-Term Core Bond Fund and the existing actively-managed Global Core Bond Fund are that they have distinct portfolio durations and benchmarks, as outlined in the table below.

However, the new fund’s structure resembles that of the existing Global Core Bond Fund and it is actively managed by the same portfolio managers who apply the same investment process and resources. The new fund will also predominantly hold investment-grade debt from developed market issuers, with similar allocations to high-yield (off-benchmark only) and emerging market bonds compared with the existing fund. 

The Global Short-Term Core Bond Fund has a higher allocation to short-term corporate bonds than the Global Core Bond Fund, the latter fund using its higher allocation to Treasury and government-related exposures to manage longer-duration positioning.

Fund comparison

Source: Vanguard, as at 14 July 2026.

¹ Source: Vanguard and Morningstar, as at 30 June 2026. The Ongoing Charges Figure (OCF) covers administration, audit, depository, legal, registration and regulatory expenses incurred in respect of the Funds. Peer group average OCF based on the Morningstar Global Diversified Bond category.

² Source: Vanguard, as at 30 April 2026.

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.

Some funds invest in emerging markets which can be more volatile than more established markets. As a result the value of your investment may rise or fall.

Investments in smaller companies may be more volatile than investments in well-established blue chip companies.

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 may use derivatives in order to reduce risk or cost and/or generate extra income or growth. The use of derivatives could increase or reduce exposure to underlying assets and result in greater fluctuations of the Fund's net asset value. A derivative is a financial contract whose value is based on the value of a financial asset (such as a share, bond, or currency) or a market index. Some funds invest in securities which are denominated in different currencies. Movements in currency exchange rates can affect the return of investments.

For further information on risks please see the “Risk Factors” section of the prospectus on our website.

Important information

This is a marketing communication.

For professional investors only (as defined under the MiFID II Directive) investing for their own account (including management companies (fund of funds) and professional clients investing on behalf of their discretionary clients). In Switzerland for professional investors only. Not to be distributed to the public.

For further information on the fund's investment policies and risks, please refer to the prospectus of the UCITS and to the KIID (for UK, Channel Islands, Isle of Man investors) and to the KID (for European investors) before making any final investment decisions. The KIID and KID for this fund are available in local languages, alongside the prospectus, which is available in English only, via Vanguard’s website.

The information contained herein is not to be regarded as an offer to buy or sell or the solicitation of any offer to buy or sell securities in any jurisdiction where such an offer or solicitation is against the law, or to anyone to whom it is unlawful to make such an offer or solicitation, or if the person making the offer or solicitation is not qualified to do so. The information is general in nature and does not constitute legal, tax, or investment advice. Potential investors are urged to consult their professional advisers on the implications of making an investment in, holding or disposing of "units/shares", and the receipt of distribution from any investment.

For Swiss professional investors: Potential investors will not benefit from the protection of the FinSA on assessing appropriateness and suitability.

Vanguard Investment Series plc has been authorised by the Central Bank of Ireland as a UCITS and has been registered for public distribution in certain EEA countries and the UK. Prospective investors are referred to the Funds' prospectus for further information. Prospective investors are also urged to consult their own professional advisers on the implications of making an investment in, and holding or disposing shares of the Funds and the receipt of distributions with respect to such shares under the law of the countries in which they are liable to taxation.

The Manager of Vanguard Investment Series plc is Vanguard Group (Ireland) Limited. Vanguard Asset Management, Limited is a distributor of Vanguard Investment Series plc.

For Swiss professional investors: The Manager of Vanguard Investment Series plc is Vanguard Group (Ireland) Limited. Vanguard Investments Switzerland GmbH is a financial services provider, providing services in the form of purchase and sales according to Art. 3 (c)(1) FinSA . Vanguard Investments Switzerland GmbH will not perform any appropriateness or suitability assessment. Furthermore, Vanguard Investments Switzerland GmbH does not provide any services in the form of advice. Vanguard Investment Series plc has been authorised by the Central Bank of Ireland as a UCITS. Prospective investors are referred to the Funds' prospectus for further information. Prospective investors are also urged to consult their own professional advisors on the implications of making an investment in, and holding or disposing shares of the Funds and the receipt of distributions with respect to such shares under the law of the countries in which they are liable to taxation.

For Swiss professional investors: Vanguard Investment Series plc has been approved for offer in  Switzerland by the Swiss Financial Market Supervisory Authority (FINMA). The information provided herein does not constitute an offer of Vanguard Investment Series plc in Switzerland pursuant to FinSA and its implementing ordinance. This is solely an advertisement pursuant to FinSA and its implementing ordinance for Vanguard Investment Series plc. The Representative and the Paying Agent in Switzerland is BNP Paribas Securities Services, Paris, succursale de Zurich, Selnaustrasse 16, 8002 Zurich. Copies of the Articles of Incorporation, KID, Prospectus, Declaration of Trust, By-Laws, Annual Report and Semiannual Report for these funds can be obtained free of charge from the Swiss Representative or from Vanguard Investments Switzerland GmbH via our website.

The Manager of the Ireland domiciled funds may determine to terminate any arrangements made for marketing the shares in one or more jurisdictions in accordance with the UCITS Directive, as may be amended from time-to-time.

For investors in Ireland domiciled funds, a summary of investor rights can be obtained and is available in English, German, French, Spanish, Dutch and Italian.

For Dutch investors only:  The fund(s) referred to herein are listed in the AFM register as defined in section 1:107 Dutch Financial Supervision Act (Wet op het financieel toezicht). For details of the Risk indicator for each fund listed, please see the fact sheet(s) which are available from Vanguard via our website.

BLOOMBERG® is a trademark and service mark of Bloomberg Finance L.P. Bloomberg Finance L.P. and its affiliates, including Bloomberg Index Services Limited (“BISL”) (collectively, “Bloomberg”), or Bloomberg's licensors own all proprietary rights in the Bloomberg Indices. The products are not sponsored, endorsed, issued, sold or promoted by “Bloomberg.” Bloomberg makes no representation or warranty, express or implied, to the owners or purchasers of the products or any member of the public regarding the advisability of investing in securities generally or in the products particularly or the ability of the Bloomberg Indices to track general bond market performance. Bloomberg shall not pass on the legality or suitability of the products with respect to any person or entity. Bloomberg’s only relationship to Vanguard and the products are the licensing of the Bloomberg Indices which are determined, composed and calculated by BISL without regard to Vanguard or the products or any owners or purchasers of the products.

Issued by Vanguard Group (Ireland) Limited which is regulated in Ireland by the Central Bank of Ireland.

Issued in Switzerland by Vanguard Investments Switzerland GmbH.

Issued by Vanguard Asset Management, Limited which is authorised and regulated in the UK by the Financial Conduct Authority.

© 2026 Vanguard Group (Ireland) Limited. All rights reserved.
© 2026 Vanguard Investments Switzerland GmbH. All rights reserved.
© 2026 Vanguard Asset Management, Limited. All rights reserved.