Vanguard Introduces Low-Cost Total World Bond ETF

VALLEY FORGE, PA (September 6, 2018) – Vanguard today launched Vanguard Total World Bond ETF (BNDW), the industry’s first U.S.-domiciled index ETF offering investors access to the global investment-grade bond universe in a single fund. The new ETF trades on Nasdaq and seeks to track the Bloomberg Barclays Global Aggregate Float Adjusted Composite Index. It has an estimated expense ratio of 0.09%.1

The fund is structured as an ETF of ETFs, investing directly in two Vanguard building-block bond ETFs: Vanguard Total Bond Market ETF (BND) and Vanguard Total International Bond ETF (BNDX). This structure enables the Vanguard Total World Bond ETF to achieve immediate scale by using existing exposure from the underlying ETFs and is expected to result in tighter bid/ask spreads and lower operating expenses than investing directly in the benchmark’s constituents. The approach is similar to Vanguard Total Corporate Bond ETF (VTC), which launched in November, 2017, and invests in Vanguard’s existing short-, intermediate-, and long-term corporate bond ETFs.

“With BNDW, Vanguard is the first firm to offer U.S. investors a single index product with exposure to the entire global investment-grade bond universe,” said Vanguard Chief Investment Officer Greg Davis. “It’s a simple, convenient, and low-cost way to obtain the diversification benefits offered by bonds of many countries and issuers.”

Vanguard’s Fixed Income Group is the investment advisor to Vanguard Total World Bond ETF. Vanguard is one of the world’s largest bond fund managers with $1.4 trillion in assets under management and more than 175 investment professionals across the globe. Through June 2018, Vanguard’s global lineup of 131 fixed income mutual funds and ETFs have experienced more than $54 billion in global cash flow. Vanguard is a pioneer in bond indexing, having launched the first bond index fund, Vanguard Total Bond Market Index Fund (VBTLX), in 1986.

ETF tandem offers low-cost global diversification

Vanguard Total World Bond ETF may also serve as a complement to Vanguard Total World Stock ETF (VT) in investors’ portfolios. VT is Vanguard’s global equity index offering and the industry’s largest global equity ETF at more than $12.4 billion in assets. By combining these two ETFs, investors can now achieve a globally diversified portfolio of more than 20,000 stocks and bonds at an estimated asset-weighted expense ratio of less than 10 basis points.

Low costs across-the-board

For more than 40 years, Vanguard has been driving down the cost of investing. BNDW is another example of Vanguard’s continued commitment to lowering the cost of investing across our entire lineup of mutual funds and ETFs – stock and bond, index and active. Vanguard’s complex-wide asset-weighted average expense ratio of 0.11% remains unmatched by competitors in the industry.

Vanguard also encourages investors to consider the all-in costs of their relationship with an investment provider, including the explicit costs of investing, trading commissions, and receiving advice. As part of Vanguard’s ongoing efforts to reduce these costs, it recently launched the industry’s largest commission-free ETF platform. Vanguard Brokerage clients now have access to nearly 1,800 commission free ETFs, which will reduce costs for initial ETF investments as well as strategies such as dollar-cost averaging, rebalancing, and harvesting losses for tax purposes.

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About Vanguard
Vanguard is one of the world’s largest investment management companies. As of July 31, 2018, Vanguard managed $5.2 trillion in global assets. The firm, headquartered in Valley Forge, Pennsylvania, offers 401 funds to its more than 20 million investors worldwide. For more information, visit vanguard.com.

Asset figures as of July 31, 2018, unless otherwise noted. 

1Estimated as of September 6, 2018

For more information about Vanguard funds and ETFs, visit vanguard.com or call 800-662-7447 to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information about a fund are contained in the prospectus; read and consider it carefully before investing. 

Vanguard ETF Shares are not redeemable with the issuing Fund other than in very large aggregations worth millions of dollars. Instead, investors must buy and sell Vanguard ETF Shares in the secondary market and hold those shares in a brokerage account. In doing so, the investor may incur brokerage commissions and may pay more than net asset value when buying and receive less than net asset value when selling.

U.S. Patent Nos. 6,879,964; 7,337,138; 7,720,749; 7,925,573; 8,090,646; and 8,417,623.

Vanguard Marketing Corporation, Distributor of the Vanguard Funds. 

All investing is subject to risk, including the possible loss of the money you invest. 

Diversification does not ensure a profit or protect against a loss. 

Bond funds are subject to the risk that an issuer will fail to make payments on time, and that bond prices will decline because of rising interest rates or negative perceptions of an issuer's ability to make payments. Investments in bonds issued by non-U.S. companies and governments are subject to risks including country/regional risk and currency risk.