Vanguard Announces the Launch of the Vanguard Government Securities Active ETF (VGVT), an Actively Managed ETF, and Two Indexed ETFs: Vanguard Total Treasury ETF (VTG) and Vanguard Total Inflation-Protected Securities ETF (VTP). All are managed by the firm’s fixed income team.
“The actively managed ETF VGVT leverages our fixed income expertise to offer a flexible, high-quality portfolio of U.S. government and agency bonds, along with select securitized credit,” stated Roger Hallam, Global Head of Rates at Vanguard Fixed Income Group, in a press release.
“VGVT is designed to serve as a resilient core fixed income position, capable of adapting to changing market conditions while maintaining the diversification and risk-buffering qualities investors expect from Treasuries. It’s an attractive option for those looking to balance their equity exposure and pursue long-term stability through active management,” he added.
Strategy Details
The new VGVT vehicle from the firm aims to outperform the broad U.S. Treasury bond market while retaining the diversification benefits such bonds offer. Its expense ratio is 0.10%, and it becomes the eighth actively managed ETF in the firm’s fixed income lineup.
VTG, in turn, further strengthens Vanguard’s offering of indexed fixed income ETFs, providing a low-cost solution for broad exposure to the U.S. Treasury bond market—the largest and most liquid fixed income segment. It has an expense ratio of 0.03%, facilitating access to the full yield curve.
Lastly, VTP offers long-term investors a robust tool designed to protect their portfolios from inflation risk. It provides exposure to the full spectrum of the U.S. Treasury Inflation-Protected Securities (TIPS) market, complementing the existing Vanguard Short-Term Inflation Protected ETF (VTIP).
The vehicle features a broader investment universe and a longer duration profile and is being launched with an expense ratio of 0.05%. According to the firm, it is a valuable addition for those seeking long-term inflation protection.
Track Record and Expertise
VTG and VTP reflect Vanguard’s decades of experience in Treasury markets and inflation-protected investment vehicles, the ETF house emphasizes. Both ETFs provide access to Vanguard’s fixed income index team through comprehensive solutions for two key market segments.
With the launch of these three strategies, the total number of fixed income ETFs offered by Vanguard Fixed Income Group rises to 36, of which 28 are indexed.
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