The new funds offer investors regional exposure to US and European corporate bonds, US Treasuries, and euro-denominated debt issued by governments based in the Eurozone.
According to research and consultancy firm ETFGI, the new regional portfolio building blocks will be the lowest-cost route for accessing these types of fixed income ETF strategies, carrying an ongoing charge of 0.12%.
Ken Volpert, head of investments for Vanguard in Europe, said: “Today’s launch complements Vanguard’s existing range of index mutual funds and ETFs. They will enable investors to build a broadly diversified fixed income and equity portfolio at a low-cost.
“As one of the world’s largest fixed income managers with approximately $900bn (£644.7bn, €817.6bn) in assets globally, Vanguard has a strong track record for managing high-quality, low-cost fixed income funds.”
The new ETFs are in addition to the Vanguard UK Government Bond Ucits ETF, which is already listed on the London Stock Exchange. They will track Barclays indices and are as follows:
Lida Eslami, listed products manager, London Stock Exchange, said: “This listing is testament to London’s continuing status as the pre-eminent European destination for issuers and investors. Total on-exchange turnover of fixed income ETFs on our markets was over £88bn in 2015, up by 84% compared to 2014 – a clear demonstration of the growing appetite for these instruments.”
Vanguard now offers 21 ETFs in the UK and has over $100bn in assets under management across its European mutual fund and ETF range.
The ongoing charges for Vanguard’s European ETF suite range from 0.07% to 0.29%; this compares to an industry average of 0.46% according to Bloomberg.
