We are introducing a new bond fund to our lineup of active fixed income products: the Vanguard Core-Plus Bond Fund. Designed as an all-in-one bond solution for your overall portfolio, it has a conservative-to-moderate risk profile. You can use it as your sole bond holding or combine it with our other bond funds for a more optimized balance of risk and return.
The fund will launch on October 25. However, you will have the opportunity to invest early during the subscription period that starts on or around October 12th.
Here’s how the new fund fits into our lineup and might fit into your portfolio.
Vanguard Core-Plus Bond Fund seeks to offer:
Our fixed income group will pursue the outperformance of the fund’s benchmark* by investing in carefully selected taxable fixed income securities, including debt from high-yield corporates and emerging markets. Over the past 10 years, over 88% of our actively managed funds outperformed their peer-group average.**
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For nearly 40 years, Vanguard Fixed Income Group has been distinguished in the industry by its deep investment capabilities, disciplined security selection process and rigorous risk management techniques. These experienced fund managers will try to continuously monitor and adjust the fixed income allocation to meet the changing market conditions.
Even with interest rates at historically low levels, bonds still play an important role in your portfolio by helping to add stability to your asset mix. Our Core-Plus Bond Fund will invest in multiple sectors of the fixed income market. As an active, diversified centerpiece of your fixed income allocation, it can potentially add balance to your portfolio — while still aiming for higher yields.
Conservative to moderate risk profile
Core-plus differs from bond funds Vanguard Core Bond Fund By seeking higher performance, especially through increased exposure to riskier bonds such as high-yield corporates and emerging market debt. The returns from its benchmark are expected to have higher volatility and divergence from its benchmark as compared to the core bond fund. Consider how the fund’s high risk level aligns with your personal risk tolerance as a fixed income investor.
With an estimated expense ratio of 0.20% (Admiral™ shares) and 0.30% (investor shares), the Core-Plus bond fund is expected to be less expensive than other funds in the category. The fund’s average asset-weighted expense ratio in the Morningstar Core-Plus bond category was 0.48% as of June 30, 2021.
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*The fund will attempt to outperform the Bloomberg Barclays US Universal Total Return Index.
**For the 10-year period ended June 30, 2021, 7 out of 7 Vanguard Money Market Funds, 39 out of 44 Vanguard Bond Funds, 6 out of 6 Vanguard Balance Funds, and 31 out of 37 Vanguard Stock Funds totaled The 83 for 94 Vanguard Fund outperformed its Lipper peer-group average. Results for other time periods will vary. The comparison only included actively managed funds with a history of at least 10 years. Source: Lipper, Thomson Reuters Company. The competitive performance data shown represents past performance, which is not a guarantee of future results. View most recent fund performance