Vanguard ETF will offer exposure to global investment-grade bond universe

May 21, 2018


Vanguard today filed a registration statement with the U.S. Securities and Exchange Commission for the proposed launch of Vanguard Total World Bond ETF during the third quarter of 2018. Vanguard's Fixed Income Group will serve as advisor to the ETF.

The ETF will gain exposure to the global investment-grade bond universe by investing in a combination of Vanguard Total Bond Market ETF (BND) and Vanguard Total International Bond ETF (BNDX) held at the market-capitalization weights of the global bond market.

The Total World Bond ETF will offer a single ETF share class with an estimated expense ratio of 0.09%. As an ETF of ETFs, its direct investment in the existing Vanguard total bond ETFs will enable it to achieve immediate scale and access to the global investment-grade bond market. The ETF will seek to closely match the returns of the benchmark by keeping the expense ratio and transaction costs lower for investors.

"With the Total World Bond ETF, Vanguard will be 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 will be simple, convenient, and highly diversified, with an expense ratio in line with our current low-cost fixed income ETFs."

The Total World Bond ETF will be benchmarked to the Bloomberg Barclays Global Aggregate Float Adjusted Composite Index, which provides a broad-based measure of the global investment-grade fixed-rate debt market, including government, corporate, and securitized bonds, all with maturities of more than one year. As of March 30, 2018, the index comprised approximately 44% U.S. bonds and 56% non-U.S. bonds.

Vanguard has been a pioneer in bond indexing, having launched the first bond index fund, Vanguard Total Bond Market Index Fund, in 1986. Vanguard's Fixed Income Group is one of the world's largest bond fund managers with more than $1.4 trillion under management. Vanguard has been a participant in the ETF industry for more than 17 years, meeting the needs of a diverse set of investors with 77 ETFs that represent more than $746 billion in client assets.*

* Data as of March 31, 2018.


  • A registration statement relating to the Vanguard Total World Bond ETF has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This communication shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, these securities in any state in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
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