Are you backed by institutional quality bonds?
For advisors who want elite performance from their fixed income funds.
Vanguard's fixed income advantage
We’re working to shift the balance with institutional quality1 bond funds you can offer to all your clients—funds that are built by a deep bench of experts to deliver consistent results. Funds with a performance and cost multiplier that typically only the largest investors can attain. Funds that have diverse sources of active performance. Funds that level the playing field. With Vanguard as your partner, your clients get a record of consistent outperformance in fund after fund, year after year, to a degree uncommon in our industry.
Our formula for institutional quality
Four pillars. One uncompromising standard.
Our formula to achieve institutional quality rests on four essential pillars: deep expertise, consistent performance, bold idea-sharing across portfolios, and a performance and cost multiplier. Explore the strength behind each pillar—and the results they drive.
Bonds can act as ballast of a resilient portfolio, helping to provide steady, smooth performance. While some managers claim to achieve outsized returns, their higher-risk strategies often lead to volatile performance more akin to equities. Our high-information-ratio strategies seek greater reliability. Instead of making concentrated bets, our managers partner with our researchers to spot opportunities at the security-picking level to help deliver repeatable returns for clients.
We set the industry standard for consistency. That means consistent outperformance through different market cycles—just as your clients expect.
Outperformance when it matters most
Our $1 trillion in actively managed fixed income assets consistently delivered smoother alpha than other firms across a growing product lineup of 84 funds.2
Source: Vanguard, based on data from Morningstar, Inc.
Note that the competitive performance data shown represent past performance, which is not a guarantee of future results, and that all investments are subject to risks. For the most recent Vanguard fund performance, visit our website at www.vanguard.com/performance.
Many other firms talk about the independent strength of their portfolio managers. They encourage each team to pursue unique exposures and unique strategies that are often fiercely guarded even within the same firm. This can lead to many of their funds posting underwhelming performance, even amid a few so-called “star funds.”
Our approach is different. Our mission is outperformance across the full lineup. We believe our best active strategies should be shared across our portfolio management teams, ensuring that all your clients benefit from our best thinking. As a result of sharing our best ideas, 92% of our active bond funds and ETFs outperformed their peer group averages over the last decade.3 Only half of competitive funds do.4 It's also how we achieve unrivaled consistency compared to other firms.
Over a decade of rolling 3-year periods, the majority of Vanguard’s active bond funds consistently beat their peers—far more than any competitor.
Sources: Vanguard calculations using data from Morningstar, as of June 30, 2025.5
Note that the competitive performance data shown represent past performance, which is not a guarantee of future results, and that all investments are subject to risks. For the most recent Vanguard fund performance, visit our website at www.vanguard.com/performance.
We’re built to achieve consistent outperformance. The bond market is too complex for a mythical “star manager” to succeed over time. Navigating safely, year after year, requires expertise in interest rates, credit risk, macro-economics, bank policy, sector trends, geographic risk, and re-investment risk. Not to mention the teams to manage the technology, clean the data, develop better models, and analyze the results. No one individual or small team can keep up. Our unique scale allows us to invest across sectors, maturities, and geographies, and utilize a wide range of strategies in security selection, sector allocation, and risk management.
That’s why Vanguard has a team of over 200 experts, whose expertise includes:
Source: Vanguard, as of March 31, 2025.
Our leading returns are accelerated by an industry advantage that sets us apart from other firms: a performance and cost multiplier. The disciplined work of our talented team is amplified by the fact that all our active bond funds are in the lowest cost decile of their Morningstar category.6 High fees at other firms drive bad behaviors like performance-chasing. Vanguard’s portfolio managers, in contrast, have more freedom to maneuver. When the opportunity set is strong, we take as much or more risk than our peers. When it’s poor, we take less. That’s discipline that delivers.
Source: Vanguard and Morningstar, Inc., as of December 31, 2024.
Sara Devereux, Vanguard’s global head of fixed income
"We aim to take the right risk, at the right time, in the right size. Unlike our high-fee competitors who may feel pressure to be fully risk-on all the time, we have the flexibility to adapt to changing market conditions, scaling back when the opportunity set isn’t strong and scaling up when the risk-reward is more attractive. Our rigorous approach to security selection allows us to grind out alpha opportunities day-in and day-out, across all market regimes. Taken together, this helps lead to consistent results over the long-term."
For clients seeking institutional quality bond funds, these funds stick to high-quality7 bonds and can help manage risk.
Give your clients an edge
A full suite of institutional quality fixed income funds and ETFs await them.
Disclosures and footnotes
1 “Institutional quality” in this context is meant to convey a level of professional rigor and expertise combined with low costs.
2 Vanguard, March 31, 2025.
3 For the 10-year period ended June 30, 2025, 44 of 48 Vanguard active bond funds outperformed their peer group averages; results will vary for other time periods. Only funds with a minimum 10-year history were included in the comparison (source: LSEG Lipper). Note that the competitive performance data shown represent past performance, which is not a guarantee of future results, and that all investments are subject to risks. For the most recent performance, visit our website at advisors.vanguard.com/investments/all.
4 Vanguard calculations using LSEG Lipper data, as of March 31, 2025.
5 Outperformance is based upon monthly rolling three-year returns of ETFs and mutual funds from July 1, 2015, to June 30, 2025, compared to their Morningstar category performance for the same period. Each share class of a fund is represented individually as a unique fund' for performance comparisons. Morningstar category performance is calculated as an average across the funds. The firms in the chart are the top 20 by active fixed income mutual fund and ETF AUM, with at least five funds, as of June 30, 2025. It includes the firm's active fixed income mutual funds or ETFs open as of June 30, 2025. Funds launched after July 1, 2012, are included in the calculations based upon the first month the fund reached three years of performance track record.
6 All competitor fund data sourced from Morningstar Direct as of November 2024. The combination of Morningstar category, investment type, and management style define Vanguard's category. Lowest decile expense ratios are calculated excluding Vanguard funds. Vanguard's updated expense ratios (effective February 1, 2025) were compared to the lowest decile expense ratios in each category. Summing all active fixed income funds that were less than or equal to the lowest decile expense ratio and dividing by total active fixed income funds resulted in 100% of funds in the lowest cost decile.
7. High-quality fixed income securities are those rated the equivalent of A- (also described as A3) or better by an independent rating agency or, if unrated, are determined to be of comparable quality by the Fund’s advisor.
All investing is subject to risk, including possible loss of the money you invest.
For more information about Vanguard funds and Vanguard ETFs, visit advisors.vanguard.com to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information 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.
Bond funds are subject to interest rate risk, which is the chance bond prices overall will decline because of rising interest rates, and credit risk, which is the chance a bond issuer will fail to pay interest and principal in a timely manner or that negative perceptions of the issuer's ability to make such payments will cause the price of that bond to decline.