Total portfolio solutions

Vanguard Core and Core-Plus active ETFs are designed to serve as the centerpiece of client portfolios.

Employees walking down the company corridor

Why active for broad bond market exposure

Fixed income markets are complex with a tremendous number of outstanding bonds across a wide range of issuers. As such, fixed income benchmarks do not cover the full universe of outstanding bonds like equity benchmarks do. This deficit creates persistent opportunity for active managers to add value by sourcing bonds from the full market.

Vanguard's Core and Core-Plus Bond ETFs are actively managed strategies that span the broad U.S. bond market, offering a wide opportunity set for Vanguard's active team to add value. Their diversified, high-quality fixed income exposure and full durations make the ETFs a great fit as the centerpiece of an investor's bond portfolio. Core allocates primarily to high-quality, investment-grade bonds, while Core-Plus is a more flexible active strategy that offers greater exposure to bonds of lower credit quality.

 

VCRB

VCRB has a higher-quality bias, as it focuses primarily on investment-grade corporate bonds, Treasuries, and agency mortgagebacked securities, with only selective exposure to lower quality bonds. It's benchmarked against the Bloomberg U.S. Aggregate Float Adjusted Index (known as the "Agg”).

VPLS

VPLS also offers diversified, high-quality U.S. bond market exposure, but Vanguard's active team has greater flexibility to invest the ETF in lower-quality segments such as high-yield corporate and emerging market bonds. As such, VPLS is benchmarked against the Bloomberg U.S. Universal Index (known as the "Universal") to reflect the ETF's greater credit exposure.

 

Learn more
Learn more

The Bloomberg U.S. Universal Index tracks more of the available issuance of the U.S. fixed income market

This chart illustrates how the available issuance of the U.S. fixed income market of the Bloomberg U.S. Universal Index is higher than the Bloomberg U.S. Aggregate Float Adjusted Index as of December 31, 2024.

Source: Bloomberg Fixed Income Index Methodology, published December 31, 2024. 

Taking a universal approach 

Vanguard's approach is true to label, which means a straightforward product design and benchmark selections that best represent the key risk exposures in each fund or ETF. 

Looking at the exposures covered by the Agg and the Universal can help advisors understand the differences between core and core-plus products to determine how to use them in client portfolios.

When Vanguard's active team is cautious on the market, it can position VPLS more defensively by lowering allocations to the higher-risk plus sectors and focus on adding value through other active strategies such as individual security selection.

When Vanguard sees the market offering more opportunity, our active team has the breadth and depth of expertise across market sectors to capitalize on attractive relative value, putting to use VPLS's greater flexibility to invest across the credit quality spectrum. 

A tale of two benchmarks 

This chart illustrates the sector exposures represented in the Bloomberg U.S. Universal Index and those represented in the Bloomberg U.S. Aggregate Float Adjusted Index.

 Sources: Bloomberg and Aladdin, as of September 30, 2023. 

Have more questions?
Contact a representative.

Disclosures and footnotes

For more information about Vanguard funds or Vanguard ETFs, visit advisors.vanguard.com or call 800-997-2798 to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information about a fund 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.

Investments in bonds issued by non-U.S. companies are subject to risks including country/regional risk and currency risk. These risks are especially high in emerging markets.

While U.S. Treasury or government agency securities provide substantial protection against credit risk, they do not protect investors against price changes due to changing interest rates. Unlike stocks and bonds, U.S. Treasury bills are guaranteed as to the timely payment of principal and interest.

High-yield bonds generally have medium- and lower-range credit quality ratings and are therefore subject to a higher level of credit risk than bonds with higher credit quality ratings.

All investing is subject to risk, including possible loss of principal. Be aware that fluctuations in the financial markets and other factors may cause declines in the value of your account. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income.

Diversification does not ensure a profit or protect against a loss.