Active fixed income and our ownership structure

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Active fixed income and our ownership structure

Expert Perspective


February 28, 2024

For more than 40 years, Vanguard Fixed Income Group has distinguished itself as a premier fixed income manager and prudent steward of our investors’ capital. The group’s deep investment expertise, disciplined security selection processes, and rigorous risk management techniques have resulted in consistent, strong, long-term performance across Vanguard’s fixed income offerings.

It all starts with our structure

Vanguard’s long-term success in active fixed income starts with Vanguard’s unique ownership structure. Vanguard is owned by its member funds, which in turn are owned by fund shareholders. With no outside owners to satisfy, this structure ensures business and portfolio management decision focus squarely on meeting the investment needs of our investors.

The value of Vanguard’s ownership was on full display with the recent launches of Vanguard Core Bond ETF and Vanguard Core-Plus Bond ETF, actively managed ETFs that can each be used as a foundational cornerstone in an investor’s diversified fixed income portfolio.

“As investors’ needs continue to evolve, Vanguard’s structure and relentless focus on investor outcomes enable us to bring top-tier fixed income offerings to bear,” said Sara Devereux, Global Head of Vanguard Fixed Income Group. “We have no outside shareholders, so we don’t have to cut corners or fall victim to short-termism. We have the freedom to focus on the long term—from building and managing enduring fixed income solutions and investing in cutting-edge technology to developing the next generation of fixed income talent.”  

Better investments by design

Vanguard keeps clients at the center of product design and follows a deliberate product development process with our investors’ best interests as our north star. Every new fund proposal is diligently vetted and must meet strict criteria. For us to launch a new investment solution, it must:

  • Have enduring investment merit.
  • Fill an unmet investor need.
  • Have the potential to be a leading offer in its category.

Fund management

Vanguard takes a disciplined, risk-controlled approach to managing investor assets. We adhere to the funds’ stated objectives and do not assume undue risks with investors’ money or compromise our integrity for short-term gain. Instead, we design and manage enduring, high-quality investments that can generate superior, sustained performance.

“Our active edge in fixed income revolves around compounding alpha,” said Devereux. “We focus on a diversified set of reliable strategies that are repeatable and scalable. We don't have an overreliance on large macro bets. In addition, we have a differentiated risk framework that is strengthened by our low fees. This gives us the breathing room to take risk up and down according to the opportunity set and has ultimately resulted in the best risk-adjusted returns over time.” 1

Talent is key

Top talent is critical for the successful management our investment lineup. Vanguard’s clear mission, unique structure, strong culture, and impressive performance record have enabled us to attract leading investment professionals across fixed income disciplines.

“Our team of more than 150 portfolio managers, traders, and research analysts specialize in all publicly traded fixed income sectors,” Devereux noted. “Our process thrives on close collaboration and draws upon the team’s depth of expertise across bond markets to deploy a diversified set of strategies that we believe offers our clients a better chance of investment success.”

Track record of strong active fixed income performance

The convergence of top talent, client-centric product development, disciplined fund management, and rigorous risk management techniques—all aided by Vanguard’s ownership structure and low fees2—has resulted in tangible long-term outperformance. Among Vanguard’s actively managed fixed income funds, 95% have outperformed their peer-group averages over the past 10 years.

“Bolstered by Vanguard’s ownership structure, the collective strength of our investment expertise, talent, and capabilities is greater than the sum of its parts,” said Devereux. “By focusing on our investors’ best interests, Vanguard Fixed Income Group has been able to drive value and deliver consistent, long-term performance.”

Vanguard active bond funds and ETFs

Admiral Shares™ or ETF ticker symbol
Expense Ratio*









Inflated-Protected Securities 



Intermediate-Term Treasury



Long-Term Treasury



Short-Term Federal



Short-Term Treasury




Investment-grade corporate




Core Bond



Core Bond ETF



Core-Plus Bond



Core-Plus Bond ETF 



Intermediate-Term Investment-Grade



Long-Term Investment Grade✝︎



Multi-Sector Income Bond



Short-Term Investment-Grade 



Ultra-Short-Term Bond



Ultra-Short Bond ETF








High-Yield Corporate✝︎








Emerging Markets Bond



Global Credit Bond




Vanguard active municipal bond funds





National Municipal




Ultra-Short-Term Tax-Exempt



Limited-Term Tax-Exempt



Intermediate-Term Tax-Exempt



Long-Term Tax-Exempt



High-Yield Tax-Exempt




State Municipal




California Intermediate-Term Tax-Exempt



California Long-Term Tax-Exempt



Massachusetts Tax-Exemptŧ



New Jersey Long-Term Tax-Exempt 



New York Long-Term Tax-Exempt



Ohio Long-Term Tax-Exemptŧ



Pennsylvania Long-Term Tax-Exempt




* As reported in each fund's prospectus. A fund's current expense ratio may be higher or lower than the figure shown.

✝︎ Investment advisor: Wellington Management Company LLP.

ŧ Investor Shares available only. There is no minimum investment required for advised clients.


Note: Data are as of December 31, 2023.


1 For the 10-year period ended December 31, 2023, 42 of 44 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 comparisons. (Source: Lipper, a Thomson Reuters Company.) Note that this competitive performance data represents 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

2 Vanguard calculations, based on data from Morningstar, Inc., as of December 31, 2022, show that Vanguard active fixed income funds had an average asset-weighted expense ratio of 11 basis points, compared with an average asset-weighted expense ratio of 55 basis points for non- Vanguard active fixed income funds. (A basis point is one-hundredth of a percentage point.)

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Vanguard Core Bond ETF and Vanguard Core-Plus Bond ETF are not to be confused with the similarly named Vanguard Core Bond Fund and Vanguard Core-Plus Bond Fund. These products are independent of one another. Differences in scale, certain investment processes, and underlying holdings between the ETFs and their mutual fund counterparts are expected to produce different investment returns by the products.

For more information about Vanguard funds or ETF Shares, visit 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.

All investing is subject to risk, including the possible loss of the money you invest. 

Vanguard is owned by its funds, which are owned by Vanguard’s fund shareholder clients. 

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

Bond funds are subject to the risk that an issuer will fail to make payments on time, and that bond prices will decline because of rising interest rates or negative perceptions of an issuer's ability to make payments. 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. Bonds of companies based in emerging markets are subject to national and regional political and economic risks and to the risk of currency fluctuations. These risks are especially high in emerging markets.

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