Vanguard launches VGHY—a new, actively managed high-yield bond ETF

On September 17, 2025, Vanguard High-Yield Active ETF (VGHY) joined Vanguard’s growing suite of fixed income ETFs as its first fixed income ETF dedicated to high-yield investing. The fund seeks to generate a high level of income through exposure to the broad high-yield market, including the flexibility to opportunistically invest in adjacent sectors like bank loans and U.S. investment-grade corporate bonds.

VGHY’s portfolio managers will seek to outperform the broad high-yield bond market through bottom-up credit selection and sector allocation decisions, along with a thoughtful approach to portfolio construction and risk management. The ETF has an alpha target of 40 basis points over its benchmark, the Bloomberg US High-Yield 2% Issuer Capped Total Return Index.

VGHY can be a strategic addition to a well-diversified portfolio for investors who want to boost their income potential by taking on commensurate risk.

Keep more of your returns

VGHY’s low estimated expense ratio of 0.22% will enable investors to keep more of what they earn, when compared with the average expense ratio of 0.59% for the category.^1,2

Managed by a global fixed income leader

The fund will be solely managed by the world-class Vanguard Fixed Income Group, which has distinguished itself for more than 40 years with deep investment capabilities, disciplined security selection processes, and rigorous risk management techniques, resulting in consistent long-term performance. Vanguard Fixed Income Group is the world’s largest manager of bond mutual funds and ETFs, overseeing the full spectrum of fixed income asset classes and sectors. The team oversees more than $2.6 trillion in global assets under management and has more than 200 investment professionals across the globe.³ The portfolio manager primarily responsible for the ETF’s day-to-day management is Michael Chang, CFA.

Vanguard has a strong track record as an investment manager—92% of Vanguard active fixed income funds have outperformed their peer group averages over the 10 years ended June 30, 2025.⁴

1 The expense ratio information shown reflects estimated amounts for the current fiscal year.

2 Morningstar, as of July 31, 2025.

3 All figures as of April 30, 2025, unless stated otherwise.

4 For the 10-year period ending 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 comparisons. (Source: LSEG Lipper) 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 www.vanguard.com/performance.

Notes

For more information about Vanguard funds and Vanguard ETFs, visit 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.

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

CFA® is a registered trademark owned by the CFA Institute.