Vanguard Global Credit Bond Fund (Admiral™ Shares: VGCAX; Investor Shares: VGCIX) gives you unique access to the global credit market, which includes both U.S. and international investments. The fund will be managed by the Vanguard Fixed Income Group, which has more than 35 years of experience managing active bond portfolios.

Key potential benefits of the fund include:

  • Lower volatility. The fund’s global diversification reduces the impact of country-specific risks. This can help lower volatility relative to a U.S.-only credit fund.
  • Higher returns. Rather than government-guaranteed bonds, the fund will hold mostly investment-grade credit bonds. These corporate and noncorporate obligations typically offer higher yields than their government-guaranteed counterparts. In addition, the fund has a global—rather than a U.S.-only—scope. This creates greater opportunity for value-added investments.
  • Competitive value through active management. The fund will seek to deliver consistent outperformance with a goal of beating its benchmark, the Bloomberg Barclays Global Aggregate Credit Index (USD Hedged). It will do this at a lower cost than most competing funds, with expense ratios of 0.25% for Admiral Shares and 0.35% for Investor Shares. For comparison, the asset-weighted average expense ratio of its active peer funds in the world bond category is 0.65%.*

Which bond fund is right for you?

We’ve recently expanded our bond offerings to provide more options for diversification and income. While more choices can help you build a better portfolio, they can also make it tricky to decide which funds are right for you.

Here’s a chart that shows, at a glance, the main differences between 3 similar bond funds:

 

Global or U.S.-only

Investment type

Bond issuer types

It might be right for you if you want:

Vanguard Global Credit Bond Fund

Global

Actively managed mutual fund

Investment-grade corporate and government-related entities

An actively managed bond fund that provides global exposure to nongovernment bonds.

Vanguard Total World Bond ETF

Global

Index ETF (exchange-traded fund)

Broad investment-grade market coverage of Treasuries and government-related, securitized, and corporate debt

An all-in-one, low-cost global bond ETF.

Vanguard Intermediate-Term Investment-Grade Fund

U.S.

Actively managed mutual fund

Investment-grade corporate and government-related entities

An actively managed bond fund that focuses on U.S., nongovernment exposure.

 

Making the most of Vanguard’s management resources

Vanguard Global Credit Bond Fund will complement Vanguard’s existing suite of 25 actively managed fixed income funds, not including Vanguard’s actively managed money market funds.

Vanguard launched its first internally managed active fixed income fund in 1982 and the world’s first bond index fund in 1986. Vanguard is one of the world’s largest fixed income fund managers with approximately $1.3 trillion in assets under management.** Over $600 billion of those assets are in actively managed fixed income funds (including money markets).

The Vanguard Fixed Income Group has more than 175 global fixed income professionals, 90 of whom are part of the active taxable fixed income team, including over 30 global credit research analysts around the world.

Vanguard Global Credit Bond Fund is the first Vanguard fund of its kind. This globally diversified, actively managed bond product capitalizes on Vanguard’s extensive global investment capabilities and global credit expertise.

*Source: Morningstar, Inc., as of September 30, 2018.
**Data as of September 30, 2018.

Notes:

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 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 and governments are subject to risks including country/regional risk and currency risk. These risks are especially high in emerging markets.

You must buy and sell Vanguard ETF Shares through Vanguard Brokerage Services (we offer them commission-free) or through another broker (which may charge commissions). See the Vanguard Brokerage Services commission and fee schedules for full details. Vanguard ETF Shares are not redeemable directly with the issuing fund other than in very large aggregations worth millions of dollars. ETFs are subject to market volatility. When buying or selling an ETF, you will pay or receive the current market price, which may be more or less than net asset value.