This new bond ETF offers:
- Broad exposure. VTC gives you exposure to the entire investment-grade corporate bond market.
- Diversification. It includes short-, intermediate-, and long-term bonds, so you don’t have to choose a duration.
- Low costs. Offered at 0.07%*, this fund’s expense ratio is among the lowest on the market for a corporate bond fund.
The role of bonds
Bonds play an important role in many investors’ portfolios—they may help diversify risk and generate income. The new ETF offers exposure to short-, intermediate-, and long-term investment-grade corporate bonds.
“The Total Corporate Bond ETF provides investors with a core portfolio building block and is a welcome addition to Vanguard’s diversified lineup of low-cost bond ETFs,” said John Hollyer, global head of Vanguard Fixed Income Group.
VTC seeks to track the Bloomberg Barclays U.S. Corporate Bond Index by investing directly in Vanguard’s 3 existing investment-grade bond ETFs: Vanguard Short-Term Corporate Bond ETF (VCSH), Vanguard Intermediate-Term Corporate Bond ETF (VCIT), and Vanguard Long-Term Corporate Bond ETF (VCLT). VTC will be a stand-alone ETF product (no corresponding Investor or Admiral™ mutual fund share classes will be offered). Vanguard Fixed Income Group will serve as advisor to the ETF.
A leader in bond indexing
Vanguard has been a leader in bond indexing since it launched the first bond index fund, Vanguard Total Bond Market Index Fund, in 1986. Vanguard’s Fixed Income Group is one of the world’s largest bond fund managers with approximately $1.3 trillion under management. Vanguard has been a participant in the ETF industry for more than 16 years, meeting the needs of a diverse set of investors with 71 ETFs that represent more than $800 billion in client assets.**
*Data as of 11/09/17
**Data as of 10/31/2017
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 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.