Vanguard Introduces Its First Actively Managed High-Yield Bond ETF for Investors

Vanguard Launches VGHY: New High-Yield Bond ETF

In a significant move for both investors and the financial market, Vanguard has unveiled the Vanguard High-Yield Active ETF (VGHY), marking its foray into actively managed high-yield bond ETFs. The fund is an initiative spearheaded by Vanguard's esteemed Fixed Income Group, aiming to provide a diverse set of investment opportunities within the high-yield corporate bond spectrum.

Commitment to Active Management

According to Michael Chang, Head of High-Yield Portfolio Management at Vanguard, the introduction of VGHY embodies the company's longstanding commitment to careful credit investment. He emphasized that the ETF benefits from a synergistic team of credit analysts, traders, and risk specialists. This cohesive group collaborates daily to identify value and manage risks effectively across the high-yield landscape. Their objective is clear: to offer a dynamic investment solution that not only understands but also adapts to fluctuating market conditions with a clear intent to surpass both its benchmarks and peers.

Investment Strategy and Value Proposition

VGHY provides broad exposure to the entire high-yield credit quality spectrum, with added flexibility to invest in complementary sectors such as leveraged loans and U.S. investment-grade corporate bonds. This adaptability is designed to meet the growing demand among investors for income through professionally managed investments in high-yield corporate bonds.

What's more, the ETF comes with an estimated expense ratio of 0.22%, significantly lower than the category average of 0.59%. This cost-efficient approach underscores Vanguard's dedication to delivering high-quality investment solutions while maintaining affordability.

Vanguard's Legacy in Fixed Income Investing

Vanguard boasts a rich history in fixed income investing, dating back over four decades. The firm has consistently demonstrated excellence through its deep analytical skills, disciplined security selection, and comprehensive risk management framework. Adopting a client-centered ethos, Vanguard continually invests in enhancing its fixed income solutions, ensuring they evolve according to investor needs.

In recent years, Vanguard has notably expanded its active fixed income management capabilities. This evolution includes a focused development of its actively managed bond ETF lineup, now totaling nine distinct ETFs that span several sectors, attuned to increasing investor appetite for professionally managed options.

Currently, Vanguard manages over $1.1 trillion in active fixed income assets, offering access to a wide array of strategies, including global corporate bonds, emerging markets, structured products, money markets, and municipal bonds. These advancements reflect Vanguard's strategic intent to empower investors with tools for successfully navigating complex and ever-changing market landscapes.

About Vanguard

Founded in 1975, Vanguard has solidified its status as one of the world’s leading investment management companies. The firm is characterized by an investor-owned structure, ensuring that shareholders directly benefit from Vanguard's performance and decisions. Vanguard’s mission is straightforward: to advocate for all investors, treat them fairly, and provide them the best chances for success in their investment journeys.

With the launch of VGHY, Vanguard continues to set a benchmark in the financial industry, demonstrating that active management and investor value can go hand in hand. This ETF presents new opportunities for investors seeking diversification and returns in today’s market.

For more details about VGHY or Vanguard’s other offerings, investors are encouraged to visit vanguard.com where they can obtain prospectuses and pertinent information regarding risks, charges, and investment approaches to make informed decisions before investing.

Important Notices

Investors should be aware that ETF shares must be traded on the secondary market and may incur additional costs. All investments carry risks, including the potential loss of capital. While VGHY offers a sophisticated way to engage with high-yield bonds, investors should understand that high-yield investments often come with higher risk.

Vanguard Marketing Corporation, as the distributor, reminds all investors to conduct thorough research and consider the investment objectives and risks before engaging with any financial product.