Vanguard has filed a preliminary registration statement with the Securities and Exchange Commission for the Vanguard Global Credit Bond Fund.
The new actively managed fund, expected to launch in November 2018, will provide investors with diversified, predominately investment-grade exposure to the US and international credit markets.
“Our clients are increasingly looking to reduce their home bias and harness the return potential and diversification benefits offered by the international equity and fixed income markets,” says John Hollyer, global head of Vanguard Fixed Income Group. “The new Global Credit Bond Fund’s wide range of security selection opportunities and regional and sector exposures, combined with the flexibility of active management, will make it an attractive core or satellite portfolio holding.”
The fund will invest in both corporate and non-corporate obligations, and will exclude government-guaranteed issues. Most of the non-US portion of the portfolio will be hedged to the US dollar, enabling investors to pursue a global credit premium without adding currency risk.
The fund’s advisor will focus on identifying relative value across multiple countries, yields, currencies, credit ratings, and cost bases. Security selection, sector allocation, and interest rate views will factor into portfolio decisions. A majority of the fund will be invested in US securities, with the reminder in non-US securities, representing both developed and emerging markets.
The fund will be managed by Vanguard’s Fixed Income Group, a global team of more than 170 investment professionals responsible for the oversight of over USD1.3 trillion in assets. For more than 35 years, the tenured group has used its deep investment capabilities, disciplined credit-security-selection process, and rigorous risk management techniques to deliver consistent long-term performance for Vanguard clients.