Vanguard will further diversify the choice available within its low-cost ETF range with the launch of the Vanguard® Australian Fixed Interest Index ETF.
It is expected that the new ETF will begin trading under the ticker code VAF later this month once regulatory approvals are complete.
The ETF offers investors access through the ASX to one of Vanguard’s flagship index funds via the new ETF share class which tracks the UBS Composite Bond Index™.
The ETF offers access to a diverse range of high credit quality Australian fixed income securities at a cost of just 0.20 per cent for a broadly diversified portfolio which includes allocations to government, semi-government and corporate bonds.
Fixed Income, Stephen Howard said: “Fixed income is an important diversifying component of investors’ portfolios—as recent years have shown—serving as a cushion to the volatility associated with equities.
“While term deposits can serve well as short term savings vehicles, investing in high quality fixed income assets is all about lowering and managing risk, and ETFs provide investors with an easy, low cost way to access this asset class.
“Vanguard ETFs are established as a share class of Vanguard’s wholesale fund range of index portfolios. This offers the benefit of competitive pricing and other portfolio advantages that economies of scale permit,” said Mr Howard.
Fixed income ETFs were permitted for trading on the ASX in early 2012 and already represent seven per cent of overall ETF investment. Earlier this year Vanguard added the Vanguard® Australian Government Bond Index ETF to its ETF range.