Vanguard Expands Active Bond ETF Suite with Short Duration ETF

VALLEY FORGE, Pa., April 3, 2025 /PRNewswire/ -- Vanguard today launched Vanguard Short Duration Bond ETF (VSDB), an active fixed income ETF managed by Vanguard Fixed Income Group. VSDB is designed to provide clients with current income and lower price volatility consistent with short-duration bonds.

"The addition of Vanguard Short Duration Bond ETF reaffirms our commitment to meeting the evolving needs of investors who are increasingly seeking active bond solutions through an ETF wrapper," said Sara Devereux, Global Head of Vanguard Fixed Income Group. "VSDB combines institutional-quality active investment expertise with some of the lowest costs in the industry. VSDB seeks to deliver consistent, reliable returns that when compounded over time, can result in superior long-term outperformance."

Vanguard Short Duration Bond ETF offers diversified exposure to primarily short-duration U.S. investment-grade bonds – including structured products exposure, like asset-backed securities – with the flexibility to invest in below investment-grade debt to seek additional yield. The ETF is actively managed, enabling the portfolio managers to seek the best opportunities within their investable universe while remaining highly risk aware. With the launch of VSDB, Vanguard has expanded its actively managed bond ETF portfolio to six, boosting the total number of actively managed products within the lineup to 27.

Vanguard Short Duration Bond ETF has an expense ratio of 15 bps. This expense ratio matches the lowest in the category, differentiating it relative to major competitors where the active ETF category has an average expense ratio of 39 bps.¹ It will be managed by Arvind Narayanan and Thanh Nguyen, industry veterans each with two decades of experience.

Vanguard Fixed Income Group
For more than 40 years, Vanguard Fixed Income Group has distinguished itself with deep investment capabilities, disciplined security selection processes, and rigorous risk management techniques, resulting in consistent, long-term performance. Vanguard's active fixed income portfolio managers employ a data-driven approach to fund management focused on identifying high information ratio strategies, optimizing trade execution, and delivering a repeatable investment process that delivers strong investment outcomes that compound over the long-term.  Vanguard's track record reflects this, with 91% of Vanguard active fixed income funds outperformed their peer group averages over the past ten years ended 12/31/2024.²

Vanguard Fixed Income Group is the world's largest manager of bond mutual funds and ETFs, overseeing the full spectrum of fixed income asset classes and sectors. The team manages more than $2.5 trillion in global assets under management and has nearly 200 investment professionals across the globe.³

About Vanguard
Founded in 1975, Vanguard is one of the world's leading investment management companies. The firm offers investments, advice, and retirement services to individual investors, institutions, and financial professionals. Vanguard operates under a unique, investor-owned structure where Vanguard fund shareholders own the funds, which in turn own Vanguard. As such, Vanguard adheres to a simple purpose: To take a stand for all investors, to treat them fairly, and to give them the best chance for investment success. For more information, visit vanguard.com.

¹Morningstar as of February 28, 2025.

²For the ten-year period ending December 31, 2024, 40 of 44 Vanguard active bond funds outperformed their peer group averages; results will vary for other time periods. Only funds with a minimum ten-year history were included in the comparisons. (Source: Lipper, a Thomson Reuters Company) Note that this competitive performance data represents past performance, which is not a guarantee of future results, and that all investments are subject to risks. For the most recent performance, visit our website at www.vanguard.com/performance.

³All figures as of January 31, 2025, unless stated otherwise.

For more information about Vanguard funds and Vanguard ETFs, visit vanguard.com to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information are contained in the prospectus; read and consider it carefully before investing.

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. 

Bond funds are subject to the risk that an issuer will fail to make payments on time, and that bond prices will decline because of rising interest rates or negative perceptions of an issuer's ability to make payments. Investments in bonds are subject to interest rate, credit, and inflation risk.

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SOURCE Vanguard