##  [# Vanguard Files for First High-Yield Bond ETF](/sections/etf-watch/vanguard-files-first-high-yield-bond-etf) 

 

# Vanguard Files for First High-Yield Bond ETF

 

 

\- Vanguard’s new fund would invest in high-yielding, higher-risk corporate bonds.  
\- Other firms are also looking to offer investors access to junk bonds in the convenient, low-cost ETF wrapper.



 

 

 

 

 [![Malika](/sites/default/files/styles/author_image_icon/public/2025-03/Headshot%203.png?itok=STS0LyKG)](/authors/mallika-mitra) 

[By Mallika Mitra](/authors/mallika-mitra)

 Jul 02, 2025

 Edited by: David Tony

 

 

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Vanguard is planning to enter the junk bond exchange-traded fund market with the **Vanguard High-Yield Active ETF Shares (VGHY)**, according to a Securities and Exchange Commission [filing](https://www.sec.gov/Archives/edgar/data/106444/000168386325005510/f42378d1.htm) on Tuesday.

The new ETF is the fund giant’s first entry into the junk bond area of the ETF market per [Bloomberg](https://www.bloomberg.com/news/articles/2025-07-01/vanguard-plans-first-junk-etf-as-jpmorgan-heats-up-active-race), which reported that these types of funds have attracted roughly $11.6 billion so far in 2025.

VGHY’s proposed fee is 0.22%, and the filing is set to come into effect September 15.

## Vanguard’s First High-Yield Bond ETF Offering 

Vanguard’s new fund would invest in high-yielding, higher-risk corporate bonds with medium- and lower-range credit quality ratings. The fund would invest at least 80% of its assets in corporate bonds that are rated below Baa by Moody’s Ratings, have an equivalent rating by another ratings agency or are considered to be of a comparable quality by the fund’s advisor, according to the SEC filing.

It can’t invest more than 20% of its assets, in aggregate, in investment-grade debt securities, U.S. Treasury securities, convertible securities, preferred stocks and fixed- and floating-rate loans of medium- to lower-range credit quality.

In a world where yields are higher than average and some equity valuations may be stretched, high-yield credit is more likely to offer an attractive opportunity to generate total returns and income, Sam Martinez, head of active fixed-income product at Vanguard, told etf.com via an emailed statement.

He added that adding high-yield fixed income to an optimized 60/40 multi-asset portfolio enhances risk-adjusted returns and that the higher the risk of default in the high-yield bond sector presents “a great opportunity for a world-class active high-yield team to outperform using deep fundamental research.”

 
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## The Growing Junk Bond Market 

As Aniket Ullal, head of ETF research at CFRA, explained to etf.com, “There is already $117 billion invested in high-yield bond ETFs in the U.S., but 85% of those assets are invested in indexed products. In his investor letter earlier this year, Vanguard CEO Salim Ramji had identified active fixed income as an opportunity for growth. The asset-weighted average fee for an active fixed-income ETF is 3.4 times that of an indexed fixed-income ETF, which opens up opportunities for a low-cost provider like Vanguard in the active space.”

But Vanguard is far from the only firm looking to offer investors access to junk bonds in the convenient, low-cost ETF wrapper.

Last week, [JPMorgan Chase &amp; Co. (JPM)](/stock/JPM) launched the [**JPMorgan Active High Yield ETF (JPHY)**](/JPHY)—the largest active [ETF launch](https://www.etf.com/sections/etf-watch/jpmorgan-launches-new-2b-high-yield-etf) in history, according to the company. Capital Group also launched its first high-yield bond ETF, the [**Capital Group High Yield Bond ETF (CGHY)**](/CGHY), last week.

*Editor's note: Story has been updated to add a comment from CFRA's Aniket Ullal.*



 

 

 [ Mallika Mitra ](/authors/mallika-mitra) 

 

 

  Mallika Mitra is an experienced business and financial journalist. Her work can be found in Barron's, Kiplinger, CNBC, Bloomberg News, Bankrate, USA…   [View Bio](/authors/mallika-mitra)

 



 

 


 Related Topics  [Junk Bond](http://www.etf.com/topics/junk-bond) 

 [Vanguard](http://www.etf.com/topics/vanguard) 

 [JPMorgan Chase](http://www.etf.com/topics/jpmorgan-chase) 

 [Capital Group](http://www.etf.com/topics/capital-group)