Today, Vanguard rolled out a world bond ETF that invests in two other Vanguard ETFs. The Vanguard Total World Bond ETF (BNDW) tracks the performance of the Bloomberg Barclays Global Aggregate Float Adjusted Composite Index by investing in the Vanguard Total Bond Market ETF (BND) and the Vanguard Total International Bond ETF (BNDX)
BNDW lists on the Nasdaq stock market and comes with an expense ratio of 0.09%.
Less than a year ago, Vanguard rolled out another ETF-of-ETFs, the Vanguard Total Corporate Bond ETF (VTC). It invests in three other Vanguard corporate bond funds that cover specific maturity ranges, so BNDW is not the firm’s first endeavor of this type. VTC currently has just $55 million in assets under management, a very low level for a typical Vanguard fund.
And earlier this year, Vanguard launched a family of actively managed factor funds. Those, too, have not accumulated much in the way of assets relative to previous Vanguard launches, which probably has to do with the new direction it represented for the firm.
However, with BNDW, Vanguard is basically offering low-cost one-stop shopping to cover the global investment-grade bond space. Pair it with something like the Vanguard Total World Stock ETF (VT) priced at 0.10%, and you can have a complete bond and equity portfolio in two ETFs for a total cost of less than 0.10%, as pointed out in a recent tweet from Ritholtz Wealth Management’s Tadas Viskanta.
Contact Heather Bell at [email protected]