Vanguard Launches Bond ETF-Of-ETFs

Fund combines Vanguard’s three corporate debt ETFs into one fund.

Today Vanguard is rolling out its first ETF in nearly two years and its first ETF-of-ETFs. The Vanguard Total Corporate Bond ETF Shares (VTC) combines three Vanguard ETFs tracking subsets of the Bloomberg Barclays U.S. Corporate Bond Index, which is the new fund’s benchmark.

VTC comes with an expense ratio of 0.07% and lists on the Nasdaq exchange.

The new ETF holds three other Vanguard ETFs representing different maturity buckets: the $22 billion Vanguard Short-Term Corporate Bond ETF (VCSH), the $18 billion Vanguard Intermediate-Term Corporate Bond ETF (VCIT) and the $2 billion Vanguard Long-Term Corporate Bond ETF (VCLT).

Like VTC, its three component ETFs all charge 0.07%. Basically, investors who buy the new ETF will be getting one-stop shopping for the same price if they are seeking broad exposure to the corporate bond market.

The new addition brings the total number of Vanguard ETFs to 71. The firm is the second-largest ETF issuer, with $821 billion in assets under management.

Contact Heather Bell at [email protected]