Vanguard Rolls Out 'Ultra Short' Bond ETF

Vanguard Rolls Out 'Ultra Short' Bond ETF

The new actively managed fund fills an empty space in Vanguard's lineup. 

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Reviewed by: Heather Bell
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Edited by: Heather Bell

Today Vanguard expanded its bond market coverage by launching a fixed income ETF focused on securities with two years or less to maturity.

The Vanguard Ultra-Short Bond ETF (VUSB) joins a fairly crowded field of nearly 30 ETFs with the “ultra-short” designation and where its largest competitor is the actively managed $17 billion JPMorgan Ultra-Short Income ETF (JPST).

However, VUSB charges just 0.10% in expense ratio versus the 0.18% charged by JPST. The Vanguard fund lists on Cboe Global Markets.

It is Vanguard’s first actively managed fixed income ETF. According to the prospectus, VUSB “seeks to provide current income while maintaining limited price volatility.” It does this by investing in investment-grade debt that it has determined to be of “medium” or “high” quality.

By contrast, the $32 billion Vanguard Short-Term Bond ETF (BSV) is an index-based ETF that targets issues with one to five years of remaining maturity.

VUSB brings Vanguard’s total number of ETFs offered to 82. The firm currently has $1.6 trillion in assets under management in its ETFs alone.

Contact Heather Bell at [email protected]

 

Heather Bell is a former managing editor of etf.com. She has also held editorial positions at Dow Jones Indexes and Lehman Brothers. Bell is a graduate of Dartmouth college and resides in the Denver area with her two dogs.