Economics and markets
March 14, 2023
In the wake of the U.S. government’s closure of two regional banks, our clients naturally have questions about the exposure of Vanguard funds. The following chart shows the U.S.-domiciled Vanguard funds with direct exposure to securities issued by SVB Financial Group (ticker: SIVB), Silicon Valley Bank’s parent company, or Signature Bank (ticker: SBNY)—and those exposures as shares of the funds’ net assets—as of February 28, 2023.
Funds and ETFs shown as having “0.00%” exposure held bank securities that accounted for less than 0.01% of their net assets. Fund holdings are subject to change without notice.
*Certain of these funds have both mutual fund and ETF share classes; as they are part of the same fund, each share class has the exposure listed above. Note that this list excludes Vanguard funds of funds, some of which may have had indirect exposure to securities issued by the banks, because they invest in funds with direct exposure.
**Vanguard Market Neutral Fund may employ short-selling strategies; its negative exposure indicates that the fund was short the stock.
***Collective investment trusts are available only to institutional investors.
The full holdings of most Vanguard funds as of the end of each month are updated on our websites around the middle of the following month. An exception applies to certain of our exchange-traded funds (ETFs), which disclose their holdings daily.
Because market quotes for bank securities may not be readily available, Vanguard’s internal pricing review committee will use a variety of observable market indicators that are deemed reliable to adjust these securities’ value appropriately. The net asset values of our mutual funds and ETFs will reflect these fair-value pricing adjustments. When fair-value pricing is employed, the prices of securities used by a fund to calculate its net asset value may differ from quoted or published prices for the same securities.
For more information about Vanguard funds, ETFs, or annuity products visit vanguard.com to obtain a fund or annuity contract 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.