News release

Vanguard Introduces Commodity Futures Fund

VALLEY FORGE, PA (June 25, 2019)—Vanguard today launched Vanguard Commodity Strategy Fund (VCMDX) for investors seeking low-cost exposure to the commodities market. The fund will be offered in Admiral Shares, with an estimated expense ratio of 0.20%, which is one-sixth the 1.24% average expense ratio of competing broad-based commodity-linked funds.1

Vanguard Commodity Strategy Fund employs an actively managed approach and seeks to offer diversification to a traditional stock/bond portfolio and a hedge against inflation by investing in a mix of Treasury bills (T-bills) and short-term treasury inflation-protected securities (TIPS). The fund’s objective is to seek to provide broad commodities exposure and capital appreciation.

Inflation fluctuations are difficult to predict and can have significant impact on both stock and bond market returns. Vanguard believes that a diversified blend of commodity-linked futures and short-term TIPS can provide diversification benefits in the event of unexpected inflation, as commodities returns have historically exhibited low correlation to those of the equity and fixed income markets. Additionally, Vanguard’s latest research on combating inflation found that commodities can offer a higher level of inflation protection beyond the invested position, making it an attractive option for sophisticated investors willing to accept the risks associated with investing in this particular asset class. The fund’s advisor will pursue additional inflation protection by collateralizing a portion of the portfolio in short-term TIPS and will take advantage of liquidity premiums by holding longer futures contracts.

Active and alternative strategy expertise

Vanguard serves as the fund’s advisor, with oversight by two internal management groups that bring years of expertise in managing both alternative strategies and TIPS investments. For more than 10 years, Vanguard’s Quantitative Equity Group has managed the commodities allocation for Vanguard Managed Payout Fund and oversees more than $2 billion in alternative strategies in aggregate.2 Vanguard Managed Payout Fund’s commodities exposure—currently $125.8 million—will be reallocated to the new fund. Vanguard’s Fixed Income Group manages $1.5 trillion in assets, including several TIPS and T-bill portfolios, including the $29.1 billion Vanguard Short-Term Inflation-Protected Securities Index Fund.

Together, the fund’s portfolio managers, Josh Barrickman, Anatoly Shtekhman, and Fei Xu, will collaborate and capitalize on their expertise in fixed income and alternative investments in managing the fund.

  • Josh Barrickman, CFA, principal, senior portfolio manager, and head of Fixed Income Indexing Americas, has more than 15 years of fixed income experience. He earned a B.S. at Ohio Northern University and an M.B.A. from Lehigh University.
  • Anatoly Shtekhman, CFA, portfolio manager and senior investment strategist in Vanguard Quantitative Equity Group, has worked in the investment management industry for more than 18 years. He earned a B.S. in mathematics from the University of Scranton, an M.S. in finance from Boston College, and an M.B.A. from the Wharton School of the University of Pennsylvania.
  • Fei Xu, CFA, portfolio manager in Vanguard Quantitative Equity Group, with a primary focus on research and portfolio management of factor-based and alternative strategies, has worked at Vanguard for 15 years. In addition to holding the CFA designation, he also earned a Financial Risk Manager(R) (FRM) certification, a B.S. in geophysics from Peking University, an M.S. in geophysics from UCLA, and an M.B.A. from Duke University, where he was a Fuqua Scholar.

Vanguard’s Quantitative Equity and Fixed Income Groups manage more than $210 billion in actively managed fund assets. As of March 31, 2019, 77% of Vanguard’s active funds outperformed their peer averages over 3 years, 92% outperformed over a 5-year period, and 88% outperformed over a 10-year period.3

Broadening Vanguard’s low-cost alternative investment lineup

Vanguard Commodity Strategy Fund will broaden the firm’s existing low-cost alternative strategies lineup, consisting of Vanguard Market Neutral Fund (VMNFX) and Vanguard Alternative Strategies Fund (VASFX). The minimum initial investment for this fund is $50,000.

Investing in alternative strategies, such as Vanguard Commodity Strategy Fund, provides an opportunity to yield diversification benefits to a balanced portfolio by reducing overall portfolio volatility and improving risk-adjusted returns. However, such strategies do pose higher risks than investing in traditional stock/bond portfolios. Commodities-based investing poses risks based on a variety of factors, including high volatility and the potential for low returns over long periods. The commodities markets are volatile and even a small movement in market prices could cause large losses.


About Vanguard

Vanguard is one of the world’s largest investment management companies. As of May 31, 2019, Vanguard managed $5.4 trillion in global assets. The firm, headquartered in Valley Forge, Pennsylvania, offers 414 funds to its more than 20 million investors worldwide. For more information, visit

All figures are as of May 31, 2019 unless otherwise noted.

1 Source: Lipper, a Thomson Reuters Company, as of September 30, 2018. Data is based on Lipper peer-group average expense ratios.

2 Source: Vanguard. Assets of Vanguard Market Neutral Fund and Vanguard Alternative Strategies Fund. As of May 31, 2019.

3 For the three-year period, 9 of 9 Vanguard money market funds, 39 of 51 bond funds, 7 of 7 balanced funds, and 33 of 47 stock funds, or 88 of 114 Vanguard funds outperformed their peer group averages. For the five-year period, 9 of 9 Vanguard money market funds, 41 of 44 bond funds, 6 of 6 balanced funds, and 42 of 47 stock funds, or 98 of 106 Vanguard funds outperformed their peer group averages. For the ten-year period, 9 of 9 Vanguard money market funds, 36 of 44 bond funds, 6 of 6 balanced funds, and 37 of 41 stock funds, or 88 of 100 Vanguard funds outperformed their peer group averages. Results will vary for other time periods. Source: Lipper, a Thomson Reuters Company.

For more information about Vanguard funds, visit or call 800-523-1036 to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information about a fund are contained in the prospectus; read and consider it carefully before investing. Copies of the final prospectus can be obtained from Vanguard. Please note that a preliminary prospectus is subject to change.

  • Investments in derivatives may involve risks different from, and possibly greater than, those of investments in the underlying securities or assets.
  • Although inflation-indexed bonds seek to provide inflation protection, their prices may decline when interest rates rise and vice versa.
  • All investing is subject to risk, including the possible loss of the money you invest. 
  • The fund could lose all, or substantially all, of its investments in instruments linked to the returns of commodity futures or other commodity investments. Commodity futures trading is volatile, and even a small movement in market prices could cause large losses.

Vanguard Marketing Corporation, Distributor of the Vanguard Funds.