News release

Vanguard to Expand Active Fixed Income Offerings With Broadly Diversified Core Bond Fund

VALLEY FORGE, PA (December 21, 2015)—Vanguard today filed a registration statement with the U.S. Securities and Exchange Commission (SEC) for Vanguard Core Bond Fund, a new actively managed fixed income offering.

Expected to be available in the first quarter of 2016, the fund will be managed by Vanguard Fixed Income Group and will seek to outperform the broad investment-grade U.S. fixed income market.1 The low-cost fund will invest in a broadly diversified portfolio of high-quality bonds, including Treasury, mortgage-backed, and corporate securities of varying yields and maturities.

“Vanguard Core Bond Fund will share many characteristics with Vanguard Total Bond Market Index Fund, including low-cost exposure to high-quality bonds, broad diversification, and an intermediate-term average maturity. Unlike its index sibling, however, the new fund will be actively managed, employing a disciplined, risk-controlled approach that will seek to outperform through security selection, sector allocation, and, to a lesser extent, duration decisions,” said Vanguard CEO Bill McNabb.

Price competition in core bond category

Vanguard’s new entry will bring a low-cost offering to the core bond fund category. Vanguard Core Bond Fund will offer Investor Shares with an estimated expense ratio of 0.25% and Admiral Shares with an estimated expense ratio of 0.15%, both of which are well below the intermediate-term bond fund category average expense ratio of 0.84%.2

Similarly, in February 2015, Vanguard brought cost competition to the ultra-short-term taxable category with the introduction of Vanguard Ultra-Short-Term Bond Fund, an actively managed fund that features Investor and Admiral Shares with expense ratios of 0.20% and 0.12%, respectively.3

Expanding choice for investors, both index and active

In addition to the Ultra-Short-Term Bond Fund, Vanguard has continued to expand its fund line-up to provide investors a broader choice of active and index funds. Earlier this year, Vanguard launched Vanguard Tax-Exempt Bond Index Fund, the firm’s first municipal bond index fund, to complement its broad line-up of actively managed tax-exempt funds.

An active fixed income leader                                            

Vanguard Fixed Income Group is one of the world’s largest fixed income managers, with approximately $900 billion in assets globally. The group manages approximately $260 billion in actively managed bond funds, $450 billion in index funds and ETFs, and $180 billion in money market funds. A total of 135 senior strategists, portfolio managers, credit research analysts, and traders oversee Vanguard’s fixed income fund line-up of 80 bond and 9 money market funds.

Gregory S. Nassour, Brian Quigley, and Gemma Wright-Casparius, senior portfolio managers in Vanguard Fixed Income Group, will co-manage the new fund. With a combined 71 years of investment management experience, the three managers currently oversee multiple investment-grade corporate bond, Treasury, and government bond funds.

Vanguard also filed a registration statement with the SEC today for Vanguard Emerging Markets Bond Fund, an actively managed portfolio focusing on debt securities from non-developed global markets. The fund will be managed by Vanguard Fixed Income Group and will not be immediately available for public investment.

About Vanguard

Vanguard is one of the world’s largest investment management companies. As of November 30, Vanguard managed more than $3.4 trillion in global assets. The firm, headquartered in Valley Forge, Pennsylvania, offers more than 300 funds to its more than 20 million investors worldwide. For more information, visit 

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1 An investment-grade bond is a debt security whose credit quality is considered by independent bond-rating agencies, or through independent analysis conducted by a fund’s advisor, to be sufficient to ensure timely payment of principal and interest under current economic circumstances. Debt securities rated in one of the four highest rating categories are considered investment-grade.

2 Source: Morningstar Direct, as of September 30, 2015.

3 As of the most recent prospectus, February 2015.

All figures are as of November 30, 2015, unless otherwise noted.

For more information on Vanguard funds, visit, or call 800-662-7447 to obtain a prospectus or, if available, a summary prospectus. Visit our website, call 800-662-7447, or contact your broker to obtain a prospectus for Vanguard ETF Shares. Investment objectives, risks, charges, expenses, and other important information 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.

A registration statement relating to these securities has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This communication shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, these securities in any state in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

Securities of companies based in emerging markets are subject to national and regional political and economic risks and to the risk of currency fluctuations. These risks are especially high in emerging markets.

All investing is subject to risk, including possible loss of principal.

Bond funds are subject to interest rate risk, which is the chance bond prices overall will decline because of rising interest rates, and credit risk, which is the chance a bond issuer will fail to pay interest and principal in a timely manner or that negative perceptions of the issuer’s ability to make such payments will cause the price of that bond to decline.

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