Vanguard sets plan to launch corporate bond ETF in fourth quarter

By Sarah Lizee

Olympia, Wash., Aug. 22 – Vanguard Group, Inc. announced that it plans to launch the Vanguard Total Corporate ETF in the fourth quarter, according to a press release.

The ETF is intended to offer investors access to the entire U.S. investment-grade corporate bond market through a single fund.

The fund will be structured as an ETF of ETFs, investing directly in three existing, low-cost ETFs: Vanguard Short-Term Corporate Bond ETF, Vanguard Intermediate-Term Corporate Bond ETF, and Vanguard Long-Term Corporate Bond ETF.

This approach enables the Total Corporate Bond ETF to achieve immediate scale by using existing exposure from the underlying ETFs and is expected to result in tighter bid/ask spreads and lower operating expenses than investing directly in the benchmark’s constituents.

The company estimates an expense ratio of 0.07% upon the ETF’s launch.

Vanguard, through its Fixed Income Group, will serve as the investment adviser.

Valley Forge, Penn.-based Vanguard Group is an investment management company.

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