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Vanguard launches low-cost international bond fund and ETF


Vanguard has launched the Vanguard Total International Bond Index Fund, which offers three low-cost conventional shares (Investor, Admiral and Institutional) that are available for purchase immediately.

The fund’s ETF shares (BNDX) are expected to begin trading on 4 June 2013.
The new fund provides broad exposure to the international fixed income markets and serves as a complement to the firm’s other total market offerings: the USD248bn Total Stock Market Index Fund, the USD117bn Total Bond Market Index Fund, the USD95bn Total International Stock Index Fund, and the USD3bn Total World Stock Index Fund.
“Our broad market index funds enable individual investors, financial advisors, and institutions to build broadly diversified, balanced investment portfolios at an extremely low cost,” says Vanguard chief executive Bill McNabb. “We’ve seen a growing number of investors adopt low-cost, diversified investment programmes through our all-in-one funds or assemble their own balanced portfolios using our broad-based funds and ETFs.”
The Total International Bond Index Fund will seek to track the performance of the Barclays Global Aggregate ex-USD Float Adjusted RIC Capped Index (USD Hedged). The index comprises approximately 7,000 investment-grade corporate and government bonds from 52 countries. The index caps its exposure to any single bond issuer, including government issuers, at 20 per cent to meet regulated investment company (RIC) tax diversification requirements. The top country holdings as of April 30, 2013 were Japan (22 per cent), France (11 per cent), Germany (11 per cent), Italy (eight per cent), and the UK (eight per cent). 

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