Vanguard has launched its first low-cost, actively managed global credit bond fund in the UK.
The Vanguard Global Credit Bond Fund will invest in a broadly diversified portfolio of global credit bonds including high quality bonds from corporate issuers, government agencies and also supranational organisations around the world.
The new fund costs less than all active retail funds offered in the global credit bond category in the UK, helping investors keep more of their returns in a low-yield environment. It will carry an ongoing charge figure (OCF) of just 0.35 per cent for investor share classes, and 0.30 per cent for institutional share classes.
Despite the low-yield environment, bonds can play a critical role as a diversifier in investors’ portfolios.
Paul Malloy (pictured), Head of Fixed Income for Vanguard in Europe, says: “The case for investing in high quality, liquid global credit bonds is compelling as it can offer a reasonable income compared with other bond and equity income strategies. Another important element is the universe the fund will invest in will typically have lower volatility than high yield bonds or equities, helping to offset a portfolio’s return volatility. Investors should also pay close attention to costs, as the impact of fees is amplified in a low-yield market environment.”
The Vanguard Global Credit Bond Fund will be actively managed by Vanguard’s Fixed Income Group, a global leader in fixed income investing, with more than USD1.2 trillion in assets under management globally as of 31 July 2017. Rather than rely on one individual to make decisions, the Fixed Income Group takes a team-based, global approach to managing Vanguard’s actively managed fixed income funds. This disciplined and risk-controlled approach leverages the capabilities of multiple teams and is designed to maximise the collective and specialised expertise of Vanguard’s portfolio managers, credit and rate analysts, researchers and traders.