The latest addition to our fixed income ETF (exchange-traded fund) lineup is now available. Vanguard Ultra-Short Bond ETF is designed to be a low-cost option for investors with anticipated cash needs within 6 to 18 months.
If you’re saving for a short-term goal or building your emergency fund, Vanguard Ultra-Short Bond ETF provides an investment alternative to money markets or short-term bonds.
Put your savings to work
Whether you’re saving for a car or a vacation or socking away money for a rainy day, our new Vanguard Ultra-Short Bond ETF offers potentially higher returns on your cash while keeping your risk low.
“Vanguard Ultra-Short Bond ETF offers the features of an ETF structure for investors seeking an option for anticipated cash needs in the range of 6 to 18 months,” said Kaitlyn Caughlin, head of Vanguard Portfolio Review Department. “An ultra-short strategy bridges the gap between money market funds offering a stable share price and short-term bond funds, which are meant for longer investment time horizons.”
The Ultra-Short Bond ETF is a low-cost, diversified, actively managed fund that:
- Seeks to provide current income and limited price volatility.
- Has a similar strategy to Vanguard Ultra-Short-Term Bond Fund, and targets the same average duration—approximately 1 year.
- Has a competitive estimated expense ratio of 0.10%, compared with the average expense ratio for ultra-short-term bond ETFs of 0.22%.*
- Is advised by Vanguard Fixed Income Group, one of the world’s largest fixed income managers with oversight of $2 trillion in global assets as of February 28, 2021.
- Is co-managed by Samuel C. Martinez, CFA; Arvind Narayanan, CFA; and Daniel Shaykevich.
- Samuel has worked in investment management since 2010.
- Arvind has worked in investment management since 2002 and joined Vanguard in 2019.
- Daniel, a Vanguard principal, has worked in investment management since 2001 and joined Vanguard in 2013.
Ultra-short-term bond funds generally offer a higher yield than money market funds, bank products, and CDs (certificates of deposit). However, because ultra-short-term bond products have fluctuating share prices, they shouldn’t be viewed as a substitute for money market funds, which historically have aimed to maintain a stable share price of $1.
The Ultra-Short Bond ETF is expected to have lower volatility than short-term bond products, which tend to be more sensitive to interest rate changes because of their longer-term bond holdings.
Vanguard has offered ETFs since 2001. With the addition of our new ETF, Vanguard now offers 20 U.S.-domiciled fixed income ETFs representing more than $300 billion in client assets.**
*Source: Average expense ratios for ultra-short-term bond investments are 0.45% for mutual funds and 0.22% for ETFs, or a combined average of 0.43%, as of February 28, 2021, according to Lipper, a Thomson Reuters Company.
**Assets under management were $309.8 billion as of February 28, 2021.