Vanguard has announced plans to launch a World Bond ETF that will offer access to investment-grade bonds across the globe, the company announced.
The company filed a preliminary registration statement for the ETF on Monday and plans to launch the ETF in the third quarter. The Vanguard Fixed Income Group will serve as advisor to the fund, which will track the Bloomberg Barclays Global Aggregate Float Adjusted Composite Index and have an expense ratio of about 0.09 percent.
"With the Total World Bond ETF, Vanguard will be the first firm to offer U.S. investors a single index product with exposure to the entire global investment-grade bond universe," said Vanguard Chief Investment Officer Greg Davis. "It will be simple, convenient, and highly diversified, with an expense ratio in line with our current low-cost fixed-income ETFs."
The fund will be an ETF of ETFs, with investments in the Vanguard Total Bond Market ETF and the Vanguard Total International Bond ETF, the company said.
"This structure enables the Vanguard Total World 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," Vanguard said in a press release.
The Vanguard Fixed Income Group manages more than $1.3 trillion in assets and employs more than 175 investment professionals.