Vanguard on Thursday introduced the Vanguard Total World Bond ETF (BNDW), billed as the first U.S.-domiciled index exchange-traded fund providing access to the global investment-grade bond universe in a single fund.
BNDW is an ETF of ETFs that invests in the Vanguard Total Bond Market ETF (BND) and Vanguard Total International Bond ETF (BNDX). The former has nearly $36 billion in assets under management and an expense ratio of 0.05 percent, while the latter has $11.7 billion in AUM and expenses of 0.11 percent. Vanguard says this structure provides its new fund with instant scale.
The Total World Bond ETF has an estimated expense ratio of 0.09 percent and tracks the Bloomberg Barclays Global Aggregate Float Adjusted Composite Index.
Vanguard says BNDW’s structure is akin to that of the Vanguard Total Corporate Bond ETF (VTC) that debuted last November and invests in Vanguard’s existing short-, intermediate- and long-term corporate bond ETFs.
Vanguard notes that it is one of the world’s largest bond fund managers with $1.4 trillion in assets under management.