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.”
A closer look at our new ETF
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.
How this ETF compares to money market funds and short-term bond funds
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.
For more information about Vanguard funds or Vanguard ETFs, visit investor.vanguard.com to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information about a fund are contained in the prospectus; read and consider it carefully before investing.
You must buy and sell Vanguard ETF Shares through Vanguard Brokerage Services (we offer them commission-free) or through another broker (which may charge commissions). See the Vanguard Brokerage Services commission and fee schedules for full details. Vanguard ETF Shares are not redeemable directly with the issuing fund other than in very large aggregations worth millions of dollars. ETFs are subject to market volatility. When buying or selling an ETF, you will pay or receive the current market price, which may be more or less than net asset value.
All investing is subject to risk, including the possible loss of the money you invest. Diversification does not ensure a profit or protect against a loss. Investments in bonds are subject to interest rate, credit, and inflation risk.