Vanguard Core-Plus Bond Fund aims to outperform the bond market and provide broad diversification to help reduce portfolio volatility.
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Coming soon: Vanguard Core-Plus Bond Fund

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September 09, 2021
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Bonds

We’re introducing a new bond fund to our lineup of active fixed income products: Vanguard Core-Plus Bond Fund. Designed to be an all-in-one bond solution for your overall portfolio, it has a conservative-to-moderate risk profile. You can use it as your only bond holding or combine it with our other bond funds for a more customized balance of risk and return.

The fund will launch on October 25. However, you’ll have the opportunity to invest in it early during a subscription period that will start on or around October 12.

Here’s how the new fund fits into our lineup—and may fit your portfolio.

Vanguard Core-Plus Bond Fund seeks to offer:

Outperformance

Our Fixed Income Group will pursue outperformance of the fund’s benchmark* by investing in carefully selected taxable fixed income securities, including those in high-yield corporates and emerging markets debt. Over the past 10 years, more than 88% of our actively managed funds performed better than their peer-group averages.**

Active management

For nearly 40 years, Vanguard Fixed Income Group has been distinguished in the industry by its deep investment capabilities, disciplined security selection process, and rigorous risk management techniques. These experienced fund managers will seek to proactively monitor and adjust fixed income allocations to meet changing market conditions.

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Diversification

Even with interest rates at historic lows, bonds still play an important role in your portfolio by helping to add stability to your asset mix. Our Core-Plus Bond Fund will invest across multiple areas of the fixed income market. As an active, diversified centerpiece of your fixed income allocation, it could potentially add balance to your portfolio—while still aiming for higher yields.

Conservative to moderate risk profile

The Core-Plus Bond Fund differs from the Vanguard Core Bond Fund by seeking higher performance, particularly through greater exposure to riskier bonds like high-yield corporates and emerging markets debt. It’s expected to have greater volatility of returns and diverge from its benchmark more than the Core Bond Fund. Consider how the fund’s higher risk level aligns with your personal risk tolerance as a fixed income investor.

Low costs

With estimated expense ratios of 0.20% (Admiral™ Shares) and 0.30% (Investor Shares), the Core-Plus Bond Fund is expected to be less expensive than other funds in the category. The average asset-weighted expense ratio of funds in the Morningstar core-plus bond category was 0.48% as of June 30, 2021.

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*The fund will strive to outperform Bloomberg Barclays U.S. Universal Total Return Index.

**For the 10-year period ended June 30, 2021, 7 of 7 Vanguard money market funds, 39 of 44 Vanguard bond funds, 6 of 6 Vanguard balanced funds, and 31 of 37 Vanguard stock funds―for a total of 83 of 94 Vanguard funds―outperformed their Lipper peer-group averages. Results will vary for other time periods. Only actively managed funds with a minimum 10-year history were included in the comparison. Source: Lipper, a Thomson Reuters Company. The competitive performance data shown represent past performance, which is not a guarantee of future results. View the most recent fund performance

A registration statement relating to Vanguard Core-Plus Bond Fund has been filed with the Securities and Exchange Commission (SEC) but has not yet become effective. The SEC has not approved or disapproved this security or passed upon the adequacy of this fund’s preliminary prospectus. Any representation to the contrary is considered a criminal offense. This security may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This communication shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, this security in any state in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

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. Bond funds are subject to the risk that an issuer will fail to make payments on time, and that bond prices will decline because of rising interest rates or negative perceptions of an issuer’s ability to make payments.