Vanguard recently launched Vanguard Short Duration Bond ETF (VSDB), an active bond ETF managed by Vanguard Fixed Income Group. This exciting expansion of our fixed income lineup is designed to give you access to world-class active investment expertise at a low cost with the convenience and flexibility that comes with ETFs.
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Vanguard launches new short duration bond ETF
Vanguard has recently launched Vanguard Short Duration Bond ETF (VSDB), an actively managed bond ETF managed by Vanguard Fixed Income Group.
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The addition of Vanguard Short Duration Bond ETF reaffirms our commitment to meeting the evolving needs of investors who are increasingly seeking active bond solutions through an ETF wrapper.
—Sara Devereux, global head of Vanguard Fixed Income Group
How VSDB could benefit your portfolio
With an expense ratio of 0.15%, Vanguard Short Duration Bond ETF is designed to provide you with current income and lower price volatility consistent with short-duration bonds at a low cost. Here are some reasons you may want to consider adding it to your portfolio:
Multi-sector approach consistent with investors' preferences
VSDB offers diversified exposure and a multi-sector approach to short-duration U.S. investment-grade bonds—including structured products exposure, like asset-backed securities—with the flexibility to invest in below-investment-grade debt to seek additional yield.
Low cost
Its expense ratio matches the lowest in its category, differentiating it from relative major competitors. Active short-term bond ETFs have an average expense ratio of 39 bps—which is more than twice the cost of VSDB's 15 bps.1
Potential to outperform
If you like the flexibility and convenience of ETFs but you also want a fund with the potential to beat the index, VSDB could be what you're looking for. The ETF is an actively managed fund that uses a disciplined, risk-controlled approach. It seeks to outperform the Bloomberg U.S. Universal 1-5 Year Float Adjusted Index primarily through security selection and sector allocation.
"VSDB seeks to deliver consistent, reliable returns that, when compounded over time, can result in superior long-term outperformance," added Devereux.
Vanguard has a history of delivering quality fixed income ETFs and a strong track record as an investment manager—91% of Vanguard active fixed income funds outperformed their peer group averages over the past 10 years.2
Check out Vanguard Short Duration Bond ETF (VSDB)
How does Vanguard ensure quality and excellence?
As investors continue to gravitate to ETFs for their tax efficiency and flexible intraday trading, we continue to find ways to meet the needs of our clients. In every step, we ensure that all Vanguard products adhere to our established product design principles and meet our test of being sound and sensible while keeping long-term needs in perspective. Our bond portfolio managers combine Vanguard's top-down view on the economy, cycle location, policy, and market valuation with a bottom-up, research-driven security selection.
Time-proven expertise
For more than 40 years, Vanguard Fixed Income Group has distinguished itself with deep investment capabilities, disciplined security selection processes, and rigorous risk management techniques. Our Fixed Income Group is the world's largest manager of bond mutual funds and ETFs, overseeing the full spectrum of fixed income asset classes and sectors. This team has continuously refined its investment process and evolved decision-making constructs to improve fund performance.
The team has continuously refined its investment process and evolved decision-making constructs to improve fund performance. They manage more than $2.5 trillion in global assets and have nearly 200 investment professionals across the globe.3
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1Morningstar, as of February 28, 2025.
2For the 10-year period ending March 31, 2025, 42 of 46 Vanguard active bond funds outperformed their peer group averages; results will vary for other time periods. Only funds with a minimum 10-year history were included in the comparisons. Source: LSEG Lipper. Note that this competitive performance data represents past performance, which is not a guarantee of future results, and that all investments are subject to risks. For the most recent performance, visit our website at vanguard.com/performance.
3All figures as of March 31, 2025, unless stated otherwise.
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