Vanguard launches short-dated global bond tracker

Vanguard has added a Global Short-Term Bond Index fund to its range of fixed income trackers.

The product has a total expense ratio of 0.2 per cent. It tracks the Barclays Global Aggregate 1-5 Years ex-US MBS Float Adjusted Bond index and is managed on a hedged basis, Vanguard said, to limit currency-related volatility.

The index contains government bonds, investment grade bonds, government-related bonds and mortgage-backed securities issued outside of the US.

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Nick Blake, head of retail at Vanguard, said the launch was in response to adviser demand.

“Short-term bond funds are an important part of an adviser’s risk management tool kit and advisers tell us they do not have enough choice in this space,” he said.

The fund will track and will invest broadly across a global universe of securities including Government, investment grade corporate, Government related and securitised ex-US mortgage-backed securities.