Products November 23, 2009

Vanguard Introduces 7 Bond Index Funds

Vanguard has introduced seven bond index funds with ETF shares featuring expense ratios of 0.15%.

Reported by

The funds, which expand Vanguard’s bond index family to 12, also offer Signal shares with estimated expense ratios of 0.15% and Institutional shares with expense ratios of 0.09%, according to a press release.

The funds and the benchmarks they seek to track are as follows:

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Fund (ETF Ticker)

Barclays Capital Index

Vanguard Short-Term Government Bond Index Fund (VGSH)

U.S. 1–3 Year Government Float Adjusted Index

Vanguard Intermediate-Term Government Bond Index Fund (VGIT)

U.S. 3–10 Year Government Float Adjusted Index

Vanguard Long-Term Government Bond Index Fund (VGLT)

U.S. Long Government Float Adjusted Index

Vanguard Short-Term Corporate Bond Index Fund (VCSH)

U.S. 1–5 Year Corporate Index

Vanguard Intermediate-Term Corporate Bond Index Fund (VCIT)

U.S. 5–10 Year Corporate Index

Vanguard Long-Term Corporate Bond Index Fund (VCLT)

U.S.Long Corporate Index

Vanguard Mortgage-Backed Securities Index Fund  (VMBS)

U.S. MBS Float Adjusted Index


“Vanguard’s expanded fixed-income lineup provides greater choice and more price competition in the market, and offers financial advisers and institutions more flexibility to tailor the credit quality and duration of their bond exposure,” said Gus Sauter, Vanguard’s chief investment officer, in the release.  

Vanguard noted that unlike a conventional bond index fund, a bond ETF can trade at a substantial premium or discount to its net asset value based on overall supply and demand of bonds in the market. The firm published an article, “The choice between ETFs and conventional fund shares,” in the autumn 2009 edition of its shareholder newsletter. The article examines the similarities and differences between the two products.  Investors can request a free copy of the newsletter by calling 877.662.7447, or read it at www.vanguard.com/share-choices.

The new bond index funds will be managed by the Vanguard Fixed Income Group, which oversees nearly $485 billion in assets, including $114 billion in bond index fund assets and $10.4 billion in bond ETF assets.

Interested parties can call 800.662.7447 to obtain a fund prospectuses.
Products November 23, 2009

Fiduciary Benchmarks Helps Evaluate Participant Retirement Preparedness

Fiduciary Benchmarks and Bdellium, designer of quantitative evaluation systems, have launched the Retirement Readiness Index (RRI) for 20,000 retirement plans.

Reported by

The firms said the index includes virtually every plan with more than $10 million in assets.

The RRI is designed to help plan advisers and other service providers assist plan sponsors with evaluating how well their employees are preparing for a secure retirement, according to a press release. An RRI value of 112% means a participant is projected to have 12% more than he needs at retirement, while an RRI value of 92% means the participant is falling 8% short of his retirement goal.

The RRI uses the Aon Consulting/Georgia State University study on wage replacement ratios to determine how much money an individual needs for retirement. Advisers or service providers can obtain an RRI for each participant in the plans they serve by providing Fiduciary Benchmarks with a minimal number of existing data points, such as an employee’s date of birth.

The RRI number for any of the 21,000 plans covered is publicly available at www.fiduciarybenchmarks.com/RRI. Each plan’s RRI can be updated by authorized plan personnel in a secure manner by registering on the site.

An analysis of each plan’s RRI, including comparisons to similar companies, is available for a nominal price, the press release said. Each benchmark group consists of companies in the same industry as defined by the North American Industry Classification System (NAICS), and are further refined by number of employees per plan.

Fiduciary Benchmarks offers discounts on RRI reports purchased through advisers and other service providers.

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