Vanguard plans to launch another actively managed fixed income ETF, Vanguard Multi-Sector Income Bond ETF Shares (VGMS), in June, the asset manager reported Monday in a preliminary prospectus with Securities and Exchange Commission.
The new ETF, which seeks to provide total return while generating moderate to high current income, will mirror the company's Vanguard Multi-Sector Income Bond Fund (VMSIX, VMSAX), according to Jeff DeMaso, who edits the Independent Vanguard Adviser.
The new ETF's 0.30% expense ratio matches the cost of the mutual fund's Admiral shares and is cheaper than the Investor shares' 0.45% expense ratio, he noted.
"Yet another actively managed bond ETF from Vanguard is coming — I suspect more are on the way," DeMaso wrote in the newsletter.
Since Vanguard already offers ETF versions of other bond mutual funds, this launch was fairly obvious, he said.
"However, the most interesting aspect of this ETF — in my opinion — is that it opens the door for Vanguard to launch a junk bond ETF and an ETF version of its diamond-in-the-rough Emerging Markets Bond (VEMBX)," DeMaso wrote.
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