Vanguard on Thursday announced the launch of 10 Vanguard Target Maturity Corporate Bond ETFs, or "BondBuilder" TMEs, an index exchange-traded fund lineup designed to help investors build precise, customized fixed income portfolios.
The ETF suite provides flexible, goals-based income products that allow targeted fixed income maturity exposures and, when combined, an alternative to bond ladders and separately managed accounts for select investors, Vanguard said.
"As investors reassess fixed income's role in portfolios, there is growing demand for approaches that provide the flexibility and control needed to address an increasingly broad set of investment goals," said Geoff Parrish, Vanguard global head of fixed income indexing.
The new lineup combines the approach of holding bonds to maturity with the benefits of the ETF structure, providing professionally managed, broadly diversified exposure across corporate bond issuers and sectors, he said.
Each ETF has a 0.08% expense ratio, making the lineup the lowest-cost target maturity ETFs on the market, and the funds are designed to help investors manage interest rate and credit risk while simplifying portfolio construction, Vanguard said.
Joshua Barrickman and Jake Riley are the portfolio managers.
Target maturity bond ETF tools solve specific problems, such as building bond ladders or covering specific future expenses, Jeff DeMaso, editor of the Independent Vanguard Adviser, said in the newsletter earlier this month.
"If that's your goal, Vanguard's low-cost entry into the market is a welcome addition," he said. "But if you're building a diversified portfolio of stocks and bonds for the long run, your existing bond fund will continue to do the job just fine."
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