Vanguard Launched Four Bond ETFs

By Sun

Last month while I was researching on ETFs for the Model Portfolios Built with ETFs series, I noticed that mutual fund gaint Vanguard (I guess they will soon be an ETF powerhouse as well) didn’t have any fixed income ETF offerings. All existing ETFs are equity ETFs.

Well, that has just changed as Vanguard introduced four bond ETFs early this week. The four bond ETFs are:

  • Total Bond Market ETF (BND), tracking Lehman Brothers Aggregate Bond Index
  • Short-Term Bond ETF (BSV), tracking Lehman Brothers 1–5 Year Government/Credit Index
  • Intermediate-Term Bond ETF (BIV), tracking Lehman Brothers 5–10 Year Government/Credit Index
  • Long-Term Bond ETF (BLV), tracking Lehman Brothers Long Government/Credit Index

All these bond ETFs have an expense ratio (ER) of 0.11% and they will, as Vanguard stated, provide investors an “efficient exposure to the broad U.S. bond market.” The next I’d like to see from Vanguard is an international bond ETF as currently nobody is offering foreign bond index ETFs (there are, however, regional bond ETFs).

Vangaurd’s competetors in the fixed income ETF arena include

  • iShares Lehman Aggregate Bond (AGG)
  • iShares Lehman 1-3 Year Treasury Bond (SHY)
  • iShares Lehman 3-7 Year Treasury Bond (IEI)
  • iShares Lehman 10-20 Year Treasury Bond (TLH)

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ETF, Investing

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6 Responses to “Vanguard Launched Four Bond ETFs”

  1. blackhawkzone |  Apr 12, 2007 at 12:39 pm

    these bond funds from vanguard do have some international bonds in them

  2. The Sun |  Apr 12, 2007 at 12:47 pm

    Actually, what I am looking for is some international bond ingredients in an ETF, but product like total international bond index ETF. I don’t think anybody has that yet.

  3. JasonP |  Jun 18, 2008 at 3:30 pm

    What about BWX?

  4. Sun |  Jun 22, 2008 at 1:10 am

    Jason: I am sure there are other bond ETFs that I didn’t include. Besides, BWX is later than those Vanguard ETFs, which means BWX didn’t exist when I wrote the post :)