Vanguard Active Bond Funds Offer Core-Plus Performance

Vanguard's active bond funds have consistently delivered strong performance, often beating their benchmark indexes.

These funds have outperformed the benchmark in over 60% of the periods measured, as shown in the Vanguard Active Bond Fund Performance table.

Their core-plus approach allows them to invest in a wide range of bond types, including high-yield bonds, international bonds, and mortgage-backed securities.

Investing in active bond funds can be a great way to diversify your portfolio and potentially achieve higher returns. Data from LSEG Lipper shows that for the 10-year period, 42 out of 44 bond funds outperformed their peer-group averages.

The Vanguard Core Bond Fund, for example, has a low expense ratio of 0.1000%, which has helped drive comparable returns. In fact, its expense ratio is significantly lower than its peers, such as the American Funds Bond Fund of Amer F3, which has an expense ratio of 0.2400%.

Active management allows portfolio managers to seek the best opportunities in the market and navigate inefficiencies, potentially generating higher-than-market returns. The Vanguard Core Bond Fund has consistently outperformed its category index over the past eight-year period, outperforming by an annualized 46 basis points.

Here's a comparison of the Vanguard Core Bond Fund with similar funds at other firms:

By choosing an active bond fund, you can select the level of risk you're comfortable with. The Vanguard Core Bond Fund offers exposure primarily to U.S. investment-grade securities, while the Core-Plus Bond ETF has a slightly higher allocation to riskier sectors.

Investing in active bond funds can provide a sense of security and stability to your portfolio. By diversifying with these funds, you can gain broad exposure to the bond market.

Low costs are another advantage of investing in these funds. Our estimated expense ratios are significantly lower than the average for our peer-group, with 0.10% for VCRB and 0.20% for VPLS, compared to 0.27% and 0.48% for the Morningstar category averages.

Active management allows our portfolio managers to navigate the complexities of the fixed income markets and seek the best opportunities. This approach offers the potential to generate higher-than-market returns.

You have the flexibility to choose the level of risk you're comfortable with, whether it's the Core Bond ETF with its modest allocations to riskier sectors, or the Core-Plus Bond ETF with its slightly higher allocation to high-yield and emerging markets.

The Vanguard Core-Plus Bond ETF is a great option for investors looking to diversify their portfolios and generate income. It's not redeemable directly with the issuing fund, except in very large aggregations worth millions of dollars.

You'll need to buy and sell Vanguard ETF Shares through Vanguard Brokerage Services or another broker, who may charge commissions. Vanguard ETF Shares are commission-free online through Vanguard Brokerage Services.

Bond funds like the Vanguard Core-Plus Bond ETF are subject to the risk that an issuer will fail to make payments on time and that bond prices will decline because of rising interest rates or negative perceptions of an issuer's ability to make payments. This is a risk you should be aware of before investing.

The Vanguard Core-Plus Bond ETF has a High Process Pillar rating from Morningstar, Inc., based on its parent firm's superior long-term risk-adjusted performance. This suggests that the fund may benefit from the firm's expertise.

Here are some key facts about the Vanguard Core-Plus Bond ETF:

Remember, there's no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income.

Investing in active bond funds can be a smart move, especially when you consider the benefits of core bond funds. Our Core Bond active fund has historically lower fund expense ratios, which can help drive comparable returns.

The Vanguard Core Bond Fund, for instance, has a gross expense ratio of 0.1000%, compared to 0.2400% for the American Funds Bond Fund of Amer F3. This lower cost can translate to higher returns for investors.

By investing in a core bond fund, you can diversify your portfolio and reduce risk. The Vanguard Core Bond Fund, for example, provides broad exposure to the bond market, making it a great core holding or complement to other fixed income holdings.

Here's a comparison of the estimated expense ratios for our Core Bond ETFs:

You can choose the level of risk you're comfortable with. The Core Bond ETF offers exposure primarily to U.S. investment-grade securities with modest allocations to riskier sectors.

Active bond funds can be a great way to diversify your portfolio and potentially earn higher returns. The overall outlook for bonds is notably positive in 2025, with starting yields offering the prospect of strong income.

The Vanguard Core Bond Fund earns a High Process Pillar rating, thanks to its parent firm's superior long-term risk-adjusted performance. This means the fund has a strong track record of beating its category's median return over the past 10 years.

To buy and sell Vanguard ETF Shares, you must go through Vanguard Brokerage Services or another broker, who may charge commissions. This is because Vanguard ETF Shares are not redeemable directly with the issuing fund, except in very large aggregations worth millions of dollars.

Here are some key benefits of active bond funds like Vanguard Core Bond Fund:

Active fixed income funds have consistently outperformed their peer-group averages over the past decade. In fact, Vanguard's active fixed income team has been delivering top-tier returns for over 40 years.

According to data from LSEG Lipper as of June 30, 2024, 42 out of 44 bond funds outperformed their peer-group averages over the 10-year period. This impressive track record is a testament to the team's expertise and commitment to delivering consistent, long-term outperformance.

One notable example is the Vanguard Core Bond Fund, which has earned a High Process Pillar rating from Morningstar. This rating is based on the fund's parent firm's superior long-term risk-adjusted performance, as well as its respectable success ratio and strong risk-adjusted performance.

Here's a comparison of the Vanguard Core Bond Fund with similar funds at other firms:

Note that past performance is not a guarantee of future results, and all investments are subject to risks.

Credit risk is a significant concern for bond investors. High-yield bonds, which have medium- and lower-range credit quality ratings, are subject to a higher level of credit risk than bonds with higher credit quality ratings.

Bond funds are exposed to the risk that an issuer will fail to make payments on time, which can cause bond prices to decline. This is especially true for bonds of companies based in emerging markets, which are subject to national and regional political and economic risks.

Diversification is often touted as a way to manage credit risk, but it's essential to understand that it doesn't guarantee a profit or protect against a loss.

As we navigate the uncertain landscape of the US economy, it's essential to consider the various factors that can impact the market. Economic momentum is currently healthy, with household and corporate balance sheets driving spending and growth.

The size and distribution of tariffs could dampen growth while potentially boosting inflation, and geopolitical retaliation could increase business uncertainty and further constrain growth. This is a crucial consideration for investors looking to navigate the market.

Here are the key factors that could influence US market performance this year:

With so many variables at play, it's crucial to approach the market with caution and a long-term view.

As we navigate the uncertain landscape of the US economy, it's essential to understand the key factors that will shape market performance in the coming year.

Economic momentum is a crucial factor, with household and corporate balance sheets in a healthy state, driving spending and bolstering growth.

Tariffs, on the other hand, could dampen growth while potentially boosting inflation, depending on their size and distribution.

Immigration policy is another critical factor, with border policy and implementation potentially sharply curbing immigration, reducing labor supply, and dampening future growth.

Fiscal policy decisions, including tax and spending choices, could have an expansionary and inflationary impact, pushing yields high enough to slow the economy down.

Deregulation could spur innovation and productivity, but its implementation is uncertain and may impact different sectors of the economy in varying ways.

Here are some key factors to consider:

The overall outlook for bonds is notably positive in 2025, with starting yields offering the prospect of strong income.

To keep your clients informed, consider sharing Vanguard's quarterly product commentary, Active Fixed Income Perspectives. This can help them understand the strategies you're considering for their fixed income investments.

Vanguard Core-Plus Bond or Core Bond funds (or ETFs) can help fixed income returns by going beyond the Aggregate Bond Index. This can provide more opportunities for growth.

Here are some key facts about Vanguard Core Bond Fund:

By sharing these insights with your clients, you can help them feel more informed and confident in their investment decisions.

Vanguard Fixed Income Lineup is a robust and reliable option for investors seeking steady returns. Vanguard Core Bond Fund earns a High Process Pillar rating from Morningstar, thanks to its parent firm's superior long-term risk-adjusted performance.

The fund's success ratio of 71% over the past five years suggests that it has done well for investors. Vanguard Core Bond Fund has also outperformed its category index over the past eight years, beating it by an annualized 46 basis points.

One way to compare Vanguard's Core Bond fund to similar ones at other firms is to look at their expense ratios. Vanguard Core Bond Fund has historically had a lower expense ratio, which has helped drive comparable returns.

Here's a comparison of Vanguard Core Bond Fund with two similar funds from other firms:

The performance data shown represents past performance, which is not a guarantee of future results.