Vanguard launches emerging markets bond ETF


Vanguard has launched an emerging market bond Ucits, which will have the lowest ongoing charge figure in its peer group.

The Vanguard USD Emerging Markets Government Bond UCITS ETF launched on the London and Swiss stock exchanges today.

Its OCF is 0.25 per cent and the launch brings Vanguard’s total number of Irish-domiciled Ucits ETFs to 22.

It tracks the Bloomberg Barclays USD Emerging Markets Sovereign and Quasi Sovereign Index. 

Vanguard’s Andreas Zingg, head of ETF distribution management for Europe, says: “Following the US election and increased speculation on the possibility of a US rate hike, emerging market bonds have been in the headlines. In our view, investors should continue to keep a long-term perspective.

“As part of a balanced portfolio, bonds provide an important source of diversification, helping to stabilise returns over the long term. Investors can maximise this effect by also diversifying within their fixed income allocations.”

OCFs in Vanguard’s European ETFs range from 0.07 to 0.29 per cent compared to an industry average of 0.42 per cent.

Figures released from Square Mile today show some passive products can be 16 times more expensive than alternatives within the same sector.