Asset-management giant Vanguard Group Inc. unveiled plans Thursday to launch a new exchange-traded fund in a rare move for one of the industry’s largest players.
The Vanguard Short-Term Tax-Exempt Bond ETF would track an index of municipal bonds with maturities between one month and seven years, according to a filing with the Securities and Exchange Commission. The fund would charge a fee of seven basis points.
Vanguard intends to launch the ETF, which will be managed by Vanguard Fixed Income Group, in the first quarter of 2023, the firm said in a statement Thursday.
The ETF is intended for investors seeking to generate tax-exempt yield in their portfolios while minimizing interest rate sensitivity. It will predominantly invest in short-term investment grade municipal bonds and will track the S&P 0-7 Year AMT-Free Muni Bond index. The ETF will have an estimated expense ratio of 0.07%, compared to 0.54% for the average short-term bond fund.
While Vanguard is the second-largest issuer in the $6.7 trillion ETF market, the Malvern, Pennsylvania-based company rarely introduces new products to its relatively lean lineup. It controls about $1.9 trillion of assets across 81 ETFs, while industry leader BlackRock Inc.’s $2.2 trillion haul is spread out across 392 funds, according to data compiled by Bloomberg.
The planned muni-bond fund would be the first new Vanguard ETF to launch since the debut of the $3 billion Vanguard Ultra Short Bond ETF (VUSB) in April 2021. Muni ETFs have had a banner year in 2022, with investors plowing a record $28.6 billion into the category, Bloomberg data show.
The potential new launch could come just months after Vanguard’s first-ever closure of a U.S. fund. The Vanguard U.S. Liquidity Factor ETF (VFLQ) was liquidated in late November after struggling to lure investors since debuting in 2018.
While industry statistics pointing to a succession crisis can cause alarm, advisor-owners should be free to consider a middle path between staying solo and catching the surging wave of M&A.
New joint research by T. Rowe Price, MIT, and Stanford University finds more diverse asset allocations among older participants.
With its asset pipeline bursting past $13 billion, Farther is looking to build more momentum with three new managing directors.
A Department of Labor proposal to scrap a regulatory provision under ERISA could create uncertainty for fiduciaries, the trade association argues.
"We continue to feel confident about our ability to capture 90%," LPL CEO Rich Steinmeier told analysts during the firm's 2nd quarter earnings call.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
