Vanguard unveils new single-ticket global bond ETF

ETF made up of two existing underlying aggregate bond index ETFs, features management fee of 0.30%

Vanguard unveils new single-ticket global bond ETF

Vanguard Investments Canada Inc. has announced the listing of a new single-ticket, low-cost global fixed income ETF.

Made up of two existing underlying Vanguard aggregate bond ETFs, the Vanguard Global Aggregate Bond Index ETF (CAD-hedged) began trading on the TSX on Thursday under the ticker VGAB.

Kathy Bock, managing director and head of Vanguard Investments Canada Inc, said: “Canadian investors and advisors are increasingly going global for simple, low-cost and well-diversified fixed income solution.

“We are pleased to serve those needs with a single-ticket fixed income ETF that is broadly diversified and is unique in its category.” 

The ETF seeks to track the Bloomberg Barclays Global Aggregate Float Adjusted Composite Index (CAD-hedged). It invests directly or indirectly in a wide spectrum of the global investment grade fixed income markets, and uses derivative instruments to seek to hedge the foreign currency exposure of the securities included in the index to the Canadian dollar. 

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The ETF is composed of two underlying Vanguard low-cost aggregate bond ETFs, the Vanguard U.S. Aggregate Bond Index ETF (CAD-hedged) TSX:VBU, and the Vanguard Global ex-U.S. Aggregate Bond Index ETF (CAD-hedged) TSX:VBG.  

Scott Johnston, head of product, said: “Canadians can access a broad global universe of over 15,000 fixed income securities in one fund, with diversification across different countries, issuers and term structures, overseen by Vanguard’s disciplined global fixed income investment teams.”

The Vanguard Group is one of the world’s largest fixed income managers with more than $1 trillion (USD) in global assets. This new ETF will be sub-advised by Vanguard’s Fixed Income Group. It brings the total number of Vanguard ETFs in Canada to 40, with $25 billion (CAD) in ETF assets under management.