Vanguard Australian Corporate Fixed Interest Index Fund
About this Fund
|FUND MANAGER||Vanguard Investments Australia|
|ASSET CLASS||EXCHANGE TRADED FUNDS|
The Fund seeks to track the return of the Bloomberg AusBond Credit 0+ Yr Index before taking into account fees, expenses and tax.
The Bloomberg AusBond Credit 0+ Yr Index is a market value weighted index comprising securities (bonds) that are of investment grade quality and typically include bonds issued by corporate entities such as the four largest banks in Australia, offshore banks, other lending institutions, property trusts and other corporate issuers.
|BENCHMARK||Bloomberg AusBond Credit 0+ Yr Index|
|FUND SIZE||Bloomberg AusBond Credit 0+ Yr Index|
|NO. OF HOLDINGS||300-400|
Benefits of investing in the Vanguard Australian Corporate Fixed Interest Index Fund
The significant features and benefits of investing in the Fund include:
The significant features and benefits of investing with Vanguard include:
Summary risk level
Investment strategy and investment return objective
The Fund seeks to track the return of the Bloomberg AusBond Credit 0+ Yr Index before taking into account fees, expenses and tax. It invests in investment grade bonds issued by corporations including Australia's four largest banks, offshore banks, other lending institutions and property trusts.
The Bloomberg AusBond Credit 0+ Yr Index is a value weighted index comprising securities (bonds) that are of investment grade quality and typically include bonds issued by corporate entities such as the four largest banks in Australia, offshore banks, other lending institutions, property trusts and other corporate issuers. The benchmark has a shorter duration than the broader composite index but a lower overall credit quality (BBB- or higher by Standard & Poor's ratings agency or equivalent) and therefore a higher expected yield.
Bond indices change far more quickly than share indices because bonds have a finite life (maturity). Index eligibility criteria such as time to maturity and investment grading may cause bonds to enter or fall out of the index at month end when the index is rebalanced. Every time a security is either added to or removed from the index, its composition changes and may require Vanguard to modify the portfolio.
How we invest your money
The Fund aims to hold an appropriate number of securities so as to produce a portfolio risk exposure profile consistent with that of the index. This is generally achieved by holding a representative sample of the securities included in the index. Security weightings in the Fund may vary from the index weightings. The Fund may exclude certain securities that are included in the index or may invest in securities that have been or are expected to be included in the index. The Fund may utilise derivatives, including over-the- counter derivatives, generally to manage the overall interest rate and credit risk exposure of the portfolio.
The use of over-the-counter derivatives will not be to a material extent - that is, use will generally not exceed 5% of the net asset value of the Fund, other than temporarily and in exceptional circumstances. Importantly, derivatives will not be used to leverage the assets of the Fund.
Strategic asset allocation*
Australian fixed interest 100%
*This is a targeted strategic asset allocation. In addition, cash may be held for the purposes of liquidity management and derivatives may be used to manage market exposure.