The Fund targets a modified duration of seven to eight months to take advantage of the term yield premium that exists in this segment of the debt securities’ yield curve over the long term

The Fund aims to deliver regular income and a total return that exceeds that of the Bloomberg AusBond Bank Bill Index in two out of every three years, before taking into account fees, expenses and tax. Vanguard‘s approach to managing the Fund involves investing in high-quality money market and debt securities issued by a variety of government, government related and corporate entities in Australia. 

Benefits of investing in the Vanguard Short Term Fixed Interest Fund

The significant features and benefits of investing in the Fund include:

• Competitive long-term performance: Vanguard's investment approach provides investors with an efficient way to capture long-term market performance.

• Diversification: The Fund provides exposure to a diversified portfolio of securities, which means the Fund is less exposed to the performance fluctuations of individual securities. This moderates the volatility of the portfolio and smooths out' investment returns over time.

• Low cost investing: The Fund has low ongoing fees as we strive to minimise the costs of managing and operating the Fund. The Fund typically has low portfolio turnover resulting in low trading costs such as brokerage and other transaction costs.

The significant features and benefits of investing with Vanguard include:

• Stability and experience - The Vanguard Group, Inc. established the world's first index mutual fund for individual investors in 1976 and has been a leader in low cost index investing ever since. In Australia, Vanguard leverages the scale, experience and resources of our established global business. Investing in the Fund allows you to access the knowledge and skill of Vanguard as a specialist investment manager.

• Client focus - The Vanguard Group, Inc. was founded on a simple but revolutionary idea - that an investment company should manage the funds it offers in the sole interest of its clients. From rigorous risk management to transparent pricing to plain talk communications, we put our clients' interest first.

• Low costs - Investors can't control the markets, but they can control the costs of investing. Providing low cost investments isn't a pricing strategy for us. It's how we do business. Vanguard's scale also helps to keep costs low.

Risk level

Low

Investor suitability

Investors with a short-term investment horizon, or seeking a steady and reliable income stream.

Investors with a short-term investment horizon, or seeking a steady and reliable income stream.

About the Fund

The Fund provides low-cost access to high-quality money-market securities and bonds issued by government, government-related and corporate entities in Australia. The combination of short-term debt securities and money-market securities offers the potential for higher yields than traditional cash funds. The investments in the Fund are predominantly rated the equivalent of at least A- (long-term) by Standard & Poor's ratings agency or equivalent. The Fund targets a modified duration of seven to eight months.

Investment strategy and investment return objective

The Fund aims to deliver regular income and a total return that exceeds that of the Bloomberg AusBond Bank Bill Index in two out of every three years, before taking into account fees, expenses and tax.

Vanguards approach to managing the Fund involves investing in high-quality money market and debt securities issued by a variety of government, government related and corporate entities in Australia.

How we invest your money

The Fund targets a modified duration of seven to eight months to take advantage of the term yield premium that exists in this segment of the debt securities' yield curve over the long term. Combining short term debt securities with money market securities provides the potential for the Fund to deliver higher yields than traditional style cash funds.

The Fund's investment process is governed by a tightly controlled investment framework that seeks to reduce credit risk and ensure diversity of holdings across issuers. As part of this framework, the investments to which the Fund is exposed are restricted to:

• Commonwealth Government securities, high quality debt securities, and deposits secured by either;

• cash deposits with licensed banks; and

• derivative financial instruments provided they are not used to leverage the assets of the Fund.

Additional controls are also employed to manage risk and ensure liquidity of the Fund. These include: the Fund's modified duration is not permitted to exceed nine months; and

at least 65% of the Fund's investments must be held in liquid securities.

Strategic asset allocation

• Australian fixed interest 100%