Vanguard Global Aggregate Bond Index (Hedged) ETF (VBND)
About this Fund
|FUND MANAGER||Vanguard Investments Australia|
|ASSET CLASS||EXCHANGE TRADED FUNDS|
|INVESTMENT STYLE||The Fund provides low cost exposure to high-quality, income-generating securities and securitised assets from around the world.|
|INVESTMENT PROFILE||The Fund seeks to track the return of the Benchmark before taking into account fees, expenses and tax.|
|BENCHMARK||Bloomberg Barclays Global Aggregate Float-Adjusted and Scaled Index hedged into AUD|
|FUND SIZE||Bloomberg Barclays Global Aggregate Float-Adjusted and Scaled Index hedged into AUD|
|NO. OF HOLDINGS||5000+|
Benefits of investing with Vanguard
Competitive long-term performance
Vanguard's investment approach provides investors with an efficient way to capture long-term market performance.
The Fund invests in a diversified portfolio of securities, which means the Fund is less exposed to the performance fluctuations of individual securities.
Low cost investing
The Fund has low ongoing fees as we strive to minimise the costs of managing and operating the Fund.
Investors seeking exposure to a diversified portfolio of international fixed interest securities that is relatively unaffected by currency fluctuations.
About the Fund
Vanguard Global Aggregate Bond Index (Hedged) ETF seeks to track the return of the Bloomberg Barclays Global Aggregate Float-Adjusted and Scaled Index hedged into Australian dollars before taking into account fees, expenses and tax.
The ETF provides low cost exposure to high-quality, income-generating securities issued by governments, government-owned entities, government-guaranteed entities, investment-grade corporate issues and securitised assets from around the world. The investments in the ETF are predominantly rated BBB- or higher by Standard & Poor's or equivalent ratings agency. The ETF is hedged to Australian dollars so the value of the ETF is relatively unaffected by currency fluctuations.
What is an ETF?
An ETF is an Exchange Traded Fund, which is quoted for trading on the AQUA market of the ASX (in this case, it is the CDIs that are quoted for trading on the AQUA market of the ASX). Generally, these exchange traded funds comprise broadly diversified investment portfolios of either shares, bonds or real estate securities and are constructed using an indexed investment methodology.
ETFs seek to combine the best features of index managed funds and listed shares in one investment. Vanguard ETFs come with the benefits of low cost, broad diversification, transparency and tax efficiency due to low turnover of the underlying securities. However, unlike traditional index funds which are priced only once per day, ETF securities trade on a stock exchange so they can be bought and sold at any time during the trading day at prevailing market prices. ETFs carry certain risks (refer to the section 2. Risks' in the PDS for further details).
Who is Vanguard?
Vanguard Investments Australia Ltd (Vanguard) is a wholly owned subsidiary of The Vanguard Group, Inc. With more than AUD$6.9 trillion in assets under management as of 31 December 2018, including over AUD$1.2 trillion in ETFs; The Vanguard Group Inc is one of the world's largest global investment management companies. In Australia, Vanguard has been serving financial advisers, retail clients and institutional investors for more than 20 years.
How we invest your money
The Fund seeks to track the return of the Bloomberg Barclays Global Aggregate Float Adjusted Bond Index hedged into Australian dollars, before taking into account fees, expenses and tax.
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 achieved by holding a representative sample of securities included in the index or securities that provide similar characteristics to those securities 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 gain exposure to securities directly or through interests in other funds, such as exchange traded funds.
The Fund may utilise derivative instruments including futures traded on a licensed exchange and over the counter derivative financial instruments. Derivative instruments are used to manage the overall interest rate and credit risk exposure of the Fund where it is either unable to invest directly in physical securities or is in the Fund's best interest to do so. Derivative financial instruments will not be used for speculative purposes or to leverage the assets of the Fund. Vanguard will seek to hedge the Fund's currency exposure back to the Australian dollar using forward foreign exchange contracts.
The use of over-the-counter derivatives, other than forward foreign exchange contracts, will not be used 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.
The Bloomberg Barclays Global Aggregate Float-Adjusted and Scaled Index hedged into Australian dollars is a market value weighted index comprised of global investment grade securities (bonds). This includes government, government- related, corporate and securitised fixed rate bonds from both developed and emerging market issuers.
Securities are included in the index based on issue size, amount outstanding and security type. New market inclusion is reviewed on an annual basis through the Bloomberg index governance process. To be included, debt securities must be investment grade and sufficiently tradable, convertible and hedgeable for offshore investors.
The index methodology uses standard rules based index methodology and market capitalisation weighting. The methodology includes the rules for constituent rebalancing, constituent inclusion, pricing sources, frequency and timing. The Index was not created by, and is not managed by, a related body corporate of Vanguard.