December 16, 2007 at 1:00 pm by Tom Lydon
Vanguard has another entrant in the exchange traded fund (ETF) marketplace: the Vanguard Extended Duration Treasury (EDV), listed on the American Stock Exchange. The fund tracks the Lehman Brothers Treasury STRIPS 20-30 Year Equal Par Bond Index, reports Index Universe.
As explained on Huliq, a Treasury STRIP is a single coupon payment, or a single principal payment, from a U.S. Treasury security that has been "stripped" down into separate, tradable components. Vanguard’s new ETF is primarily meant to be a tool for the pension fund industry. It can be used to help align the duration of a plan’s assets with its pension obligations.
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