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.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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