BNDX will be the ETF share class of the new fund. The ETF will have an estimated expense ratio of 0.20%, according to Vanguard.
The Total International Bond Index Fund will seek to track the performance of the Barclays Global Aggregate ex-USD Float Adjusted RIC Capped Index (USD Hedged), Vanguard said. The index comprises approximately 7,000 investment-grade corporate and government bonds from 52 countries. The index caps its exposure to any single bond issuer, including government issuers, at 20% to meet regulated investment company (RIC) tax diversification requirements. The top country holdings as of April 30, 2013 were Japan (22%), France (11%), Germany (11%), Italy (8%), and the United Kingdom (8%).
The new offerings round out Vanguard’s lineup of total market funds, including portfolios for U.S stocks and bonds, and global equities.
“Our broad market index funds enable individual investors, financial advisors, and institutions to build broadly diversified, balanced investment portfolios at an extremely low cost,” said Vanguard CEO Bill McNabb. “We’ve seen a growing number of investors adopt low-cost, diversified investment programs through our all-in-one funds or assemble their own balanced portfolios using our broad-based funds and ETFs.”
The company also plans to roll out ETF shares of Vanguard Emerging Markets Government Bond Index Fund on Tuesday. The ETF will trade under the ticker VWOB.