At Vanguard, we don’t take advantage of the latest investment fad. We’re strictly horse-before-the-cart investors. We choose indexes that capture the risks and rewards of key market segments at low cost.
And we don’t slice and dice. As Vanguard CEO Bill McNabb has said, “You’re not likely to see a Micro-Cap Unhedged Russian Biotech Value ETF from Vanguard.”
You will, however, see us seize opportunities to develop excellent products that we believe will last for decades.
Let me give you an example. For years we wanted to offer a total international bond ETF because that asset class can temper the risks of U.S. stocks and bonds. Until recently, portions of the international bond markets were illiquid, costly, and challenging to navigate. As those markets have expanded and taken on more of the positive characteristics of U.S. markets, liquidity has increased and expenses have fallen, leading us to launch Vanguard Total International Bond ETF.
This ETF buys investment-grade corporate and sovereign bonds, securities whose credit quality is considered sufficient to ensure timely payment of principal and interest under current economic circumstances. Our Total International Bond ETF also hedges against currency risk.
At Vanguard, the answer to “What’s new?” always leads to another question: “What can we build to last?”
Martha King is head of U.S. Financial Intermediaries and managing director of the Vanguard Financial Advisor Services Division.