In the current market environment beset by rising interest rates, continued market volatility, and the threat of an impending recession, many fixed income investors have become more risk-off. Bonds can offer investors a safe haven against stock market volatility, while short-term bonds limit the risks of potential rate rises that can rob investors of fixed income opportunities.
So, it makes sense that Vanguard’s head of fixed income products Jeff Johnson recently told VettaFi that the investment giant has seen a lot of client interest in the Vanguard Short-Term Treasury ETF (VGSH), which offers investors treasury exposure on the front end of the yield curve.
“Given the uncertainty in the overall market environment, we have seen many investors look to improve the credit quality in their portfolio,” Jackson said.
See more: “Vanguard’s Jackson and Johnson on Indexed Muni Demand”
VGSH seeks to provide current income with modest price fluctuation, invests primarily in high-quality (investment-grade) U.S. Treasury bonds. The fund maintains a dollar-weighted average maturity of one to three years.
“We hear from a lot of clients that are managing portfolios of T-Bills,” Johnson added. “This product offers a single ticker solution that can streamline an investor’s portfolio and potentially even lower cost.”
With an expense ratio of 4 basis points, Johnson described VGSH as a “low cost, highly liquid” ETF.
At Exchange 2023, Vanguard CEO Tim Buckley said that the asset manager’s goal is “to make sure we’re producing the top-performing funds and ETFs out there.”
“We’ll wrap it with low-cost, scalable advice and deliver them on a world-class, digitally enabled platform,” he added. “And if you do that well and you can keep improving it, you’ll create value into the future.”
For more news, information, and analysis, visit the Fixed Income Channel.