Vanguard, the second-largest U.S. issuer of exchange traded funds, said it is changing the listing venue for the Vanguard Total Bond Market ETF (NSYEArca: BND) to Nasdaq from the New York Stock Exchagne (NYSE).
BND, one of the largest fixed income ETFs in the U.S., will make the switch on or about July 26. BND tracks a broad, market-value-weighted index of US dollar-denominated, investment-grade, taxable, fixed-income securities with maturities with at least one year. As of May 31, BND had $36.7 billion in assets under management, according to Vanguard data.
“By moving BND to Nasdaq, Vanguard aims to achieve certain benefits, including trading and liquidity synergies among its suite of total bond market ETFs,” according to a statement from Pennsylvania-based Vanguard. “Vanguard recently filed a preliminary registration statement for Vanguard Total World Bond ETF, which will invest primarily in two underlying ETFs: Vanguard Total Bond Market ETF and Vanguard Total International Bond ETF (BNDX). BNDX is currently listed on Nasdaq and it is anticipated that Vanguard Total World Bond ETF will also be listed on Nasdaq.”
BND Hold Mostly U.S. Government Bonds
BND holds nearly 8,470 bonds, almost two-thirds of which are U.S. government debt. The ETF’s average duration is 6.1 years. Duration measures a bond’s sensitivity to changes in interest rates. Over 26% of BND’s holdings are rated A or Baa.
BND charges just 0.05% per year, or $5 on a $10,000 investment, making the ETF less expensive than 93% of competing funds, according to Vanguard. Rival ETFs to BND include the Schwab US Aggregate Bond ETF (NSYEArca: SCHZ), SPDR Portfolio Aggregate Bond ETF (NSYEArca: SPAB) and the iShares Core US Aggregate Bond ETF (NSYEArca: AGG).
“Vanguard is also seeking diversity in the exchanges on which its ETFs trade,” according to the statement. “By diversifying Vanguard’s ETF lineup across all three major U.S. ETF exchanges, Vanguard seeks to mitigate operational risk and reduce exposure to potential exchange issues. Vanguard’s ETF Capital Markets team continually evaluates each product listing and its unique characteristics to select the optimal exchange for new and existing ETFs. Many of the U.S.-domiciled ETFs sponsored by Vanguard remain listed on NYSE Arca as Vanguard continues to consider NYSE Arca a strong listing partner.”
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