In a significant move for investors, Vanguard has just introduced two new Exchange-Traded Funds (ETFs) that could serve as alternatives to traditional high-yield savings accounts. The newly launched funds are:
- Vanguard Ultra-Short Treasury ETF (VGUS)
- Vanguard 0-3 Month Treasury Bill ETF (VBIL)
These ETFs are designed to offer investors a low-risk, liquid option for their short-term cash needs. VGUS aims to track the Bloomberg Short Treasury Index, which includes U.S. Treasury securities with maturities of less than one year. On the other hand, VBIL focuses on the Bloomberg U.S. Treasury Bills 0-3 Months Index, providing exposure to the shortest-maturity Treasury bills available.
Both ETFs boast an estimated expense ratio of just 0.07%, making them cost-effective options for investors. With short durations and low volatility, these funds are expected to bridge the gap between money market funds and ultra-short-term bond funds. Vanguard’s goal with these new ETFs is to offer investors a more diverse product range and complement their existing lineup of active and passive funds.
The launch of VGUS and VBIL reflects Vanguard’s commitment to providing investors with flexible and precise portfolio-building tools. These funds are managed by Vanguard’s Fixed Income Group, which has a long history of managing index funds since 1986. With over $2.5 trillion in global assets under management, Vanguard continues to be a leader in the ETF space.
VGUS and VBIL are designed to serve as part of investors’ liquidity toolkit. They offer exposure to U.S. Treasury securities, have short durations, and low volatility, and are expected to have tight bid-ask spreads. VGUS will track the Bloomberg Short Treasury Index, which includes U.S. Treasury Bills, Notes, and Bonds with less than 12 months until maturity. Meanwhile, VBIL will follow the Bloomberg U.S. Treasury Bills 0-3 Months Index.
Both ETFs have an estimated expense ratio of just 0.07%, positioning each ETF as a low-cost leader in its respective category. Vanguard’s Fixed Income Group, a world leader in fixed income with over $2.5 trillion in global assets under management, will advise the new ETFs. The group has been managing index funds since 1986, when it launched Vanguard Total Bond Market Index Fund, the world’s first bond index fund.
Sources:
https://investor.vanguard.com/investment-products/etfs/profile/vgus