Vanguard expands fixed income offering

Vanguard has introduced the Vanguard Emerging Markets Bond Fund. The new actively managed fund provides UCITS investors with broad exposure to an important asset class that is often under-represented in portfolios.

“Emerging markets debt (EMD) is an asset class where we’ve seen a lot of performance differentiation among active managers. We believe a strong team and a rigorous investment process can really make a difference in delivering consistent alpha,” said Paul Jakubowski, Vanguard’s head of investment in Europe.

The fund will seek to provide total return while generating a moderate level of income by investing primarily in a broadly diversified portfolio of debt issued by EM countries. It will be managed by Vanguard’s global EM and sovereign debt team, led by Daniel Shaykevich.

The vehicle sits alongside the actively managed Vanguard Global Credit Bond Fund and complements the firm’s existing fixed income index funds, including the Vanguard USD Emerging Markets Government Bond UCITS ETF and Vanguard Global Bond Index Fund.

Nick Eisinger, EM strategy head and research lead, added that EMD remains under-represented in the main global fixed income indices. “As a result, many investors are underweight in this asset class and may wish to consider this fund as part of a well-diversified portfolio. The fund aims to capitalise on best-in-class opportunities, be it across countries, specific bonds or areas of the market,” he said.