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Vanguard has ended its more than two-year launch hiatus in Europe with a pair of short-dated euro fixed-income exchange-traded funds, ETF Stream can reveal.
The Vanguard EUR Eurozone Government 1-3 Year Bond UCITS ETF (VSGF) and Vanguard EUR Corporate 1-3 Year Bond UCITS ETF (VSCF) will be listed on the Deutsche Boerse, Borsa Italiana, Euronext Amsterdam and SIX Swiss Exchange with total expense ratios (TER) of 0.07% and 0.09%, respectively.
VSGF will look to replicate the performance of the Bloomberg Euro-Aggregate: Treasury 1-3 Year index, while VSCF will track the Bloomberg Euro Corporate 500 1-3 Year index.
Expanded Lineup of Bond ETFs
Vanguard Head of Europe Jon Cleborne said, “With the 'baby boomer' generation in or entering retirement, and in an era of persistent higher interest rates, the importance of bonds in an investor’s portfolio will only continue to grow."
However, it remains a market “plagued by opaqueness and high costs,” he noted. “Investors deserve better, and we are taking steps to remedy this with an expanded lineup of bond ETFs.”
Mark Fitzgerald, head of product specialism at Vanguard Europe, said these particular exposures were following a “rigorous research process” assessing the needs of investors in the firm’s focus geographies.
Vanguard Changes Its Tone
Since entering the European market in 2012, the $10.1 trillion U.S. asset manager has adopted a measured approach to ETF rollouts with just 34 products in its offering prior to today’s expansion.
This stands in contrast to Europe’s big three issuers—BlackRock, Amundi and DWS—which have more than 1,000 exchange-traded products between them.
However, product specialists at the Pennsylvania-based firm told ETF Stream there had been a "tone change" on product development since Salim Ramji joined as CEO from BlackRock in July 2024.
Active fixed income appears to be a particular area of focus. Kelly Gemmell, head of fixed-income product specialism at Vanguard, said, “We are really good at active management on the fixed-income side, and I think the numbers back that up. We are also really good on the ETF side.
“So could I see a situation where those two come together? I would like to see it. I can imagine that marriage working really well, but the fact remains that we are very thoughtful with our processes.”
This article was originally published at etf.com sister publication ETF Stream.