What is the VBND ETF used for?
The Vanguard VBND ETF provides investors with exposure to government debt and investment-grade corporate debt from developed markets around the world.
VBND may be used by investors to gain exposure to global debt markets, providing diversification benefits to an existing equity or Australian debt portfolio. It may also be used by investors seeking to gain a regular income stream from the quarterly distributions.
Keep an eye on FUM
The Vanguard VBND ETF had $489.11 million of money invested when we last pulled the monthly numbers. Given VBND’s total funds under management (FUM) figure is over $100 million, the ETF has met our minimum criteria for the total amount of money invested, otherwise known as FUM. We draw the line at $100 million for ETFs in the Fixed interest – International sector because we believe that relative to smaller ETFs, achieving this amount of FUM de-risks the ETF.
Fees and costs for investors
Vanguard charges investors a yearly management fee of 0.20% for the VBND ETF. This means that if you invested $2,000 in VBND for a full year, you could expect to pay management fees of around $4.00.
For context, the average management fee (MER) of all ETFs covered by Best ETFs Australia on our complete list of ASX ETFs is 0.5% or around $10.00 per $2,000 invested. Keep in mind, small changes in fees can make a big difference after 10 or 20 years.
Summary
These are just some of the considerations or factors you would need to look at when weighing up the VBND ETF. Before doing anything, take a look at our Vanguard VBND report – it’s free. While you’re at it, don’t forget to search our complete list of ASX ETFs.
