The actively managed ETF will be separate from but have a similar strategy to that of the $16.0 billion Vanguard Ultra-Short-Term Bond Fund (Investor Shares: VUBFX; Admiral™ Shares: VUSFX) and will be managed by the same portfolio management team as the mutual fund. It will have an estimated expense ratio of 0.10%, compared with the average expense ratio for ultra-short-term bond ETFs of 0.22%.
Like the existing Ultra-Short-Term Bond Fund, the Ultra-Short Bond ETF will invest in a diversified portfolio of high-quality and, to a lesser extent, medium-quality fixed income securities, including investment-grade credit and government debt. The ETF will use the same benchmark as the mutual fund, the Bloomberg Barclays U.S. Treasury Bellwethers: 1 Year Index. It will target the same average duration—approximately 1 year.