Vanguard Active Bond Offerings thread

[steadyeddy]

Does this forum have experience with several Vanguard active bond offerings? Any input appreciated.

Have been around for a few years:

Vanguard Multisector VMSIX/VMSAX (0.4%/0.3% ER)
Vanguard Core VCORX/VCOBX (0.2%/0.1% ER)
Vanguard Core-Plus VCPIX/VCPAX (0.4%/0.3% ER)

Most recently 2 ETFs began trading 12/12/2023:

VCRB - Core Bond (Vanguard states that this is not an ETF version of the Core mutual fund although the strategy *appears* to be similar/same) 0.1% ER
VPLS - Core-Plus (Vanguard states this is not an ETF version of Core-Plus mutual fund although the strategy *appears* to be similar/same) 0.2% ER


Do you have a perspective? Are you invested in any of these? Are any of these on your watchlist?

Thanks
SteadyEddy

[yogibearbull]

I keep an eye on what Vanguard is doing.

It was LATE to active bond funds. It found that after the GFC 2008-09 (that was also time of management turmoil at Pimco), lot of money went into its bond index funds initially, but that money didn't stick and shifted to active bond funds of other firms. So, VG finally came out with active core OEF VCORX/VCOBX in 03/2016, active core-plus OEF VCPIX/VCPAX in 2021, active multisector OEF VMSIX/VMSAX also in 2021.

It just came out with active bond ETFs, core VCRB in 12/2023, core-plus VPLS also in 12/2023. Comparable ETFs from Pimco, Fido, DoubleLine have been around for years, so VG is VERY LATE on this.

As has been VG pattern, its ETFs have ERs similar/same as Admiral classes. That started out for its index funds, and has now carried over to active funds. And, VG tends to be the low-cost provider, although not with the lowest cost in many cases.

VG had an exclusive PATENT on ETF classes of mutual funds that VG applied only to its index funds, never to active funds. VG NEVER LICENCED that patent to anyone. That patent has now EXPIRED. Its new active ETFs are just self-standing cousins of similar active funds, as is the case with the ETFs of other firms. But other firms are now starting to offer ETF classes of mutual funds.

I don't own any of them.

[catdog]

Steady,

If you are only interested in vanguard funds then I can't say anything.  If you are willing to look outside vanguard I recommend FBND.  It is a total bond fund and currently holds about 12% junk.  I have owned it 7 weeks and it has returned about 8.5%.  It sure loves the falling 10year.  Active management and .36er.  It's been around since 2014.

catdog

[steadyeddy]

yogibearbull , catdog , thanks for responding. I am looking for ETF versions of active bond funds from portability standpoint. OEFs as you know are a bit more restrictive in terms of where you can easily buy and hold them.

I am a bit heavy into PIMIX/PONAX - and they each have brokerage limitations. Wondering if the VG versions of active bond ETFs might be suitable replacements for PIMCO funds.

[yogibearbull]

catdog mentioned FBND. It's a self-standing cousin of Fido FTBFX run by Ford O'Neil. Don't let the name "Total Bond" mislead - they are ACTIVE core-plus funds. Competition is Pimco BOND, DoubleLine TOTL, etc.

New Vanguard ETFs are certainly good for TLH and for those who like to access VG products from elsewhere.

[django]

I think it is probably safe to assume Vanguard active bond ETFs are more conservatively managed than those from PIMCO or Fidelity.

[steadyeddy]

Dec 20, 2023 11:51:39 GMT yogibearbull said:

catdog mentioned FBND. It's a self-standing cousin of Fido FTBFX run by Ford O'Neil. Don't let the name "Total Bond" mislead - they are ACTIVE core-plus funds. Competition is Pimco BOND, DoubleLine TOTL, etc.

New Vanguard ETFs are certainly good for TLH and for those who like to access VG products from elsewhere.

None of these, over their short lifespans,  are vastly different in terms of their performance relative to a bond index.. either BND or IUSB. Only minor variations in SD and performance is noted when I run PV.

I suspect the new VG entrants might fall in the same range of SD/performance. 

[steadyeddy]

Dec 20, 2023 11:58:35 GMT django said:

I think it is probably safe to assume Vanguard active bond ETFs are more conservatively managed than those from PIMCO or Fidelity.

I tend to agree. I am probably going to rotate out of PIMIX into these tamer puppies.

[Chahta]

I don’t buy from vanguard since I’m at Schwab. I use DODIX, PTIAX for core plus and TSIIX for MS.

[roi2020]

The Vanguard taxable bond team doesn't get the recognition they deserve.

Vanguard Core Bond Admiral (VCOBX) has an inception date of 03/28/2016.
VCOBX is managed by Messrs. Shaykevich, Narayanan, and Quigley.

The fund's 5-year trailing category returns are in the top decile.

Vanguard Emerging Markets Bond Admiral (VEGBX) has an inception date of 12/06/2017.

VEGBX is managed by Messrs. Shaykevich and Favini.

The 5-year trailing returns for VEGBX are in the top 2% of the EM bond category.

Vanguard Global Credit Bond Admiral (VGCAX) has an inception date of 11/15/2018.

VGCAX is managed by Messrs. Shaykevich and Narayanan.

The 5-year trailing returns for VGCAX are in the top 4% of the corporate bond category.
Note: VGCAX was categorized as "Global Bond - USD Hedged" by M* until a category change sometime in 2022.

I don't know how Vanguard's new active bond ETFs will differ from their mutual fund counterparts.
I don't currently own any Vanguard taxable bond funds because:
1) Vanguard Roth is dedicated to equity funds.

2) Prefer muni bond funds in my Vanguard taxable account (recently purchased VWIUX).

I have a large Dodge & Cox Income (DOXIX) position in my 401K and also own 5-year TIPS in another tax-deferred account.

[Chahta]

Just looked at VCORX. It did about as good this year as BAGIX, one of the best.

[steadyeddy]

I have made a decision to swap my PIMIX/PONAX holdings into VPLS.