Active fixed income

Make our competitive advantage your advantage

When you select Vanguard active fixed income funds, you can benefit from our competitive advantage: a time-tested trifecta of team, process, and low cost delivered by a firm with a mission to give our investors the best chance for investment success.

We've been managing active fixed income for more than 40 years. With $2.5 trillion¹ in fixed income assets under management, we're one of the world's largest managers in this space. Vanguard's mutual, investor-owned structure* allows us to pass along economies of scale, which helps us offer some of the most competitive fees around. In fact, 100% of Vanguard active fixed income funds are now in the lowest-cost decile of their Morningstar category.** Our low cost means that we can afford to be more judicious in taking on risk, and it gives us an asymmetric advantage when seeking to deliver net outperformance. That cost advantage, along with our experienced teams, has helped more than 90% of Vanguard active fixed income funds outperform their Lipper peer-group averages over the past 10 years.***

90 %

of Vanguard active fixed income funds outperformed their Lipper peer-group averages over the past 10 years.

100 %

of Vanguard active fixed income funds are now in the lowest-cost decile of their Morningstar category.

Discover what makes our approach unique

Vanguard's head of fixed income on why we're one of the world's largest active fixed income fund managers.

Sara Devereux
Global Head of Fixed Income Group In industry since 2002

Process

Our active taxable strategy is a team-based process led by portfolio managers and built on specialization, collaboration, and accountability. The process has three primary decision points, noted in the graphic below: develop a broad strategy, tailor it to portfolio type, and then construct the individual portfolio.

Broad strategy development begins with our Senior Investment Committee, composed of the senior leaders of the active teams across the Fixed Income Group and key partners in the Investment Strategy Group. This step combines the top-down, longer-term macroeconomic outlooks with bottom-up sector expectations from our rates and credit strategy teams to form the taxable strategy. It also fosters an environment in which investment strategies are shared and debated before being put to work.

Next, portfolio managers, analysts, and traders tailor the broad strategy to each portfolio type. They review valuations, fundamentals, and technicals to find investment opportunities that they believe will deliver value without taking on undue risk.

Finally, lead portfolio managers collaborate with senior research analysts and risk managers to apply the portfolio strategy to the portfolio construction plan for each individual fund. Portfolio managers, traders, and analysts within each sector execute the plan.

People and performance¹

While Vanguard is rightfully known as an indexing pioneer, our roots are in active management. For more than 40 years, Vanguard Fixed Income Group has distinguished itself with extensive investment capabilities, disciplined security selection processes, and rigorous risk management techniques, resulting in consistent, long-term outperformance.

Our credentialed and experienced team includes more than 110 CFA charterholders and nearly 90 graduate degree holders. Our portfolio managers and analysts have, on average, 21 and 19 years of experience, respectively. Our teams have deep sector expertise and significant experience across credit research, trading, and portfolio-management functions.

$ 269B AUM

Active fixed income

$ 193B AUM

Active municipal fixed income

$ 602B AUM

Money market

25 +

Portfolio managers

35 +

Traders

70 +

Credit research analysts

130 +

Active team members

90 %

Active fixed income outperformed peer averages over 10 years ²

¹As of December 31, 2024.

²For the 10-year period ended December 31, 2024, 40 of 44 Vanguard active bond funds outperformed their peer-group averages; results will vary for other time periods. Only funds with a 10-year history, respectively, were included in the comparison (source: LSEG Lipper). Note that the competitive performance data shown represent past performance, which is not a guarantee of future results, and that all investments are subject to risks. For the most recent performance, visit our website at vanguard.com/performance.