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Vanguard’s active fixed income approach
Whether a plan sponsor, a pension fund, a nonprofit, or a consultant, all are seeking that holy grail—consistent outperformance without undue risk. Over the long term, it's not implausible with the right combination of factors, especially in fixed income.
Some firms may tout their size, talent, process, or results, but none can match the unique blend of all that Vanguard brings. We’re one of the most trusted companies in asset management for a reason.
We're also one of the largest, giving us the scale, clout, and ability to deliver cost efficiencies and attract top talent. We’ve been actively managing bond funds for nearly four decades, enhancing our research, talent pool, and risk management strategy, further refining our time-tested, repeatable investment process.
Philosophy
The following pillars of our investment management approach are all geared toward delivering compounding alpha—more consistent outperformance with less downside risk.
Talent, culture, process
Deep expertise, a collaborative culture, and a repeatable investment process are the foundation of our success.
Diversified sources of alpha
We construct portfolios from a diverse set of high information ratio strategies rather than relying on concentrated risk positions.
True-to-label products
You can be confident that our funds and trusts are designed to behave the way you would expect for their mandates and asset classes. There are no surprises that could sabotage your asset allocation strategy when you need it most.
Smart risk-taking
Risk optimization is integral in every step of the process. Lower fees also enable competitive net alpha without undue risk.
Client-aligned business
Our scale and unique investor-owned structure1 allow us to deliver superior value through lower fees2 that help clients keep more of their returns.
1 Vanguard is investor owned. This means investors own the funds that own Vanguard.
2 Vanguard's asset-weighted average expense ratio of 0.09% is less than one-fifth the industry average of 0.49%. Sources: Vanguard and Morningstar, Inc., as of December 31, 2021.
People and process
Our investment process is characterized by deep specialization and constant collaboration.
Vanguard’s dedicated active taxable fixed income team of 90+ professionals—senior leaders, portfolio managers, researchers, traders, and risk specialists—work together to support all relevant products. Unlike at other firms that may have an "A team" or a "B team," all Vanguard bond funds and trusts benefit from our top talent.
Credit and rates
Leaders of the credit and rates teams develop a macroeconomic framework of top-down insights combined with bottom-up views from the sector teams, exploring relative values across sectors and setting the overall credit and rates strategy.
Portfolio management
Fund-specific portfolio management teams collaborate to tailor these strategies to their respective portfolios given each specific mandate’s opportunity set and objectives.
Sector teams
We provide bottom-up selection of subsectors, issuers, and securities through rigorous fundamental research.
Oversight
The Senior Investment Committee and Risk Management Group maintain oversight and governance through every stage of the process.
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All investing is subject to risk, including possible loss of principal. Diversification does not ensure a profit or protect against a loss.