Vanguard has rolled out the Vanguard Emerging Markets Government Bond Index Fund, the company’s first international fixed income offering available to U.S. investors.
Following the subscription period, the fund will seek to track the Barclays USD Emerging Markets Government RIC Capped Index. The fund will invest solely in U.S. dollar-denominated emerging markets bonds. The benchmark includes approximately 560 government, agency, and local authority issuers.
The fund is now accepting investments during a subscription period that will extend through the end of business on May 30, 2013. During this period, the fund will invest in money market instruments as it accumulates sufficient assets to construct a representative, diversified portfolio. The fund’s ETF shares (VWOB) are scheduled to begin trading in early June.
The expense ratios for the ETF, Investor, Admiral, and Institutional Shares of Vanguard Emerging Markets Government Bond Index Fund will range from 30 to 50 basis points. The fund will assess a purchase fee of 75 basis points on all non-ETF shares to help offset the higher transaction costs associated with buying emerging markets bonds.
The fund’s ETF shares (VWOB) join the 65 low-cost Vanguard ETFs available commission free to Vanguard clients, the company said.
Vanguard is the industry leader in ETF net cash flow this year, with an estimated $23 billion through April 2013, according to Bloomberg data. The firm’s ETF assets have increased more than $100 billion over the past two years and now total nearly $286 billion.