Vanguard TIPS its Hand About Latest Fund

Vanguard has filed a registration statement with the U.S. Securities and Exchange Commission to launch the Vanguard Short-Term Inflation-Protected Securities Index Fund in Q4.

The new fund will track the performance of the Barclays U.S. Treasury Inflation-Protected Securities (TIPS) 0-5 Year Index, a market-weighted index that measures the performance of inflation-protected public obligations of the U.S. Treasury that have a remaining maturity of less than five years. Its ETF Shares will have an estimated expense ratio of 10 basis points. Its Investor Shares sport a 20 bps expense ratio, 10 bps for the Admiral Shares, and 7 bps for the Institutional Shares. To offset the transaction costs of purchasing TIPS, the fund will assess a 25 bps purchase fee on all shares (excluding ETF shares).

Joshua Barrickman and Gemma Wright-Casparius, both principals and senior portfolio managers in the Vanguard Fixed Income Group, will co-manage the new fund.

The short-term fund will complement the existing $43 billion Vanguard Inflation-Protected Securities Fund, an actively managed fund with a duration of 8.5 years and an average maturity of 9.3 years (as of June 30), according to the firm.