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Today this bond ETF starts trading. I am looking forward to Vanguard providing details on the composition, yield, etc. The SEC filing was not helpful. Hoping that this ETF is actively managed.
Actively managed equity funds, unless otherwise stated, generally will seek to disclose complete portfolio holdings as of the end of the most recent calendar quarter online at vanguard.com, 30 calendar days after the end of the calendar quarter. Actively managed fixed income funds will seek to disclose complete portfolio holdings as of the end of the most recent month online at vanguard.com, 15 calendar days after the end of the month. Each Vanguard fund relying on Rule 6c-11 under the 1940 Act (e.g., standalone ETFs) generally will seek to disclose complete portfolio holdings, including other investment positions, at the beginning of each business day.
Thanks for sharing the info. YTD performance of their OEF matches PIMIX closely. Don’t know their strategies well enough whereas Pimco’s team is well recognized. Vanguard seldom if ever gives interviews from their team, so it is more like a black box.
@Mitchelg - Here’s the independentvanguard advisor Jeff Demaso: “While technically a distinct vehicle from the Multi-Sector Income mutual fund, the new ETF is effectively a clone. It’s run by the same trio—Michael Chang, Arvid Narayanan and Danial Shaykevich—and targets the same recently updated blended benchmark.
But Vanguard says this: “The Multi-Sector Income Bond Fund is a stand alone product and is separate and distinct from Multi-Sector Income Bond ETF (VGMS). Differences in scale, certain investment processes, and underlying holdings are expected to produce different investment returns by the funds.”
Jeff is wise since high yield bonds have positive asset correlation to stocks, while high quality investment grade bonds do not. Junk bonds are vulnerable to severe drawdown such as 2020 pandemic. Treasury, on the other hand, held we well.
I’m finding that active HY and Multi-sector funds that focus on total return and return of investment (vs return on investment - e.g. see David Sherman) are more stable than funds tracking a HY index:
Until I retired I would never look twice at a fund outside of Vanguard especially with an er over .30%. But then I found that a bond fund charging upwards of 1+%, and continues to exhibit a comparatively low SD, with an acceptable spread over a bond index, then I began to dabble in the previously mentioned HY and Multi-sector bond funds.
Still, the lion’s share of my fixed income investments are in individual treasuries. So you could say this is my barbell strategy.
Good multi-sector funds often have favorable risk/reward characteristics. Treasuries, however, provide greater diversification for stocks during periods of market turmoil.
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Online Disclosure of Complete Portfolio Holdings
Actively managed equity funds, unless otherwise stated, generally will seek to disclose complete portfolio holdings as of the end of the most recent calendar quarter online at vanguard.com, 30 calendar days after the end of the calendar quarter. Actively managed fixed income funds will seek to disclose complete portfolio holdings as of the end of the most recent month online at vanguard.com, 15 calendar days after the end of the month. Each Vanguard fund relying on Rule 6c-11 under the 1940 Act (e.g., standalone ETFs) generally will seek to disclose complete portfolio holdings, including other investment positions, at the beginning of each business day.
Here’s the independentvanguard advisor Jeff Demaso: “While technically a distinct vehicle from the Multi-Sector Income mutual fund, the new ETF is effectively a clone. It’s run by the same trio—Michael Chang, Arvid Narayanan and Danial Shaykevich—and targets the same recently updated blended benchmark.
The ETF charges a 0.30% expense ratio, identical to the Admiral share class (VMSAX) of the mutual fund and 0.15% cheaper than the Investor shares (VMSIX). That makes the ETF a more cost-effective choice for smaller investors who don’t meet the $50,000 minimum for the Admiral share class.”
https://www.independentvanguardadviser.com/weekly-brief-steady-numbers-cloudy-outlook-and-a-new-etf/?ref=the-independent-vanguard-adviser-newsletter
But Vanguard says this: “The Multi-Sector Income Bond Fund is a stand alone product and is separate and distinct from Multi-Sector Income Bond ETF (VGMS). Differences in scale, certain investment processes, and underlying holdings are expected to produce different investment returns by the funds.”
jeff currently avoiding anything new w/corp hy bonds.
RCTIX: max dd 2022 = -4.02
RSIIX: max dd 2022 = -3.03
CBLDX: 2022 = +1.01
OSTIX: 2022 mx dd 2022 = -5.94
ICMUX: 2022 mx dd = -3.16
HYG: max dd 2022 = -10.99
VOO: max dd 2022 = -18.19
Note: I’ve also included M* multi-sector category because they hold significant lower rated bonds.
Still, the lion’s share of my fixed income investments are in individual treasuries. So you could say this is my barbell strategy.
Treasuries, however, provide greater diversification for stocks during periods of market turmoil.