MEDIA CENTRE

Vanguard introduces a new Australian fixed interest ETF

Vanguard | 24 October 2012


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Vanguard will further diversify the choice available within its low-cost ETF range with the launch of the Vanguard® Australian Fixed Interest Index ETF. It is expected that the new ETF will begin trading under the ticker code VAF later this month once regulatory approvals are complete.

Vanguard will further diversify the choice available within its low-cost ETF range with the launch of the Vanguard® Australian Fixed Interest Index ETF. It is expected that the new ETF will begin trading under the ticker code VAF later this month once regulatory approvals are complete.

The ETF offers investors access through the ASX to one of Vanguard’s flagship index funds via the new ETF share class which tracks the UBS Composite Bond Index.

The ETF offers access to a diverse range of high credit quality Australian fixed income securities at a cost of just 0.20 per cent for a broadly diversified portfolio which includes allocations to government, semi-government and corporate bonds.

Fund Name

ASX Code

Fund Objective

Underlying fund size

Fee p.a.

Vanguard® Australian Fixed Interest Index ETF

VAF

Seeks to match the return (income and capital appreciation) of the UBS Composite Bond Index before taking into account fund fees, expenses and tax.

A$3.8 billion

0.20 %

Speaking about the new ETF, Vanguard’s Head of Fixed Income, Stephen Howard said: "Fixed income is an important diversifying component of investors’ portfolios—as recent years have shown—serving as a cushion to the volatility associated with equities”.

“While term deposits can serve well as short term savings vehicles, investing in high quality fixed income assets is all about lowering and managing risk, and ETFs provide investors with an easy, low cost way to access this asset class”.

“Vanguard ETFs are established as a share class of Vanguard’s wholesale fund range of index portfolios. This offers the benefit of competitive pricing and other portfolio advantages that economies of scale permit”, said Mr Howard.

Fixed income ETFs were permitted for trading on the ASX in early 2012 and already represent seven per cent of overall ETF investment. Earlier this year Vanguard added the Vanguard® Australian Government Bond Index ETF to its ETF range

Vanguard also recently launched a new ETF Trade and Execution Help Desk which can be accessed by calling 1300 655 888 to provide assistance to advisers trading ETFs for their clients.

 

About Vanguard
Vanguard Investments Australia Ltd is a wholly owned subsidiary of The Vanguard Group, Inc. which is based in the US and currently manages over AUD $2 trillion as at 30 June 2012 for both individual and institutional accounts.

This new fund will bring Vanguard’s range of ETFs for Australian investors to nine, with over $508 million in funds under management as at 30 September 2012.

Investors in Vanguard ETFs own a share of a portfolio of bonds or listed securities, indexed by Vanguard, which can be readily traded on the Australian Securities Exchange (ASX). Vanguard ETFs combine the low cost* and diversification benefits of index funds with the trading flexibility of shares.

* In addition to the low management costs, investors may also incur brokerage and a bid ask spread when buying and selling ETFs on the ASX.

Vanguard Investments Australia Ltd (ABN 72 072 881 086 / AFSL 227263) (Vanguard) is the issuer of the Vanguard® Australian ETFs. Vanguard ETFs will only be issued to Authorised Participants, that is, persons who have entered into an Authorised Participant Agreement with Vanguard. Retail investors can transact in Vanguard ETFs through a stockbroker or financial adviser on the secondary market. The Vanguard Australian Fixed Interest Index ETF is not currently available for trading and is subject to regulatory approval. A Product Disclosure Statement (PDS) will be made available for the Vanguard Australian Fixed Interest Index ETF when the ETF is available for trading. Investors should consider the PDS in deciding whether to acquire the Vanguard Australian Fixed Interest Index ETF. Retail investors can only use the Prospectus and PDS for informational purposes. We have not taken your circumstances into account when preparing this publication so it may not be applicable to your circumstances. You should consider your circumstances and the relevant PDS and/or Prospectus before making any investment decision. You can access the relevant PDSs and/or Prospectus at vanguard.com.au. This publication was prepared in good faith and we accept no liability for any errors or omissions. Past performance is not an indication of future performance.

The mark and name UBS Composite Bond IndexTM is proprietary to UBS AG (“UBS”). Any use of this index or its name must be with the express written consent of UBS AG acting through its Australia Branch. UBS has agreed to the use of, and reference to the UBS Composite Bond IndexTM (the “Index”) by us in connection with the Vanguard Australian Fixed Interest Index ETF (the “ETF”) and this Media Release, and the ETF is not in any way sponsored, endorsed or promoted by UBS. UBS assumes no responsibility for this Media Release or the ETF. Vanguard assumes sole responsibility for producing this marketing material, which has not been reviewed by UBS AG.

© 2012 Vanguard Investments Australia Ltd. All rights reserved.