New Vanguard Ultra-Short T-Bill ETFs
A press release titled, "Vanguard Introduces New ETFs to Meet Investors' Short-Term Liquidity Needs" tells us, "Vanguard launched Vanguard Ultra-Short Treasury ETF (VGUS) and Vanguard 0-3 Month Treasury Bill ETF (VBIL), two fixed income index ETFs. The pair of ETFs will be managed by Vanguard Fixed Income Group veteran, Josh Barrickman, Co-Head of Fixed Income Group Indexing in the Americas." Sara Devereux, Global Head of Vanguard Fixed Income Group, comments, "These new ultra-short Treasury products serve as valuable tools for advisors and investors to build more precise and flexible portfolios, bridging the gap between money market funds and existing ultra-short-term bond offerings in the ETF wrapper. VGUS and VBIL reflect our drive to provide investors with a more diverse product range and complement our existing line-up of active and passive funds with Vanguard's signature low-costs and management expertise." The release continues, "Serving as part of investors' liquidity toolkit, the pair of new ETFs will offer exposure to U.S. Treasury securities, have short durations and low volatility, and are expected to have tight bid-ask spreads. VGUS will track the Bloomberg Short Treasury Index, which includes U.S. Treasury Bills, Notes, and Bonds with less than 12 months until maturity. VBIL will track the Bloomberg US Treasury Bills 0-3 Months Index. Both ETFs will have an estimated expense ratio of 0.07%, positioning each ETF as a low-cost leader in its respective category. Vanguard Fixed Income Group, a world leader in fixed income with over $2.5 trillion in global assets under management, will advise the new ETFs. Vanguard Fixed Income Group has been managing index funds since 1986, when it launched Vanguard Total Bond Market Index Fund, the world's first bond index fund." The Independent Vanguard Adviser newsletter says about the news, "Neither of these ETFs is exactly innovative. For example, 0-3 Month Treasury Bill ETF enters a crowded space. You can already buy SPDR Bloomberg 1-3 Month T-Bill ETF (BIL) or iShares 0-3 Month Treasury Bond ETF (SGOV) -- both are around $30 billion funds, which gives you an idea of Vanguard's 'other' motivations here. Also, there's the U.S. Treasury 3 Month Bill ETF (TBIL), which holds the current 3-month Treasury bill, and WisdomTree's Floating Rate Treasury ETF (USFR), which plays in the same sandbox."
