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-Vanguard plans new bond index fund, ETF.

BANKING AND CREDIT NEWS-February 7, 2013--Vanguard plans new bond index fund, ETF(C)2013 M2 COMMUNICATIONS

7 February 2013 -- Pennsylvania, USA-based investment management firm Vanguard said that it expects to launch Vanguard Total International Bond Index Fund and its ETF shares by the end of the second quarter.

Vanguard said it filed an amended registration statement for the fund with the US Securities and Exchange Commission that reflects a new target index, as well as lower estimated expense ratios for various share classes of the fund and the elimination of its planned purchase fee.

The company also announced that the fund will be added as a component to Vanguard's all-in-one funds, including its popular series of 12 Target Retirement Funds.

Vanguard said that the Total International Bond Index Fund will seek to track the performance of a new benchmark-- the Barclays Global Aggregate ex- Float Adjusted RIC Capped Index ( Hedged).

The index comprises approximately 7,000 high-quality corporate and government bonds (average credit quality AA2/AA3) from 52 countries, it said. The index caps its exposure to any single bond issuer, including a government, at 20% to meet regulated investment company tax diversification requirements.

The top country holdings as of December 31, 2012, were Japan, France, Germany, and the United Kingdom.

Vanguard is estimating lower expense figures in the amended filing for the Total International Bond Index Fund. The fund will offer conventional shares with projected expense ratios ranging from 0.12% to 0.23%.

The ETF shares have a projected expense ratio of 0.20%. Vanguard has also eliminated a planned 0.25% purchase fee on the fund.

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Publication:M2 Banking & Credit News (BCN)
Date:Feb 7, 2013
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