Vanguard UK Government Bond Index

Seeks to track the performance of the Barclays UK Government Float Adjusted Bond Index.

  • 15474.35p
    Price (Inc)

    These are the shares in the fund that pay out an income to clients. The income is made up of the total dividends – the money a company can pay out to its investors – from the companies in the fund.

  • 19519.21p
    Price (Acc)

    These are the shares in the fund that don’t pay out an income to clients. Any dividends – the money a company can pay out to its investors – are reinvested into companies in the fund. Despite no income, the shares should be worth more over time. Good incentive, eh?

  • 0.00%

    Initial charge

    Some funds charge you when you first invest, which is aptly known as the initial charge. They’re usually between 3-5% but at Bestinvest, we usually don’t charge you a penny!

  • 0.15%
    Annual management charge

    This is how much the fund management company charges to run the fund. It’s like paying a babysitter, dog sitter or house sitter (that makes well-informed, heavily researched changes to improve your baby/dog/house when needed).

  • 0.15%
    Ongoing charges

    This stands for Ongoing Charges Figure. It’s the cost of running a fund and includes admin fees, manager fees, administration costs, etc.

  • 1.50%
    Yield

    How much the fund is currently paying out in income to investors. It’s NOT to be confused with the overall growth of a fund – a very different thing indeed. It’s also NOT a guarantee of future pay-outs, just a snapshot. This is more what it’s not than what it is…

Prices as at 22 May 2020

This fund aims to track the performance of the Barclays UK Government Float Adjusted Bond Index. This market-weighted index is designed to reflect the total universe of pound sterling-denominated United Kingdom treasury and government-related securities with maturities greater than one year. The fund uses a physical replication method i.e. buys the bonds in the index, with key rate duration matching.

Fund summary

Sector UK Gilt
Structure OFFSHORE FUND
Launched June, 2009
Size £3,409m
Yield 1.50%
Charging basis Income
Dividends paid 14 Apr, 14 Jul, 14 Oct, 14 Jan

Charges

Standard initial charge 0.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 0.15%
Ongoing charges figure 0.15%

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Investment process

Vanguard is one of the largest asset managers in the US and is a leading provider of passive strategies globally. It is structured as a 'mutual' (client-owned) which allows the group to return profits to fund shareholders in the form of lower expenses. The fund seeks to provide returns consistent with the performance of the Barclays UK Government Float Adjusted Bond Index, a market-weighted index of UK government fixed-income securities denominated in pound sterling. The fund employs a "passive management" or indexing strategy designed to track the performance of the Index, which is a subset of the Barclays Capital Global Aggregate Float Adjusted Bond Index. This market-weighted Index is designed to reflect the total universe of pound sterling-denominated United Kingdom treasury and government-related securities with maturities greater than one year. The fund does not engage in any securities lending.

This is a low-cost passive option for those looking for exposure to UK government debt across the duration curve. As the name implies, this fund tracks an index of UK government bonds with an average maturity of 10.8 years. The average quality of the underlying issues is AA+ rated and reflects the performance and characteristics of the Gilt market.

Manager research

Average monthly relative returns

  • 15/16 -0.09%
  • 16/17 -0.06%
  • 17/18 0.00%
  • 18/19 -0.15%
  • 19/20 -0.15%

Bestinvest MRI

  • 3 years -0.10%
  • 5 years -0.09%
  • Career -0.08%
  • 3 years 0.10%
  • 5 years 0.30%
  • Career 0.30%

Performance figures are based on the average of monthly percentage returns relative to the benchmark index.

Vanguard Group

The Group launched an initial line up of index funds in the UK in June 2009 and has a range of other more diverse investment products. Chief Investment Officer (CIO) Tim Buckley oversees all investment activity at Vanguard. Vanguard Equity Investment Group oversees all passive and active equity portfolios, and alternatives strategies, managed by Vanguard. The group’s headquarters is at Vanguard’s campus in Malvern, Pennsylvania, United States.

Track record

Vanguard Group has 8.9 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been -0.08%. During the worst period of relative performance (from July 2011 - April 2020) there was a decline of 9% relative to the index. The worst absolute loss has been 16%.

Periods of worst performance

Absolute -16.00% (December 2019 - March 2020)
Relative -9.00% (July 2011 - April 2020)

About the MRI

Our unique indicator: the Bestinvest Manager Record Index (MRI) measures the likelihood that the fund manager is adding value through their decisions. It is based on their performance record over the course of their career, adjusted for the amount of risk taken. MRI is an important contributor to our fund rating system but it is also vital to take account of qualitative factors. It is also very important to select funds to form a cohesive portfolio with an appropriate overall risk level.

Allocation

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Portfolio

Treasury 97.8% Government-related - agencies 2.0 Cash 0.2 Total 100.0%

Constraints

The fund uses optimisation strategy by holding a subset of the securities comprising the benchmark index

Key Investor Information - Income

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Key Investor Information - Accumulation

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