Vanguard US Government Bond Index Investor GBP

GBP hedged exposure to US Treasury and US government-related securities

  • 10811.47p Price (Inc)
  • - Price (Acc)
  • 0.00% 0.00%

    Initial charge
  • 0.25% Annual management charge
  • 0.25% Ongoing charges
  • 0.00% Yield

Fund data last updated 22 November 2019

This fund is a hedged version of the Vanguard US Government Bond Index fund and seeks to provide hedged GBP returns consistent with the performance of the Barclays US Government Float Adjusted Bond Index, a market-weighted index of the United States government bond market with an intermediate-term average-weighted maturity. The fund's notional principal is hedged from USD to GBP on a regular basis, which means investors will have exposure to US treasuries whilst eliminating US dollar currency movements.

Fund summary

Sector Global Bonds
Structure OFFSHORE FUND
Launched December, 2017
Size £3,286m
Yield 0.00%
Charging basis
Dividends paid

Charges

Initial charge 0.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 0.25%
Ongoing charges figure 0.25%

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Investment process

The fund employs a passive management or indexing strategy designed to track the performance of Barclays US Government Float Adjusted Bond Index. This market-weighted index is designed to reflect the total universe of US dollar denominated US Treasury and US government-related securities with maturities greater than one year. The fund uses a sampling technique and holds circa 300 index constituents, whilst the underlying index holds around 600 bonds. The currency exposure is being hedged on a monthly basis which leaves greater scope for fluctuations between the USD and the GBP hedged products on a shorter-term basis; the short-term effects will typically even out over the longer term. The group does not engage in securities lending for the purposes of managing this product.

This is a low-cost passive option for those looking for exposure to US government debt across the duration curve. As the name implies, this fund tracks an index of US government bonds with an average maturity of around 5.6 years. The average quality of the underlying issues is AAA rated and reflects the performance and characteristics of the US treasuries market.

Manager research

Average monthly relative returns

  • 14/15 -0.04%
  • 15/16 -0.10%
  • 16/17 -0.03%
  • 17/18 -0.08%
  • 18/19 -0.12%

Bestinvest MRI

  • 3 years -0.08%
  • 5 years -0.07%
  • Career -0.07%
  • 3 years 0.80%
  • 5 years 1.40%
  • Career 0.80%

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 8.3 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been -0.07%. During the worst period of relative performance (from July 2011 - August 2019) there was a decline of 8% relative to the index. The worst absolute loss has been 15%.

Periods of worst performance

Absolute -15.00% (June 2011 - September 2011)
Relative -8.00% (July 2011 - August 2019)

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.

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Portfolio

Sampling physical replication approach. c. 300 securities out of 600 in the benchmark are held.

Constraints

No securities lending.

Key Investor Information

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