New Vanguard Emerging Market Bond Fund

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Eagle784
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New Vanguard Emerging Market Bond Fund

Postby Eagle784 » Tue Dec 22, 2015 12:16 pm

Announced yesterday, it will be actively managed and unhedged, with a 0.60% expense ratio for Investor shares and 0.45% expenses for the Admiral shares ($50,000 min.) and no purchase fees listed in the preliminary prospectus so far. Press release from Vanguard:

https://personal.vanguard.com/us/insigh ... Channel=AN

It mostly talks about a new actively managed Core Bond Fund in there, but to me at least, the Emerging Market Bond fund is more interesting. I hope this may portend of an unhedged Total International Bond Fund.

amphora
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Re: New Vanguard Emerging Market Bond Fund

Postby amphora » Tue Dec 22, 2015 12:28 pm

From the press release:

Securities of companies based in emerging markets are subject to national and regional political and economic risks and to the risk of currency fluctuations. These risks are especially high in emerging markets.

Dieharder
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Re: New Vanguard Emerging Market Bond Fund

Postby Dieharder » Tue Dec 22, 2015 12:36 pm

Now why would a US investor buy an unhedged EM bond fund? I cannot think of one reason to take on currency risk of some of the most unstable regions in the world. You don't get paid enough to do that. I can barely think of reasons to buy fully hedged EM bond funds, but could make a case for it in a world where nothing else may look appealing. I think there is a case for fully hedged Developed market bond funds, to stay away from US bond market until the interest rates have stabilized. But I wouldn't take on currency risk of any other country.

amphora
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Re: New Vanguard Emerging Market Bond Fund

Postby amphora » Tue Dec 22, 2015 12:58 pm

Foreign bonds are certainly not necessary. The only foreign bonds I would be willing to buy would be those paid in U.S. dollars (like Israel bonds) so there's credit risk, but no currency risk.

Johno
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Re: New Vanguard Emerging Market Bond Fund

Postby Johno » Tue Dec 22, 2015 1:05 pm

Dieharder wrote:Now why would a US investor buy an unhedged EM bond fund? I cannot think of one reason to take on currency risk of some of the most unstable regions in the world. You don't get paid enough to do that. I can barely think of reasons to buy fully hedged EM bond funds, but could make a case for it in a world where nothing else may look appealing. I think there is a case for fully hedged Developed market bond funds, to stay away from US bond market until the interest rates have stabilized. But I wouldn't take on currency risk of any other country.

Awhile back we had a discussion about Research Affiliates' site's expected returns presentation (graph in link). They give EM local currency debt among the highest E[r] and relatively favorable return v std dev of return because, as can be seen in the backing research papers, they believe currency Purchasing Power Parity values tend to converge. USD is expensive on PPP basis compared to EM currencies in general.

So my view would be kind of the converse of yours. I don't see any reason bothering with local currency EM bonds if you hedge the currency. Whereas I could see a point to it, as part of your diversification of sources of return, to look for return from currency convergence. I wouldn't say my view is opposite to yours though because I'm not insisting anybody has to do that. I just see the exercise as pretty pointless if currency hedged.

Secondarily it seems a bit exaggerated to say 'most unstable regions in the world'. I didn't see portfolio specifics for this fund but the Vang USD denominated EM bond fund is around 2/3's investment grade, 5.17% SEC yield in nominal ~10 yr maturity (intermediate corp is 3.63% ~7.5 yrs, but Vang's relatively high quality junk fund is now 6.28% in ~6yrs). The line up of countries is somewhat but not dramatically different than EM stock funds. As long as it's clear this is a risk asset, not a replacement for 'non risky' assets, I don't see the absolute risk as being out of line with say, stocks. But as to risk/return that's again a matter of opinion, RA projects much superior for EM bonds v US stocks from here, but up till now it's the opposite.

Since mentioning USD EM bond funds I'd also note that they don't wholly eliminate the currency effect: the market will generally perceive their credit quality to improve/decline as their currencies strengthen/weaken v USD.

http://www.researchaffiliates.com/asset ... rview.aspx

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Re: New Vanguard Emerging Market Bond Fund

Postby azanon » Tue Dec 22, 2015 1:39 pm

If you'd rather not wait on its availability, you can get ~ .45% (0.47%) without having to meet the minimum 50K with the ETF EMLC. It's an unhedged EM bond fund.

Dieharder
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Re: New Vanguard Emerging Market Bond Fund

Postby Dieharder » Tue Dec 22, 2015 1:43 pm

Johno wrote:
Dieharder wrote:Now why would a US investor buy an unhedged EM bond fund? I cannot think of one reason to take on currency risk of some of the most unstable regions in the world. You don't get paid enough to do that. I can barely think of reasons to buy fully hedged EM bond funds, but could make a case for it in a world where nothing else may look appealing. I think there is a case for fully hedged Developed market bond funds, to stay away from US bond market until the interest rates have stabilized. But I wouldn't take on currency risk of any other country.

Awhile back we had a discussion about Research Affiliates' site's expected returns presentation (graph in link). They give EM local currency debt among the highest E[r] and relatively favorable return v std dev of return because, as can be seen in the backing research papers, they believe currency Purchasing Power Parity values tend to converge. USD is expensive on PPP basis compared to EM currencies in general.

So my view would be kind of the converse of yours. I don't see any reason bothering with local currency EM bonds if you hedge the currency. Whereas I could see a point to it, as part of your diversification of sources of return, to look for return from currency convergence. I wouldn't say my view is opposite to yours though because I'm not insisting anybody has to do that. I just see the exercise as pretty pointless if currency hedged.

Secondarily it seems a bit exaggerated to say 'most unstable regions in the world'. I didn't see portfolio specifics for this fund but the Vang USD denominated EM bond fund is around 2/3's investment grade, 5.17% SEC yield in nominal ~10 yr maturity (intermediate corp is 3.63% ~7.5 yrs, but Vang's relatively high quality junk fund is now 6.28% in ~6yrs). The line up of countries is somewhat but not dramatically different than EM stock funds. As long as it's clear this is a risk asset, not a replacement for 'non risky' assets, I don't see the absolute risk as being out of line with say, stocks. But as to risk/return that's again a matter of opinion, RA projects much superior for EM bonds v US stocks from here, but up till now it's the opposite.

Since mentioning USD EM bond funds I'd also note that they don't wholly eliminate the currency effect: the market will generally perceive their credit quality to improve/decline as their currencies strengthen/weaken v USD.

http://www.researchaffiliates.com/asset ... rview.aspx


Expected return higher with risk similar to equities. No free lunch. If someone wants to reduce their exposure to US Large caps or EM equity and replace that with EM local debt then I have no issues with that. But taking on EM local debt risk in place of safer developed market debt denominated in U.S dollars doesn't look appealing.

Mostly when someone is asking about investing in EM bonds - hedged or unhedged, I assume they are taking the money away from safer bonds and placing that money here.

Fixed Income to me is for safety, I am willing to accept close to zero real returns if that is what the highest quality debt is returning. I take on risk on the equity side.

Now you can make a case for reducing exposure to equity and taking on EM local debt risk, I would have no problem with it. Personally, I wouldn't do it at this point in my life though.

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Re: New Vanguard Emerging Market Bond Fund

Postby Johno » Tue Dec 22, 2015 2:45 pm

Dieharder wrote:
Johno wrote:
Dieharder wrote:Now why would a US investor buy an unhedged EM bond fund?

Awhile back we had a discussion about Research Affiliates' site's expected returns presentation (graph in link). They give EM local currency debt among the highest E[r] and relatively favorable return v std dev of return because, as can be seen in the backing research papers, they believe currency Purchasing Power Parity values tend to converge. USD is expensive on PPP basis compared to EM currencies in general.

So my view would be kind of the converse of yours. I don't see any reason bothering with local currency EM bonds if you hedge the currency. Whereas I could see a point to it, as part of your diversification of sources of return, to look for return from currency convergence. I wouldn't say my view is opposite to yours though because I'm not insisting anybody has to do that. I just see the exercise as pretty pointless if currency hedged.

http://www.researchaffiliates.com/asset ... rview.aspx


1. Expected return higher with risk similar to equities. No free lunch. If someone wants to reduce their exposure to US Large caps or EM equity and replace that with EM local debt then I have no issues with that. But taking on EM local debt risk in place of safer developed market debt denominated in U.S dollars doesn't look appealing.

2. Mostly when someone is asking about investing in EM bonds - hedged or unhedged, I assume they are taking the money away from safer bonds and placing that money here.

1. They say it has much better expected risk/return than *US* stocks, though there is no gtee of course that RA is right and even though they aren't the only ones to have this general view the caveat still applies. But there is some genuine element of diversification in a risk like EM local currency govt bonds v stocks (US, DM or EM) that it would arguably still make it more attractive to diversify even it was at the same point on the rtn/std dev plot (which it basically is, again according to RA, v DM aka EAFE stocks). Not diversification all the time, not much lately when worries about EM's weak currencies are among the things dragging down stocks, but in general over time I believe so.

2. For people naive enough to even start out on that basis it's probably 'fail safe' to tell them to forget about risky bonds in general. However when it reaches the point of a supposed axiom that stocks always dominate risky bonds as an actual fact, my view tends to diverge.

I have considered a small allocation to EM local bonds but there's a poor trend lately (for example in the most likely one up to now, the ETF ELD) and IMO that matters. RA's projection is 10 yrs but off to a bad start. At .45% ER Admiral this fund is slightly cheaper than ELD (.55%).

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Re: New Vanguard Emerging Market Bond Fund

Postby azanon » Tue Dec 22, 2015 2:46 pm

I find the notion of risky vs. riskless assets to be an annoying oversimplification of the reality. There is an entire range of risk spectrum (measured in terms of volatility) with the safest ST US treasuries on one end, and EM Equities/speculatives on the other, and several other investment types, including alternatives, that fall somewhere in the middle.

The truth of the matter is, if one wanted to know their overall risk, its going to be a very complicated, estimated formula based on past results, and EM debt will end up being estimated to be relatively "risky" compared to all of the options, but the expected return is also pretty comparable. In other words, it's not "riskless", but if it's any consolation, neither is just about every other investment that's not ST US treasuries.

In short, I think only very beginning investors don't already realize, without saying, that EM debt isn't a direct substitute for, say, short-term or medium term treasuries, or even a total bond fund.

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cfs
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Re: New Vanguard Emerging Market Bond Fund

Postby cfs » Tue Dec 22, 2015 3:17 pm

Related

Here is a link to "the sister conversation" ====> Vanguard Core Bond Fund]
~ Your Ad Here! ~

Dieharder
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Re: New Vanguard Emerging Market Bond Fund

Postby Dieharder » Tue Dec 22, 2015 3:30 pm

Johno wrote:1. They say it has much better expected risk/return than *US* stocks, though there is no gtee of course that RA is right and even though they aren't the only ones to have this general view the caveat still applies. But there is some genuine element of diversification in a risk like EM local currency govt bonds v stocks (US, DM or EM) that it would arguably still make it more attractive to diversify even it was at the same point on the rtn/std dev plot (which it basically is, again according to RA, v DM aka EAFE stocks). Not diversification all the time, not much lately when worries about EM's weak currencies are among the things dragging down stocks, but in general over time I believe so.

If taking away from equities, then nothing really wrong. But are you going to take away significant chunk for it to make a real difference? for instance, say you have 30% invested in large cap US, will you take away 1/3rd of that to put in EM bonds, because if you are not then it isn't likely to make a big impact to overall portfolio returns. This is where I come to the equity vs. bonds argument. I am in the Swedroe camp that hybrids like EM bonds and High Yield are inefficient way to capture risk premiums. Credit risk is already built into equities in the sense that when you invest in a company it's credit quality is one of the parameters that drive it's equity returns. Similarly with hybrids like EM bonds and high yield you are essentially getting part equity risk.

Then there is the whole question of how many slices of asset classes you want to hold. When I started investing I used to own a lot of different asset classes, and gradually I have been consolidating, and now only have major components such as US large, small (value), Intl large, small, and EM (value), apart from fixed income which I like to keep short term right now with a small slice of hedged DM bonds.

If I have to buy EM bonds then I would need to take it from equity and at that point in order for it to a significant contributor I would need to cut down something else. I guess the problem is we all hear US large cap equity returns are likely to be lower, but are we ready to take on tracking error risk and slice down US large and replace it with EM bonds, based on forecasts. I don't think I can handle the tracking error risk, if it turns out to be the opposite, but I can handle TE risk in something like small value or intl small compared to the broad market. I guess it all comes down to one's level of conviction in an asset class, and how much you think it is a must have in your overall scheme.

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Re: New Vanguard Emerging Market Bond Fund

Postby azanon » Tue Dec 22, 2015 3:36 pm

Dieharder wrote:But are you going to take away significant chunk for it to make a real difference? for instance, say you have 30% invested in large cap US, will you take away 1/3rd of that to put in EM bonds, because if you are not then it isn't likely to make a big impact to overall portfolio returns.


The best argument is going to be for higher risk-adjusted returns, not just returns per se. The returns-only perspective is ultimately just incomplete, because of course one could get EM equity instead and have an even higher expected return than EM debt, if portfolio volatility didn't matter to the investor.

Now I'm not saying it's definitely worth it, but that's the real consideration; Is adding this asset class going to increase one's risk-adjusted return - or give a higher Sharpe ratio for the same or better level of return. If so, then it might be worth adding to a portfolio.

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Re: New Vanguard Emerging Market Bond Fund

Postby Dieharder » Tue Dec 22, 2015 3:45 pm

azanon wrote:
Dieharder wrote:But are you going to take away significant chunk for it to make a real difference? for instance, say you have 30% invested in large cap US, will you take away 1/3rd of that to put in EM bonds, because if you are not then it isn't likely to make a big impact to overall portfolio returns.


The best argument is going to be for higher risk-adjusted returns, not just returns per se. The returns-only perspective is ultimately just incomplete, because of course one could get EM equity instead and have an even higher expected return than EM debt, if portfolio volatility didn't matter to the investor.

Now I'm not saying it's definitely worth it, but that's the real consideration; Is adding this asset class going to increase one's risk-adjusted return - or give a higher Sharpe ratio for the same or better level of return. If so, then it might be worth adding to a portfolio.


Right. I have been there on those better risk adjusted returns optimization route, and now come down to the level of it doesn't really matter mode. Same argument can be made to include pretty much any asset class, say commodities or REIT. My portfolio isn't very scientific at all these days, I just follow commonsense asset allocation principles and have representation of all the major assets. Then it comes down to risk management, for me the 80% I have invested in equities is very risky, so I keep my 20% fixed income very safe. I do not have space for anything else and I no longer worry about optimizing risk adjusted returns. The starting point always is the market portfolio, then you tilt away to anything you really believe will make it better for your unique situation. My view is that in the end, it mostly doesn't matter a lot. My portfolio was down nearly 40% in 2008-09 period and then back up all the way in 2009-10. I have been through this without selling and I know what could happen. Really when it matters none of these assets that are supposed to provide better risk adjusted returns will protect you. Only the safest US government bonds did. In a flight to quality situation, investors will dump all those assets including EM bonds and high yields along with commodities, reit, whatever else, and run to the safety of US govt bonds.

One last point, what I am really getting to is that I believe in America, I believe that US large caps and US bonds will survive, and American system will prevail, so much that I have confidence in putting most of my assets in US equities and bonds, but at the same time, I also do not want to be blindsided by my home bias so as not to invest abroad, so I allocate a fair share to developed markets and EM.
Last edited by Dieharder on Tue Dec 22, 2015 3:55 pm, edited 1 time in total.

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Re: New Vanguard Emerging Market Bond Fund

Postby azanon » Tue Dec 22, 2015 3:51 pm

Dieharder wrote:Right. I have been there on those better risk adjusted returns optimization route, and now come down to the level of it doesn't really matter mode. Same argument can be made to include pretty much any asset class, say commodities or REIT. My portfolio isn't very scientific at all these days, I just follow commonsense asset allocation principles and have representation of all the major assets. Then it comes down to risk management, for me the 80% I have invested in equities is very risky, so I keep my 20% fixed income very safe. I do not have space for anything else and I no longer worry about optimizing risk adjusted returns. The starting point always is the market portfolio, then you tilt away to anything you really believe will make it better for your unique situation. My view is that in the end, it mostly doesn't matter a lot. My portfolio was down nearly 40% in 2008-09 period and then back up all the way in 2009-10. I have been through this without selling and I know what could happen. Really when it matters none of these assets that are supposed to provide better risk adjusted returns will protect you. Only the safest US government bonds did.


I invest with a very similar mindset, which is why my core holding is GAA - which is essentially a global market portfolio with slight tilts to what Cambria believes will give better risk-adjusted return (primarily Value and momentum tilts). EM bonds supposedly comprise about 6% of the GMP Source: http://mebfaber.com/2015/05/30/chapter- ... portfolio/ , and I believe GAA holds a similar weighting.

So, to be fair, not holding any is a tilt away from EM Bonds.

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Re: New Vanguard Emerging Market Bond Fund

Postby jdb » Tue Dec 22, 2015 4:57 pm

Good for Vanguard. Not sure if I would ever invest in an unhedged EM Bond fund but if I did would only be with a Vanguard fund. Sounds like it is many months away from being available to investors so will be interesting to watch developments.

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Re: New Vanguard Emerging Market Bond Fund

Postby jhfenton » Tue Jul 19, 2016 7:17 am

I was reading the Vanguard first half summary on M* this morning, and the article/video mentioned that Vanguard had quietly launched the Vanguard Emerging Markets Bond Fund. They said that it was in M*'s database (http://www.morningstar.com/funds/xnas/vembx/quote.html)--sort of--but that you wouldn't find it on Vanguard's website. (That appears to be true.) The entry in M* is also very incomplete. There are portfolio holdings listed (53 bonds and 1 other), but they have the fund in the Diversified Emerging Markets equity category and are missing most of the standard data. It appears to have launched March 10, 2016.

I have no plans to invest in it, but I wasn't aware of the fund's existence.

Edited to add: It also does not appear to available for investment through the web brokerage platform. The website doesn't recognize the ticker as a valid fund to buy.

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Re: New Vanguard Emerging Market Bond Fund

Postby AlohaJoe » Tue Jul 19, 2016 8:44 am

Seems like a crazy thing to claim.

https://personal.vanguard.com/us/funds/ ... IntExt=INT

It is on their website, easy to find, and I have bought it through their web platform as have $920 million worth of other people.


jhfenton pointed out I misunderstood the very slight difference in naming making my comment idiotic :)
Last edited by AlohaJoe on Tue Jul 19, 2016 9:42 am, edited 2 times in total.

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Re: New Vanguard Emerging Market Bond Fund

Postby jhfenton » Tue Jul 19, 2016 9:17 am

AlohaJoe wrote:Seems like a crazy thing to claim.

https://personal.vanguard.com/us/funds/ ... IntExt=INT

It is on their website, easy to find, and I have bought it through their web platform as have $920 million worth of other people.

That would be a silly thing to claim, but that is not the fund in question. They launched a new, actively-managed EM bond fund, but are essentially hiding it at the moment.

Edited to add: A link to the filing with the prospectus buried in it.

Investor shares (VEMBX) ER = 0.60%, $3,000 minimum
Admiral shares (VEGBX) ER = 0.45%, $50,000 minimum

The fund plans to hedge most of its currency exposure, but may have unhedged exposure as well. I'm not sure if the Admiral shares have launched yet, but neither appears to be open to public investment yet.

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Re: New Vanguard Emerging Market Bond Fund

Postby jhfenton » Tue Jul 19, 2016 12:53 pm

AlohaJoe wrote:Seems like a crazy thing to claim.

https://personal.vanguard.com/us/funds/ ... IntExt=INT

It is on their website, easy to find, and I have bought it through their web platform as have $920 million worth of other people.


jhfenton pointed out I misunderstood the very slight difference in naming making my comment idiotic :)

Hey, I was surprised too that Vanguard was launching a second EM bond fund. It has a different strategy--not being limited to dollar-denominated EM government bonds--but it's still a rather niche asset class for Vanguard to have two competing offerings.

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Re: New Vanguard Emerging Market Bond Fund

Postby ResearchMed » Tue Jul 19, 2016 12:58 pm

jhfenton wrote:I was reading the Vanguard first half summary on M* this morning, and the article/video mentioned that Vanguard had quietly launched the Vanguard Emerging Markets Bond Fund. They said that it was in M*'s database (http://www.morningstar.com/funds/xnas/vembx/quote.html)--sort of--but that you wouldn't find it on Vanguard's website. (That appears to be true.) The entry in M* is also very incomplete. There are portfolio holdings listed (53 bonds and 1 other), but they have the fund in the Diversified Emerging Markets equity category and are missing most of the standard data. It appears to have launched March 10, 2016.

I have no plans to invest in it, but I wasn't aware of the fund's existence.

Edited to add: It also does not appear to available for investment through the web brokerage platform. The website doesn't recognize the ticker as a valid fund to buy.


Unfortunately, Vanguard doesn't make it easy for investors (civilians, at least) to find ALL of the funds.

Here is a link to an "institutional" page, which is available to anyone:

https://institutional.vanguard.com/VGAp ... e&sbm=true

RM
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Re: New Vanguard Emerging Market Bond Fund

Postby jhfenton » Tue Jul 19, 2016 1:11 pm

ResearchMed wrote:
jhfenton wrote:I was reading the Vanguard first half summary on M* this morning, and the article/video mentioned that Vanguard had quietly launched the Vanguard Emerging Markets Bond Fund. They said that it was in M*'s database (http://www.morningstar.com/funds/xnas/vembx/quote.html)--sort of--but that you wouldn't find it on Vanguard's website. (That appears to be true.) The entry in M* is also very incomplete. There are portfolio holdings listed (53 bonds and 1 other), but they have the fund in the Diversified Emerging Markets equity category and are missing most of the standard data. It appears to have launched March 10, 2016.

I have no plans to invest in it, but I wasn't aware of the fund's existence.

Edited to add: It also does not appear to available for investment through the web brokerage platform. The website doesn't recognize the ticker as a valid fund to buy.


Unfortunately, Vanguard doesn't make it easy for investors (civilians, at least) to find ALL of the funds.

Here is a link to an "institutional" page, which is available to anyone:

https://institutional.vanguard.com/VGAp ... e&sbm=true

RM

I looked on the advisor and institutional sites earlier. I didn't see the new fund listed there either. I haven't called, because I'm not actually interested in investing in the fund. But it's either not open to the public yet, or they're trying very hard not to sell it yet.

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Re: New Vanguard Emerging Market Bond Fund

Postby ResearchMed » Tue Jul 19, 2016 1:19 pm

jhfenton wrote:
ResearchMed wrote:
jhfenton wrote:I was reading the Vanguard first half summary on M* this morning, and the article/video mentioned that Vanguard had quietly launched the Vanguard Emerging Markets Bond Fund. They said that it was in M*'s database (http://www.morningstar.com/funds/xnas/vembx/quote.html)--sort of--but that you wouldn't find it on Vanguard's website. (That appears to be true.) The entry in M* is also very incomplete. There are portfolio holdings listed (53 bonds and 1 other), but they have the fund in the Diversified Emerging Markets equity category and are missing most of the standard data. It appears to have launched March 10, 2016.

I have no plans to invest in it, but I wasn't aware of the fund's existence.

Edited to add: It also does not appear to available for investment through the web brokerage platform. The website doesn't recognize the ticker as a valid fund to buy.


Unfortunately, Vanguard doesn't make it easy for investors (civilians, at least) to find ALL of the funds.

Here is a link to an "institutional" page, which is available to anyone:

https://institutional.vanguard.com/VGAp ... e&sbm=true

RM

I looked on the advisor and institutional sites earlier. I didn't see the new fund listed there either. I haven't called, because I'm not actually interested in investing in the fund. But it's either not open to the public yet, or they're trying very hard not to sell it yet.


I just tried to purchase the investor shares in a 403b, and the system allowed me to get as far as I could without finalizing the purchase, which we don't want to do.
$3k minimum, when I looked at the minimum and fees for the fund I was "about" to purchase.
(I had to type in the symbol, VGOVX, not select from a list of funds, in case that helps?)

And it shows 3 yr returns.

Would the purchase have gone through?
No idea.

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Re: New Vanguard Emerging Market Bond Fund

Postby jhfenton » Tue Jul 19, 2016 1:28 pm

ResearchMed wrote:
jhfenton wrote:
ResearchMed wrote:
jhfenton wrote:I was reading the Vanguard first half summary on M* this morning, and the article/video mentioned that Vanguard had quietly launched the Vanguard Emerging Markets Bond Fund. They said that it was in M*'s database (http://www.morningstar.com/funds/xnas/vembx/quote.html)--sort of--but that you wouldn't find it on Vanguard's website. (That appears to be true.) The entry in M* is also very incomplete. There are portfolio holdings listed (53 bonds and 1 other), but they have the fund in the Diversified Emerging Markets equity category and are missing most of the standard data. It appears to have launched March 10, 2016.

I have no plans to invest in it, but I wasn't aware of the fund's existence.

Edited to add: It also does not appear to available for investment through the web brokerage platform. The website doesn't recognize the ticker as a valid fund to buy.


Unfortunately, Vanguard doesn't make it easy for investors (civilians, at least) to find ALL of the funds.

Here is a link to an "institutional" page, which is available to anyone:

https://institutional.vanguard.com/VGAp ... e&sbm=true

RM

I looked on the advisor and institutional sites earlier. I didn't see the new fund listed there either. I haven't called, because I'm not actually interested in investing in the fund. But it's either not open to the public yet, or they're trying very hard not to sell it yet.


I just tried to purchase the investor shares in a 403b, and the system allowed me to get as far as I could without finalizing the purchase, which we don't want to do.
$3k minimum, when I looked at the minimum and fees for the fund I was "about" to purchase.
(I had to type in the symbol, VGOVX, not select from a list of funds, in case that helps?)

And it shows 3 yr returns.

Would the purchase have gone through?
No idea.

RM

That is the Emerging Markets Government Bond Index Fund. That is the existing fund, not the new one. The Emerging Market Bond Fund Investor Share ticker is VEMBX. It is not a government fund and not an index fund.

ResearchMed
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Re: New Vanguard Emerging Market Bond Fund

Postby ResearchMed » Tue Jul 19, 2016 1:45 pm

jhfenton wrote:
ResearchMed wrote:
jhfenton wrote:
ResearchMed wrote:
jhfenton wrote:I was reading the Vanguard first half summary on M* this morning, and the article/video mentioned that Vanguard had quietly launched the Vanguard Emerging Markets Bond Fund. They said that it was in M*'s database (http://www.morningstar.com/funds/xnas/vembx/quote.html)--sort of--but that you wouldn't find it on Vanguard's website. (That appears to be true.) The entry in M* is also very incomplete. There are portfolio holdings listed (53 bonds and 1 other), but they have the fund in the Diversified Emerging Markets equity category and are missing most of the standard data. It appears to have launched March 10, 2016.

I have no plans to invest in it, but I wasn't aware of the fund's existence.

Edited to add: It also does not appear to available for investment through the web brokerage platform. The website doesn't recognize the ticker as a valid fund to buy.


Unfortunately, Vanguard doesn't make it easy for investors (civilians, at least) to find ALL of the funds.

Here is a link to an "institutional" page, which is available to anyone:

https://institutional.vanguard.com/VGAp ... e&sbm=true

RM

I looked on the advisor and institutional sites earlier. I didn't see the new fund listed there either. I haven't called, because I'm not actually interested in investing in the fund. But it's either not open to the public yet, or they're trying very hard not to sell it yet.


I just tried to purchase the investor shares in a 403b, and the system allowed me to get as far as I could without finalizing the purchase, which we don't want to do.
$3k minimum, when I looked at the minimum and fees for the fund I was "about" to purchase.
(I had to type in the symbol, VGOVX, not select from a list of funds, in case that helps?)

And it shows 3 yr returns.

Would the purchase have gone through?
No idea.

RM

That is the Emerging Markets Government Bond Index Fund. That is the existing fund, not the new one. The Emerging Market Bond Fund Investor Share ticker is VEMBX. It is not a government fund and not an index fund.


Ah... sorry!
Right... It's NOT on that list on the "institutional page".
I tried to purchase it, and although it ID'd the proper fund (complete with $3k min.), when I clicked with the amount ($3k), it wouldn't recognize the symbol - as you wrote.

Is it still in start-up phase, where they haven't fully invested yet?

(Not interested in the fund, but in the "process" and customer service, etc.)

Thanks.

RM
This signature is a placebo. You are in the control group.

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jhfenton
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Re: New Vanguard Emerging Market Bond Fund

Postby jhfenton » Tue Jul 19, 2016 2:14 pm

ResearchMed wrote:
Is it still in start-up phase, where they haven't fully invested yet?

(Not interested in the fund, but in the "process" and customer service, etc.)

Thanks.

RM

It's the same for me. I'm a bit curious about what the fund will look like, but I'm also curious about a fund that is in existence but in a super-secret mode. M*'s data seems to all be from March 31, 2016. And it seems to have had an inception date of March 10. It does not seem to have had a public subscription period like the Vanguard Core Bund fund did where it held investments in cash prior to the go-live date.

ANC
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Re: New Vanguard Emerging Market Bond Fund

Postby ANC » Tue Jul 19, 2016 2:25 pm

Dieharder wrote:Now why would a US investor buy an unhedged EM bond fund? I cannot think of one reason to take on currency risk of some of the most unstable regions in the world. You don't get paid enough to do that.

Non-fund investors such as institutions often don't want this either, so a lot of them are issued in dollars (or in euro, sterling, or yen). The question is what cap does it place on local currency.

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jhfenton
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Re: New Vanguard Emerging Market Bond Fund

Postby jhfenton » Tue Jul 19, 2016 2:58 pm

ANC wrote:
Dieharder wrote:Now why would a US investor buy an unhedged EM bond fund? I cannot think of one reason to take on currency risk of some of the most unstable regions in the world. You don't get paid enough to do that.

Non-fund investors such as institutions often don't want this either, so a lot of them are issued in dollars (or in euro, sterling, or yen). The question is what cap does it place on local currency.

It is going to be largely hedged, but I don't see a limit on the amount of unhedged. From the prospectus:
The Fund invests in fixed income securities of various maturities, yields, and qualities. Under normal circumstances, the Fund will invest at least 80% of assets in fixed income securities of issuers that are tied economically to emerging market countries. The Fund will seek to have a majority of its assets denominated in or hedged back to the U.S. dollar, but has the ability to invest in local currency denominated bonds on an unhedged basis. Emerging market bonds include sovereign debt securities, which include fixed income securities that are issued or guaranteed by foreign sovereign governments or their agencies, authorities, political subdivisions or instrumentalities or other supranational agencies, as well as debt securities issued or guaranteed by foreign corporations and foreign financial institutions. *** snip ***

The Fund may invest in emerging markets bonds of any maturity or quality. The Fund may invest in bonds that have lower range quality ratings, commonly known as “junk bonds”—including those in default—which are those rated the equivalent of Ba1 or lower by Moody’s Investor Service, Inc., or another independent rating agency, or if unrated, are determined to be of comparable quality by the Fund’s advisor.

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jhfenton
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Re: New Vanguard Emerging Market Bond Fund

Postby jhfenton » Mon Jan 09, 2017 9:26 am

On my drive to work this morning, I was listening to a year-end M* podcast, and they mentioned that Vanguard launched a new EM bond fund in 2016 and that reminded me of this fund (VEMBX). Looking at Vanguard's websites, it appears that they have still not really launched it. It doesn't appear anywhere (investor, advisor, or institutional). It doesn't show up on searches. And the brokerage platform won't accept the ticker for purchases.

I wouldn't actually invest in the fund, but I am interested in watching it, and in understanding Vanguard's strategy of launching a "stealth" fund that they don't actually make available for public purchase.

lack_ey
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Re: New Vanguard Emerging Market Bond Fund

Postby lack_ey » Mon Jan 09, 2017 10:18 am

jhfenton wrote:On my drive to work this morning, I was listening to a year-end M* podcast, and they mentioned that Vanguard launched a new EM bond fund in 2016 and that reminded me of this fund (VEMBX). Looking at Vanguard's websites, it appears that they have still not really launched it. It doesn't appear anywhere (investor, advisor, or institutional). It doesn't show up on searches. And the brokerage platform won't accept the ticker for purchases.

I wouldn't actually invest in the fund, but I am interested in watching it, and in understanding Vanguard's strategy of launching a "stealth" fund that they don't actually make available for public purchase.

A lot of fund launches go like this, including some of the last few by Vanguard. There's some kind of announcement but the product doesn't seem to show up until months after when it was supposed to. Some (maybe not Vanguard's) just never turn up.

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jhfenton
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Re: New Vanguard Emerging Market Bond Fund

Postby jhfenton » Mon Jan 09, 2017 10:58 am

lack_ey wrote:
jhfenton wrote:On my drive to work this morning, I was listening to a year-end M* podcast, and they mentioned that Vanguard launched a new EM bond fund in 2016 and that reminded me of this fund (VEMBX). Looking at Vanguard's websites, it appears that they have still not really launched it. It doesn't appear anywhere (investor, advisor, or institutional). It doesn't show up on searches. And the brokerage platform won't accept the ticker for purchases.

I wouldn't actually invest in the fund, but I am interested in watching it, and in understanding Vanguard's strategy of launching a "stealth" fund that they don't actually make available for public purchase.

A lot of fund launches go like this, including some of the last few by Vanguard. There's some kind of announcement but the product doesn't seem to show up until months after when it was supposed to. Some (maybe not Vanguard's) just never turn up.

I'm used to fund disclosures being filed and then the funds not showing up for months, if ever. That's typical. We saw that not long ago with the international dividend funds. Folks were talking about those for more than a year.

What I haven't noticed before is a new Vanguard fund actually existing for 10 months (as evidence by the M* data, the fund has $10MM in assets), but not available to any retail investors. It appears to have received $10MM in seed money and just be hanging out. It may have happened, but I wasn't aware of it, so I find this interesting.

lack_ey
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Re: New Vanguard Emerging Market Bond Fund

Postby lack_ey » Mon Jan 09, 2017 11:06 am

Oh, you're right, sorry. Didn't notice the 9 months of trading data reported. A smaller lag maybe not too unusual, but this is weird.

Here's an annual report filing:
https://www.sec.gov/Archives/edgar/data ... _final.htm


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