Market uncertainty needs a tailor-made approach to fixed income for advisors to construct the ideal portfolio for their clients. There’s an easier solution that encompasses an active management approach, various income sources, and low cost. It’s the Vanguard Multi-Sector Income Bond ETF (VGMS).
Fixed income investors have enough to worry about these days. With volatility originating from tariffs, geopolitical tensions, and higher-for-longer inflation, to name a few, getting the safety of Treasuries alone isn’t sufficient.
In the current environment, yield is also highly sought after. Corporate bonds, international bonds, or other fixed income assets can offer max yield opportunities. However, investors and advisors must be able to sift through myriad options to find the best opportunities. This takes an active approach that allows portfolio managers to not only identify these opportunities, but to deftly respond to changing market conditions. At the same time, inflation warrants a low-cost solution. Given all these factors, VGMS encapsulates this triumvirate of an active management strategy, multi-income, and cost efficiency.
Leveraging the expertise of the Vanguard Fixed Income Group, portfolio managers of VGMS can handpick holdings that will maximize income. Even in the face of market uncertainty, they’re able to extrapolate these opportunities, which speaks to the benefit of active management.
“Fixed-income specialists see this moment, despite the policy uncertainty and the volatility in public equities, as largely favorable for the asset class,” Pensions & Investments noted.
Diversified Income Opportunities
To maximize yield, VGMS focuses on investment-grade and below-investment-grade within the U.S. bond market. Additionally, yield maximizing takes looking outside of U.S. borders. As such, the Vanguard Fixed Income Group will also source income opportunities from other countries, whether it’s developed or emerging markets.
“The traditional safe harbor in the U.S. is not behaving as expected and is over-owned. Searching for duration and reasonably safe assets outside of the U.S. makes sense. Emerging markets are a large universe, and within it, there’s a huge amount of diversification,” said Anthony Kettle, managing director and senior portfolio manager, BlueBay Fixed Income at RBC Global Asset Management.
Best of all, VGMS accomplishes its investment focus with investors in mind. That said, the the fund’s 0.30% expense ratio is less than half of the FactSet segment average.
“VGMS seamlessly integrates institutional-grade active investment strategies with Vanguard’s hallmark of low-cost leadership, delivering a powerful and differentiated solution for advisors and investors navigating today’s complex and fast-evolving markets,” noted S"ara Devereux, global head of Vanguard Fixed Income Group.":https://corporate.vanguard.com/content/corporatesite/us/en/corp/who-we-are/pressroom/press-release-vanguard-launches-new-actively-managed-bond-etf-06112025.html
For more news, information, and analysis, visit the Fixed Income Channel.
