Key takeaways

• The new Vanguard Global Core and Global Strategic Bond Funds are actively managed all-in-one bond strategies which both offer broad exposure to global bond markets in a single fund.

• The funds are designed to be used as the core component of investors’ fixed income portfolios, either on their own or paired with other bond strategies. 

• The funds aim to consistently beat their benchmarks without taking undue risk.

As investors continue to face an investment landscape marked by uncertainty, the investment climate for fixed income is changing. Amid this uncertain environment, demand for active fixed income strategies has risen significantly and is expected to continue.

The new Vanguard Global Core Bond Fund and Vanguard Global Strategic Bond Fund both offer investors actively managed exposure to global fixed income markets through a single fund. The funds are designed to be used as the core component in investors’ fixed income portfolios—either on their own or paired with other bond strategies.

Both funds seek to consistently outperform their benchmarks while limiting drawdowns. The Global Core Bond Fund aims to outperform the Bloomberg Global Aggregate Index, while the Global Strategic Bond Fund seeks to outperform the Bloomberg Multiverse Index. 

The funds invest primarily in investment-grade government, corporate and structured debt securities issued in developed markets - providing high-quality ballast against equity market volatility in investor portfolios. Both funds can also invest in high-yield and emerging market debt, with the Vanguard Global Strategic Bond Fund having greater flexibility to invest across these sub-asset classes. The Global Strategic strategy is therefore aimed at investors seeking additional returns.  

With ongoing charges figures (OCFs) for the Global Core and Global Strategic Bond Funds starting at just 0.25% and 0.30%¹, respectively, the funds are among the most cost-effective active fixed income strategies in the market². Further, they are backed by the global experience, expertise and execution capabilities of Vanguard’s Fixed Income Group, one of the world’s largest active fixed income managers with over $2.6 trillion³ in assets under management. This means our active bond managers have access to an in-house global team of credit research analysts with the depth and breadth of coverage to make them ideally positioned to identify new opportunities—as well as potential risks—in fixed income markets.

Why Vanguard has launched the new funds

By launching these new active global bond funds, Vanguard is expanding its active fixed income fund line-up to align with the exposures most commonly used by our investors, at a lower cost².

Both funds will be co-managed by Ales Koutny, Head of International Rates, and Sarang Kulkarni, lead portfolio manager for Vanguard’s Global Credit Bond Fund and pan-European corporate strategies.

The managers have the flexibility to adapt their allocations to changing market and interest rate conditions, allowing them to pursue attractive opportunities across global bond markets while also controlling downside risk during periods of heightened market volatility.

The funds seek to consistently generate excess returns—or alpha—relative to their benchmarks, primarily through sector allocation, security selection and macroeconomic decisions. 

Global Core and Global Strategic investment strategies explained

While both funds have the ability to invest in high-yield and emerging market bonds, the Global Strategic Bond Fund has greater flexibility to invest in these sub-asset classes than the Global Core Bond Fund. 

Fund comparison

Both funds have alpha targets that align with their risk and investment objectives. The Global Core Bond Fund has a gross annual alpha target of 60 basis points (bps), while the Global Strategic Bond Fund has a gross annual alpha target of 75 bps. These targets are in the context of clear risk guardrails that limit the funds’ credit and duration exposures and offer investors transparency around performance and positioning.

Vanguard’s low-cost advantage in active fixed income 

Vanguard has been lowering costs for investors since we launched our first investment fund over 50 years ago. Keeping our active fund costs low not only helps our investors keep more of their returns, it also allows our active bond managers to pursue alpha without taking excessive risks to offset high fees. 

Our lower fees mean our active bond funds tend to produce better risk-adjusted returns compared with other funds in their peer groups, with 42 of our 46 active bond funds globally outperforming their Lipper peer group averages over the last 10 years⁴.

¹ The OCF covers management fees and service costs such as administration, audit, depositary, legal, registration and expenses incurred in respect of the funds. For the Global Core Bond Fund, the OCF for the Institutional Plus share class is 0.25% (increasing to 0.35% for the Investor share class); for the Global Strategic Bond Fund, the OCF for the Institutional Plus share class is 0.30% (increasing to 0.40% for the Investor share class).

² Source: Vanguard and Morningstar, as at 30 June 2025. The OCF for the Investor share class of the Global Core Bond Fund is 0.35% versus a peer group average of 0.69% (Global Diversified Bond). The OCF for the Global Strategic Bond Fund Investor share class is 0.40%, versus a peer group average of 1.00% (Global Flexible Bond).

³ Source: Vanguard, as at 31 December 2024. Includes global fixed income assets under management.

⁴ Source: LSEG Lipper. Data as at 31 March 2025. The percentage of Vanguard funds globally in each category that outperformed the average return of their peer group of mu¬tual funds. For the 10-year period, 42 of 46 active bond funds outperformed their peer group averages. Results will vary over other time periods. Only funds with a minimum 10-year history were included in the comparison. Not all funds included are available in Europe.

Investment risk information

The value of investments, and the income from them, may fall or rise and investors may get back less than they invested.

Past performance is not a reliable indicator of future results.

Some funds invest in emerging markets which can be more volatile than more established markets. As a result the value of your investment may rise or fall.

Funds investing in fixed interest securities carry the risk of default on repayment and erosion of the capital value of your investment and the level of income may fluctuate. Movements in interest rates are likely to affect the capital value of fixed interest securities. Corporate bonds may provide higher yields but as such may carry greater credit risk increasing the risk of default on repayment and erosion of the capital value of your investment. The level of income may fluctuate and movements in interest rates are likely to affect the capital value of bonds.

The Funds may use derivatives in order to reduce risk or cost and/or generate extra income or growth. The use of derivatives could increase or reduce exposure to underlying assets and result in greater fluctuations of the Fund's net asset value. A derivative is a financial contract whose value is based on the value of a financial asset (such as a share, bond, or currency) or a market index.

Some funds invest in securities which are denominated in different currencies. Movements in currency exchange rates can affect the return of investments.

For further information on risks please see the “Risk Factors” section of the prospectus on our website.

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