| |
Transaction
Fee on Purchases and Sales
|
|
Transaction
Fee on Reinvested Dividends
|
|
| |
Management
Fees
|
|
12b-1
Distribution Fee
|
|
Other
Expenses
|
|
Acquired Fund
Fees and Expenses
|
|
Total Annual
Fund Operating Expenses
|
|
1
Year
|
3
Years
|
5
Years
|
10
Years
|
$ |
$ |
$ |
$ |
|
Total Return |
Quarter |
|
|
|
|
- |
|
|
1
Year |
Since
Fund
Inception |
Fund
Inception
Date |
Vanguard
Total Corporate Bond ETF Shares |
|
|
|
Based
on NAV |
|
|
|
Return Before
Taxes |
|
|
|
Return After
Taxes on Distributions |
|
|
|
Return After
Taxes on Distributions and Sale of Fund
Shares |
|
|
|
Based
on Market Price |
|
|
|
Return Before
Taxes |
|
|
|
Bloomberg
U.S. Corporate Bond Index
(reflects no
deduction for fees, expenses, or taxes) |
|
|
|
Bloomberg
U.S. Aggregate Float Adjusted Index
(reflects no
deduction for fees, expenses, or taxes) |
|
|
|
Plain
Talk About Fund Expenses
|
All funds
have operating expenses. These expenses, which are deducted
from a
fund’s gross income, are expressed as a percentage of the net assets
of the
fund. Assuming that operating expenses remain as stated in the Fees
and
Expenses section, Vanguard Total Corporate Bond ETF Shares’ expense
ratio
would be 0.04%, or $0.40 per $1,000 of average net assets. The
average
expense ratio for core bond funds in 2020 was 0.68%, or $6.80 per
$1,000
of average net assets (derived from data provided by Lipper, a
Thomson
Reuters Company, which reports on the fund industry).
|
Plain
Talk About Costs of Investing
|
Costs
are an important consideration in choosing an ETF. That is because
you,
as a shareholder, pay a proportionate share of the costs of operating a
fund
and any transaction costs incurred when the fund buys or sells
securities.
These costs can erode a substantial portion of the gross income
or
the capital appreciation a fund achieves. Even seemingly small differences
in
expenses can, over time, have a dramatic effect on a fund’s
performance.
|
Type
of Bond (Maturity) |
After
a 1%
Increase
|
After
a 1%
Decrease
|
After
a 2%
Increase
|
After
a 2%
Decrease
|
Short-Term
(2.5 years) |
$
977 |
$
1,024 |
$
954 |
$
1,049 |
Intermediate-Term
(10 years) |
922 |
1,086 |
851 |
1,180 |
Long-Term
(20 years) |
874 |
1,150 |
769 |
1,328 |
Plain
Talk About Bonds and Interest Rates
|
As
a rule, when interest rates rise, bond prices fall. The opposite is also
true:
Bond
prices go up when interest rates fall. Why do bond prices and interest
rates
move in opposite directions? Let’s assume that you hold a bond
offering
a 4% yield. A year later, interest rates are on the rise and bonds of
comparable
quality and maturity are offered with a 5% yield. With
higher-yielding
bonds available, you would have trouble selling your 4% bond
for
the price you paid—you would probably have to lower your asking price.
On
the other hand, if interest rates were falling and 3% bonds were being
offered,
you should be able to sell your 4% bond for more than you
paid.
|
Plain
Talk About Bond Maturities
|
A bond is
issued with a specific maturity date—the date when the issuer
must pay
back the bond’s principal (face value). Bond maturities range from
less
than 1 year to more than 30 years. Typically, the longer a bond’s
maturity,
the more
price risk you, as a bond investor, will face as interest rates
rise—but
also the higher the potential yield you could receive. Longer-term
bonds
are generally more suitable for investors willing to take a greater risk
of price
fluctuations to get higher and more stable interest income.
Shorter-term
bond investors should be willing to accept lower yields and
greater
income variability in return for less fluctuation in the value of their
investment.
The stated maturity of a bond may differ from the effective
maturity
of a bond, which takes into consideration that an action such as a
call or
refunding may cause bonds to be repaid before their stated
maturity
dates.
|
Plain
Talk About Credit Quality
|
A
bond’s credit quality rating is an assessment of the issuer’s ability to
pay
interest
on the bond and, ultimately, to repay the principal. The lower the
credit
quality, the greater the perceived chance that the bond issuer will
default,
or fail to meet its payment obligations. All things being equal, the
lower
a bond’s credit quality, the higher its yield should be to compensate
investors
for assuming additional risk.
|
Plain
Talk About Vanguard’s Unique Corporate Structure
|
The
Vanguard Group is owned jointly by the funds it oversees and thus
indirectly
by the shareholders in those funds. Most other mutual funds are
operated
by management companies that are owned by third parties—either
public
or private stockholders—and not by the funds they serve.
|
Plain
Talk About Distributions
|
As
a shareholder, you are entitled to your portion of a fund’s income from
interest
as well as capital gains from the fund’s sale of investments. Income
consists
of interest the fund earns from its money market and bond
investments.
Capital gains are realized whenever the fund sells securities for
higher
prices than it paid for them. These capital gains are either short-term
or
long-term, depending on whether the fund held the securities for one year
or
less or for more than one year.
|
|
Inception Date
|
Vanguard Fund
Number |
CUSIP Number
|
Total
Corporate Bond ETF
|
11/7/2017
|
985
|
92206C573
|
|
Year Ended August
31, |
November 7,
20171 to
August
31, | ||
For a
Share Outstanding Throughout Each Period |
2021 |
2020 |
2019 |
2018 |
Net
Asset Value, Beginning of Period |
$92.62 |
$89.19 |
$81.59 |
$85.00 |
Investment
Operations |
|
|
|
|
Net
Investment Income2
|
2.229 |
2.638 |
2.825 |
2.081 |
Capital
Gain Distributions Received2
|
.053 |
— |
— |
— |
Net
Realized and Unrealized Gain (Loss) on Investments |
(.131) |
3.614 |
7.717 |
(3.445) |
Total from
Investment Operations |
2.151 |
6.252 |
10.542 |
(1.364) |
Distributions |
|
|
|
|
Dividends
from Net Investment Income |
(2.221) |
(2.822) |
(2.942) |
(2.046) |
Distributions
from Realized Capital Gains |
— |
— |
— |
— |
Total
Distributions |
(2.221) |
(2.822) |
(2.942) |
(2.046) |
Net
Asset Value, End of Period |
$92.55 |
$92.62 |
$89.19 |
$81.59 |
Total
Return |
2.37% |
7.18% |
13.29% |
-1.60% |
Ratios/Supplemental
Data |
|
|
|
|
Net
Assets, End of Period (Millions) |
$695 |
$619 |
$203 |
$55 |
Ratio of
Total Expenses to Average Net Assets |
— |
— |
— |
—3
|
Acquired
Fund Fees and Expenses |
0.04% |
0.05% |
0.05% |
0.07%3
|
Ratio of
Net Investment Income to Average Net Assets |
2.43% |
2.94% |
3.38% |
3.10%3
|
Portfolio
Turnover Rate4
|
10% |
40% |
12% |
4%
|
|
|
1 |
Inception. |
2 |
Calculated
based on average shares outstanding. |
3 |
Annualized. |
4 |
Excludes the
value of portfolio securities received or delivered as a result of in-kind
purchases or redemptions of
the fund’s
capital shares, including ETF Creation Units.
|