Vanguard introduces new ETFs, mutual fund

TREDYFFRIN » Vanguard Tuesday filed a registration statement for six new factor-based ETFs and one factor-based mutual fund, representing its first introduction of actively managed ETFs in the U.S. The company currently offers suites of active factor ETFs in Canada and the United Kingdom. The new factor funds are expected to begin trading in the first quarter of 2018, the mutual fund company said.

Five single factor funds are designed for financial advisors and institutional investors seeking to achieve specific risk or return objectives through targeted factor exposures: minimum volatility, value, momentum, liquidity, and quality. The sixth ETF and fund will offer a multi-factor approach.

“Our factor-based fund offerings serve as a valuable extension of our low-cost active lineup, providing additional ways for suitable investors to help meet their long-term objectives by targeting exposure to specific factors in the market,” said Vanguard Chief Investment Officer Greg Davis. “With Vanguard’s actively managed, rules-based approach to factors, investors can now harness well-known factor exposure in a more transparent and lowcost way.”

The new suite of active factor offerings includes the Vanguard:

• U.S. Minimum Volatility ETF – seeks to provide long-term capital appreciation with lower volatility relative to the broad U.S. equity market.

• U.S. Value Factor ETF – seeks

to provide long-term capital appreciation by investing in stocks with relatively lower share prices relative to fundamental values.

• U.S. Momentum Factor ETF – seeks to provide longterm

capital appreciation by investing in stocks with strong recent performance.

• U.S. Liquidity Factor ETF – seeks to provide long-term capital appreciation by investing in stocks with lower measures of trading liquidity.

• U.S. Quality Factor ETF – seeks to provide long-term capital appreciation by investing

in stocks with strong fundamentals.

• U.S. Multifactor ETF – seeks to provide long-term capital appreciation by investing in stocks with relatively strong recent performance, strong fundamentals, and low prices relative to fundamentals.

• U.S. Multifactor Fund – seeks to provide long-term

capital appreciation by investing in stocks with relatively strong recent performance, strong fundamentals, and low prices relative to fundamentals.

The company said its five single factor-based ETFs will have an estimated expense ratio of 0.13 percent; the Multifactor ETF and Multifactor Fund will have

an estimated expense ratio of 0.18 percent. The Multifactor Fund will require a minimum initial investment of $50,000 for Admiral Shares.

Vanguard, with a sprawling presence along Route 202 in eastern Chester County, is one of the world’s largest investment management companies. As of

Oct. 31, Vanguard managed $4.8 trillion in global assets. The firm has more than 371 funds and more than 20 million investors worldwide.

DIGITAL FIRST MEDIA FILE PHOTO A Vanguard sign at one of the company’s buildings in East Whiteland.