Vanguard Group expanded its family of exchange-traded funds Thursday by introducing an international portfolio and said it plans to add bond ETFs this year.
In January the company filed a registration statement with the Securities and Exchange Commission to offer exchange-traded shares for four existing bond index portfolios, the Vanguard Total Bond Market Index Fund, Short-Term Bond Index Fund, Intermediate-Term Bond Index Fund, and Long-Term Bond Index Fund.
Martha Papariello, a principal at Vanguard Financial Advisor Services, said, "We expect the bond ETFs to happen next month. We are just awaiting final approval from the SEC, which appears likely."
The Malvern, Pa., fund giant launched its 28th fund with ETF shares available on Thursday when it introduced the Vanguard FTSE All-World ex-US Index Fund. The international fund will offer exposure in a single portfolio to both developed and emerging-country stock markets outside the United States.
Vanguard ETFs have gained ground in an increasingly crowded marketplace during the past year, Ms. Papariello said. In July the company renamed its Viper Shares as Vanguard ETFs in an effort to more closely align its ETF family with the Vanguard brand.
The company started its first ETF in 2001, and its ETF portfolios now have $22.3 billion of assets. Assets in Vanguard ETFs doubled last year.
With the addition of its all-world portfolio, Vanguard has four ETFs tracking broad international stock markets, 13 tracking broad domestic stock markets, and 11 targeting specific domestic stock sectors.
Ms. Papariello said Vanguard is confident it can continue to expand its ETF assets under management.
"We are seeing positive response from banks, financial advisers at broker-dealers, and the registered investment advisory community, and what we see in those patterns of investment is a steady stream of investing," she said. "We are being added to model portfolios at all those institutions, and that has created a steady flow that we expect will continue."
The new international fund is designed to capture results from 95% of the investable developed and emerging-country markets outside the United States by tracking the performance of the FTSE All-World ex-US Index.
The fund is to invest in large- and mid-capitalization stocks of companies in 47 countries, including Canada. It will be available in investor shares, institutional shares, and ETF shares. The minimum initial investment required by the fund is $3,000 for investor shares and $5 million for institutional shares; ETF shares, however, are available with no minimum requirement.
"ETFs allow the latitude for an investor to invest at any level," Ms. Papariello said. "The key difference is that an investor must pay a commission and the portfolio must be purchased through a broker."
Vanguard manages $1.1 trillion in mutual fund assets and offers 140 funds to U.S. investors and more than 40 additional portfolios in foreign markets.
Ms. Papariello said the company would try to continue adding ETFs, potentially including more international portfolios. "I wouldn't leave anything off the table or out of the realm of possibility," she said.
