Vanguard Global Government Bond

ETF description

This ETF aims to provide exposure to government bonds from countries around the world. Government bonds are essentially loans that investors make to national governments, which pay interest over time and return the original loan amount at a set point in the future. The bonds held by this ETF come from a variety of countries and are all denominated in different currencies. The ETF uses a hedging strategy to reduce the impact of changes in currency values relative to the British pound, which means it focuses more on the movements of the bonds themselves rather than exchange rate fluctuations.

This ETF may appeal to investors who want diversified exposure to global government debt and are looking to balance out other parts of a portfolio with a fixed‑income element.

Issuer details

Vanguard is the largest provider of mutual funds and the second‑largest provider of ETFs in the world.

Vanguard is a major American investment management company headquartered in Malvern, Pennsylvania. It’s known for being the largest provider of mutual funds in the world and the second‑largest provider of ETFs after BlackRock’s iShares with over $8trn in global assets under management (as at June 2024). Vanguard was founded in 1975 by John C. Bogle and is notable for its unique ownership structure — it is owned by its funds, which in turn are owned by their shareholders. This structure is designed to align Vanguard’s interests with those of its investors, helping to keep costs low.

Index details

The Bloomberg Global Treasury Developed Countries Float Adjusted Index Hedged in GBP will invest in a portfolio of local currency government bonds (including callable bonds) from developed countries. The index is designed to reflect the universe of float adjusted fixed‑rate, investment‑grade, local currency government debt of developed (as determined by the index provider) countries. The bonds must have a maturity of at least one year.