The Vanguard Group is an American investment management company founded by John Bogle, who was chairman of Wellington Management Company in 1975. Vanguard's headquarters are currently located in Malvern, Pennsylvania. As of Dec. 31, 2014, the fund has $3 trillion in global assets under management (AUM), and approximately 160 U.S. funds and 120 non-U.S. funds. Vanguard has 20 million investors and over 14,000 employees across the globe. It was the first company credited with making index funds available to the public. As of Jan. 20, 2016, the Vanguard Group became the second-largest provider of exchange-traded funds (ETFs) and had over $400 billion in ETF assets.

The Vanguard Group Overview

The Vanguard Group focuses on providing investment vehicles to individual investors and institutional investors. Vanguard offers an array of ETFs and mutual funds, which include passively managed index funds and actively managed funds. Within the scope of these funds, investors may choose among equity funds, sector-specific funds, fixed-income funds, balanced funds, target-date retirement funds, municipal bond funds and specialty funds.

Vanguard is well-recognized for its extremely low annual net expense ratios. As of Dec. 31, 2014, Vanguard funds have an average annual expense ratio of 0.18%, while the industry average expense ratio is 1.02%. This is an attractive cost advantage that can save investors $1,425 over 10 years and $4,811 over 20 years based on an initial investment of $10,000.

Mortimer J. Buckley is the chief investment officer (CIO) and managing director, and he supervises Vanguard's fixed-income group and its equity-investment group. Gregory Davis, who is a chartered financial analyst (CFA), serves as the principal and global head of the fixed-income group. Davis has been managing Vanguard investment portfolios for over 15 years.

Vanguard Fixed Income Index Funds Overview

Vanguard fixed-income funds are primarily managed by the Vanguard Fixed Income Group. As of Sept. 30, 2015, senior investment professionals have an average of 13 years with Vanguard and over 20 years of investment management experience. Vanguard offers 18 fixed-income index funds that are open to new investors. As of Jan. 29, 2016, these bond index funds are all up year to date (YTD); returns range from 0.26 to 5.22%. These fixed-income index funds track multiple aspects of the fixed-income market, such as various Treasury or agency investment-grade and tax-exempt bonds. These bond index funds are passively managed and seek to track the investment results corresponding to their benchmark indexes.

Vanguard's Treasury fixed-income index funds include funds that invest in short-, intermediate- and long-term bonds. As of Dec. 31, 2015, Vanguard's three short-term treasury index bond funds have an average duration shorter than three years. Vanguard offers four intermediate-term treasury index bond funds with average durations ranging from four to six and a half years. It offers two long-term Treasury bond index funds with average durations of 17 years and approximately 15 years. Vanguard's Treasury bond index funds have low annual expense ratios ranging from 0.07 to 0.2%; most of these index funds only charge an expense ratio of 0.1%.

Vanguard offers three investment-grade corporate bond index funds, two of which charge purchase fees of 1% or less. These funds carry a moderate degree of risk. However, they offer attractive 30-day SEC yields ranging from 2.25 to 3.62% as of Jan. 29, 2016. As of Dec. 31, 2015, its long-, intermediate- and short-term corporate bond index funds have an average duration ranging from three to 13 years.

Vanguard only offers one tax-exempt bond index fund open to new investors, which is available as investor shares, admiral shares and an ETF. This fund invests in municipal bonds comprising its benchmark index and normally has an average duration between five and eight years.

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