Bonds, or fixed interest investments as they are commonly known, play an important role in a balanced investment strategy. In addition to providing a regular income stream - an important feature for many investors - bonds can provide a stabilising effect during periods of share market volatility. Including both international and Australian fixed interest securities in a portfolio has two major benefits for investors:
- increases diversification, which lowers risk
- provides opportunities for enhanced returns without resorting to lower grade, higher risk debt
- self managed super funds
Vanguard's International Fixed Interest Index Fund invests in around 500 fixed interest securities from 22 governments around the world. The fund is fully hedged into Australian dollars.
Who it may suit
- short to medium term investors (usually 3 to 5 years)
- investors requiring a high quality, high yielding income stream such as retirees or those nearing retirement
- investors seeking a low risk, diversified investment portfolio of high quality debt securities
- investors looking to add diversification and balance to a share-oriented portfolio
- DIY super funds
Objectives
The fund seeks to match the total return of the Lehman Global Treasury Index (hedged into Australian dollars) before taking into account fund fees and expenses.
Benefits
| Diversification |
|
| International exposure provides opportunities to enhance returns |
|
| Income and capital growth potential |
|
| Low fees |
|
| Flexibility |
|
Investment requirements and fees
| Minimum investment amounts | |
| Initial investment |
$500,000
|
| Additional investments |
Nil
|
| Holding balance |
Nil
|
| Switch/withdrawal |
Nil
|
| Buy/sell spread | |
| Purchase |
+0.10%
|
| Withdrawal |
-0.10%
|
| Management costs | |
| Management costs |
0.31% p.a.
|
Risk/return profile
At Vanguard, we believe it's just as important to understand the risks and costs of investing, as it is to know about the rewards.
Our risk/return profiler illustrates the expected risk level and potential return for the Vanguard International Fixed Interest Fund (Hedged) based on historical data. It's important to remember that past performance is no guarantee of future performance and the risk/return profile of each fund may vary from year to year.
