By Andrew Welsch

Vanguard launched two short-term fixed-income exchange-traded funds Tuesday, adding to a spate of recent ETF launches by asset managers.

The company's Ultra-Short Treasury ETF $(VGUS)$ and Vanguard 0-3 Month Treasury Bill ETF $(VBIL)$ will each have an estimated expense ratio of 0.07%, the company says. That is in line with Vanguard's emphasis on low-cost investing and comes after the company slashed fees across dozens of funds earlier this month. As the new ETFs names indicate, the two new ETFs emphasize short durations. They provide investors with more options when selecting from among Vanguard's stable of fixed-income ETFs.

"These new ultrashort Treasury products serve as valuable tools for advisors and investors to build more precise and flexible portfolios, bridging the gap between money-market funds and existing ultrashort-term bond offerings in the ETF wrapper," says Sara Devereux, global head of Vanguard Fixed Income Group.

The company says VGUS will track the Bloomberg Short Treasury Index, which includes Treasury bills, notes, and bonds with less than 12 months until maturity. VBIL will track the Bloomberg US Treasury Bills 0-3 Months Index, the company says. Both funds will be managed by Josh Barrickman, co-head of Fixed Income Group Indexing in the Americas at Vanguard.

In recent years, the Valley Forge, Pa.-based company has been building upon its fixed-income capabilities and launching more funds, particularly actively managed ones. Devereux says Vanguard's goal is to provide investors with a diverse range of products and fill out its fund lineup. Among recent fund launches, Vanguard added two actively managed municipal bond ETFs in November. Although Vanguard has traditionally turned to outside managers such as Wellington and Baillie Gifford to oversee equity funds, it relies on in-house expertise to manage its bonds funds. The company's fixed-income group has more than $2.5 trillion in global assets under management, according to Vanguard.

ETFs have been soaring in popularity with investors and set records last year for flows and fund launches. Investors have favored ETFs over mutual funds because of their ease of use and transparency. They plowed more than $1.1 trillion into passive and active ETFs last year, according to Morningstar.

Write to Andrew Welsch at andrew.welsch@barrons.com

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February 11, 2025 12:48 ET (17:48 GMT)

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