What sets our active fixed income funds apart
86% of our global funds outperformed
5-year track record across US and Ireland domiciled funds versus peer group (1)
Over 40 years’ experience
We've built a long track record of success with over 40 years' experience in active fixed income.
96% lower cost
96% of our US and Europe active fixed income funds are in the lowest decile (2).
£1.7 trillion in AUM
Fixed income assets managed globally. Managed by over 200 fixed income specialists (3).
Past performance is not a reliable indicator of future results, and all investments are subject to risk.
(1) Sources: Vanguard, based on data from Morningstar and Vanguard Interface for Fund Information (Vifi), as of June 2026. See the end of the page for details on the methodology.
(2) Source: Morningstar Direct as of June 2026. See the end of the page for details on the methodology.
(3) Source: Vanguard. Data as at July 2026. Currency is GBP.
How our approach to active fixed income delivers value
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Process
- True to label: Funds designed to generate alpha while maintaining the characteristics and exposure you expect.
- Diversified sources of alpha: Pursuing alpha through diversified and repeatable sources of return.
- Smart risk-taking discipline: A disciplined approach to balancing upside potential with downside protection.
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Structural advantage
- Low-cost advantage: Lower costs mean we do not need to take big bets to generate alpha. Instead, we can focus on long-term investment opportunities.
- Scale and expertise: Using our scale, experience and expertise to uncover opportunities across global fixed income markets.
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Outcome
Seek consistent outperformance: A process designed to deliver more consistent excess returns over time.
Explore our process
When constructing portfolios, understanding how a strategy is likely to behave can be just as important as the returns it generates.
Our true to label approach seeks to deliver alpha while remaining aligned with the fund's stated objective and investment universe. This helps you allocate with greater confidence and avoid unintended portfolio exposures.
Relying on a concentrated source of alpha can increase portfolio risk. We seek to generate excess returns through a range of diversified and uncorrelated sources of alpha, helping to reduce reliance on any single theme, sector or market view. This approach can support more resilient portfolios across different market conditions.
Generating excess returns requires taking risk, but that risk needs to be managed carefully. We allocate risk deliberately across the portfolio, seeking opportunities for outperformance while helping to limit losses during more challenging market periods. The goal is to deliver a more consistent source of excess returns that advisers can use with confidence.
Explore our structural advantage
Low costs do more than help investors retain more of their returns. They can fundamentally change the economics of active management. A lower fee hurdle means our teams can be more selective in the risks they take, focusing on opportunities where they believe investors are appropriately rewarded. This can support a more disciplined source of excess returns and reduce reliance on taking additional risk to overcome higher fees.
With £1.7 trillion (1) globally in fixed income assets under management, over 40 years of experience and over 200 investment professionals globally, we have the scale and expertise to uncover opportunities across fixed income markets. Providing you with confidence that investment decisions are informed by deep research, broad market coverage and diverse perspectives.
(1) Source: Vanguard. Data as at July 2026. Currency is GBP.
Our active fixed income range
Vanguard Global Core and Global Strategic Bond Funds
A core fixed income portfolio, designed for outperformance with a bottom-up approach to security selection.
Vanguard Global Credit Bond Fund
A core fixed income portfolio, designed for outperformance with a bottom-up approach to security selection.
Vanguard Global Short-Term Core Bond Fund
Bridging cash and longer-term bonds, with balance built in.
Vanguard Emerging Markets Bond Fund
An emerging markets bond portfolio designed to outperform by identifying diversified sources of alpha while avoiding the potential for significant drawdown.
The value of investments, and the income from them, may fall or rise and investors may get back less than they invested.
Vanguard’s Head of Global Fixed Income explains our approach
Vanguard is well known for our index funds, but here's something you may not know. Vanguard is one of the world's largest active fixed income fund managers. Our 40 years of experience have honed a time-tested trifecta. Our active team, our process, and our low fees, which enable our differentiated approach to risk taking, have delivered strong outcomes for our clients. It starts with our team.
In our active business, we have about 150 portfolio managers, traders, and research analysts worldwide, specializing in all publicly traded fixed income sectors. That allows for a depth of expertise across the bond market. Rather than relying on concentrated risk positions, our managers deploy a diversified set of strategies that we believe offers our clients a better chance of investment success. Our process thrives on close collaboration and specialized skill.
Portfolio managers marry the macroeconomic trends with the perspectives from the sector analysts, creating an optimal approach for each fund. Simultaneously, our analysts and traders actively pursue the best opportunities in the markets they cover. And, our low expense ratios allow us to take a differentiated approach when taking risks. Given our low fees, we have an asymmetric advantage to deliver net outperformance to our clients.
When the risk reward outlook appears less attractive, for example, when a recession may be on the horizon, we could take a more defensive approach in credit. We don't have to take significant risks through all market environments just to try to deliver outperformance above our fees. And when the market presents attractive opportunities, our specialized teams are intent on finding the best course to implement across our portfolios. Taken together, our active fixed income team, process, and low fees have enabled Vanguard to deliver strong outcomes for our clients.
Learn more about our approach to active fixed income
Active fixed income at Vanguard
Read more about Vanguard’s active fixed income strategy – built for consistent, cost-effective performance.
Download brochureInsights and webinars about active fixed income
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Finding higher ground in active fixed income
Higher yields offer attractive income potential and a greater cushion against volatility, creating opportunities for active investors.
(1) Methodology: For the five-year period ended 30 June 2026, globally, 25 of 29 (86%) actively managed Vanguard active fixed income funds outperformed their Morningstar peer group median. The comparison includes US and Ireland domiciled funds with a minimum five-year track record. Not all funds included are available in Europe. Results for other time periods will vary.
(2) Methodology: All competitor fund data is sourced from Morningstar Direct as of June 2026. The combination of Morningstar category and management style define Vanguard's category. Lowest-decile expense ratios are calculated excluding Vanguard funds. Vanguard's updated primary shareclass expense ratios (effective February 1, 2026) were compared with the lowest-decile expense ratios in each category. Summing all active fixed income funds that were less than or equal to the lowest-decile expense ratio and dividing by total active fixed income funds resulted in 96% (43 out 45 - rounded to nearest whole number) of funds in the lowest-cost decile.
Investment risk information
The value of investments, and the income from them, may fall or rise and investors may get back less than they invested.
Some funds invest in emerging markets which can be more volatile than more established markets. As a result the value of your investment may rise or fall.
Investments in smaller companies may be more volatile than investments in well-established blue chip companies.
Funds investing in fixed interest securities carry the risk of default on repayment and erosion of the capital value of your investment and the level of income may fluctuate. Movements in interest rates are likely to affect the capital value of fixed interest securities. Corporate bonds may provide higher yields but as such may carry greater credit risk increasing the risk of default on repayment and erosion of the capital value of your investment. The level of income may fluctuate and movements in interest rates are likely to affect the capital value of bonds.
The Vanguard Emerging Markets Bond Fund and Vanguard Global Credit Bond Fund may use derivatives, including for investment purposes, in order to reduce risk or cost and/or generate extra income or growth. For all other funds they will be used to reduce risk or cost and/or generate extra income or growth. The use of derivatives could increase or reduce exposure to underlying assets and result in greater fluctuations of the Funds net asset value. A derivative is a financial contract whose value is based on the value of a financial asset (such as a share, bond, or currency) or a market index.
Some funds invest in securities which are denominated in different currencies. Movements in currency exchange rates can affect the return of investments.
For further information on risks please see the “Risk Factors” section of the prospectus on our website.
Important information
This is a marketing communication.
This is directed at professional investors and should not be distributed to, or relied upon by retail investors.
For further information on the fund's investment policies and risks, please refer to the prospectus of the UCITS and to the KIID before making any final investment decisions. The KIID for this fund is available, alongside the prospectus via Vanguard’s website.
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