Richard Kang1

Vanguard Offers Four New Bond ETFs

AH: Agreed, the income earned from fixed income ETFs would hurt foreign investors more with the withholding tax. Most equity based ETFs are highly tax efficient so it's another argument against the bond ETFs ... and could be significant one depending on investor. I'll be interested to see if the new Vanguard bond ETFs rise to a decent level of AUM and even take some from BGI. Fixed income is one of the areas where BGI will have to consider pricing more carefully and soon. Maybe not their newer bond ETFs but certainly the original treasury ETFs and perhaps AGG and TIP.

I'm sticking to my guns on this one though. For most retail investors = Equity core and explore: ETFs core, stock selection satellite. Fixed income core and explore: Laddered bond portfolio core, fixed income ETFs as satellites.