Vanguard Launches Active Emerging Markets Bond ETF (VEMB)

Vanguard has launched the Vanguard Emerging Markets Bond Active ETF (VEMB), expanding its actively managed fixed income lineup with a flexible strategy targeting emerging market debt. The fund invests at least 80% of its assets in bonds tied to emerging economies, including sovereign, corporate, and financial institution debt across maturities and credit qualities. VEMB aims to maintain most of its bond exposure in U.S. dollars or hedged to the dollar, while retaining flexibility to invest in unhedged local-currency bonds. The strategy can allocate a majority of assets to high-yield and distressed debt, including defaulted securities, and use derivatives such as credit default swaps, interest rate swaps, and currency forwards to manage exposures or pursue opportunities. As a nondiversified fund, VEMB may also concentrate investments in specific countries or regions.