Vanguard Plans to Expand Fixed Income Offerings

By Davide Barbuscia

NEW YORK (Reuters) – Vanguard’s new chief, Salim Ramji, announced plans on Wednesday to expand the fixed income offerings of the U.S.’s top asset manager, acknowledging the market’s size and potential opportunities.

Ramji highlighted that Vanguard aims to apply “the same mindset” used in the equities market to the fixed income space. “Our clients can benefit from that type of mindset… They can get better and better quality fixed income exposure,” he stated at the Financial Times’ Future of Asset Management North America conference in New York. He emphasized the firm’s mission to reduce costs while enhancing the quality of exposures for their clients.

Vanguard, managing approximately $9 trillion in assets, stands as the world’s second-largest asset manager, following BlackRock (NYSE: BLK).

Having taken over as CEO in July, Ramji succeeded Tim Buckley and joined the Malvern, Pennsylvania-based firm from BlackRock, where he managed two-thirds of the firm’s assets and contributed to its growth.

Both Vanguard and BlackRock are leading providers of exchange-traded funds (ETFs), which are low-cost investment products that cater to retail investors aiming to access large market sectors affordably.

Over the past two years, fixed income markets have faced significant volatility due to rapid interest rate increases across developed territories, adversely impacting bond prices but elevating yields. Such higher yields have subsequently drawn substantial inflows to the asset class.

Ramji stated, “When you look at the macro environment for fixed income today, relative to say 10 years ago, it has a really important place.” He believes its significance will increase based on long-term interest rate expectations.

Additionally, Ramji expressed interest in exploring opportunities within private markets, which encompass both private debt and equity. He mentioned, “In privates we’re open to exploring partnerships.”