Vanguard's bond ETF discount exceeds 6%

Fixed income disruptions

Vanguard has seen its total market bond ETF (BND) suffer from the recent volatility, with its 12 March closing price trading on a 6.2% discount to NAV.

As noted yesterday, fixed income market disruptions in the week beginning 9 March caused greater disparity than is typical between the price of bond ETFs and the value of their constituent bonds, leading to this discount. Fixed income ETFs tend to trade at a premium, rather than discount, to NAV, with BND's average closing premium totalling 0.17% since its launch in 2007. Vanguard outpaces rivals in platform sales in 2019 Rich Powers, head of ETF product management at Vanguard, noted that discounts of 1-4% had become common across Vanguard's entire fixed income ETF range over the p...