Vanguard Core-Plus Bond ETF VPLS

Vanguard Core-Plus Bond ETF’s experienced management team and robust supporting cast have consistently executed a thoughtful approach, earning a People rating upgrade to Above Average from Average.

Vanguard’s fixed-income platform has evolved materially over the last decade, and the depth and experience of resources now stand out from many peers. Co-lead managers Brian Quigley and Daniel Shaykevich have managed this exchange-traded fund since December 2023 inception, but they have run its mutual fund counterpart Vanguard Core-Plus Bond Fund since its 2021 inception. Their firm experience dates back even further. Quigley joined Vanguard in 2003 as a mortgage specialist and climbed the ranks and now heads the firm’s mortgage-backed securities and agencies sector team. Shaykevich, who joined in 2013 from BlackRock, heads the emerging-market debt group with a risk management background. The duo works with comanager Arvind Narayanan and Michael Chang, both of whom hold leadership roles as head of the investment-grade corporate and high-yield sector team, respectively. The complementary sector expertise makes these managers a good fit for this diversified core-plus bond portfolio.

Effective collaboration between the managers and sector teams has translated into strong decision-making over the years. Each sector team includes a deep pool of analysts, traders, and quantitative analysts who provide fundamental and relative-value insights, while the managers partner closely with a dedicated risk team for continuous oversight.

This collaborative structure is key to the process. Senior fixed-income leaders define the macro framework for duration, yield-curve, and sector positioning, while Quigley and Shaykevich work with sector specialists to select securities among Treasuries, securitized assets, corporate bonds, and emerging-market debt. The team actively manages the portfolio’s duration, a measure of interest rate sensitivity, but keeps that measure within a year of the Bloomberg US Universal Index.

The ETF’s performance record has been strong, albeit short. From January 2024 (the ETF’s first full month) through November 2025, its 5.8% annualized gain outpaced more than three-fourths of distinct intermediate core-plus bond Morningstar Category peers. The mutual fund counterpart, which has a longer track record, also has compelling performance. From November 2021 through November 2025, the Admiral shares’ 0.9% annualized gain beat over 70% of peers.

The strategy applies a disciplined, value-driven approach that is thoughtful and repeatable.

It earns an Above Average Process rating.

The process is straightforward in many ways and blends top-down macro analysis and bottom-up credit, but the firm’s structured framework strengthens decision-making and risk management, which sets the process apart from most peers. Senior fixed-income leaders’ macroeconomic analysis guides high-level positioning, including duration (a measure of interest rate sensitivity), yield-curve stance, and sector tilts. Co-lead managers Brian Quigley and Daniel Shaykevich then adjust the strategy’s risk budget as opportunities emerge. The managers work with sector specialists to debate and discuss portfolio allocations within the guidelines and aim to add value through security selection. They also gain insights from the firm’s dedicated risk team for necessary adjustments.

The managers invest across a broad opportunity set including Treasuries, securitized assets, corporates, and emerging-market debt and can allocate up to 35% of assets in below-investment-grade securities, though they have kept this exposure low due to unattractive valuations (8% as of September 2025). The managers also use derivatives, such as credit default swaps, to obtain precise sector exposures while trying to minimize unwanted duration or yield-curve risks.

The managers typically avoid large interest rate bets and keep the portfolio’s duration close to the Bloomberg US Universal Index but may extend or shorten it by up to a year. Duration has ranged between 5.5 and 5.9 years since its December 2023 inception and has hovered around 5.6 years since year-end 2024. Ahead of the November 2024 US presidential election, the team shortened the ETF’s duration to limit interest rate volatility, bringing it to 5.7 years as of December 2024, about a tenth of a year shorter than the prior quarter.

The group shifts sector exposures where they find attractive value and invest the bulk of the portfolio in Treasuries (21% as of September 2025), securitized assets (29%), corporate bonds (31%), and emerging-market debt (11%). Since December 2023 inception through September 2025, corporate bonds exposure has averaged 31`% of assets. Anticipating tariff-related volatility in early 2025, the managers reduced corporate bonds by about 3 percentage points during the first quarter.

The team has maintained exposure to emerging-market debt to diversify the portfolio and enhance return potential, averaging about 12% over the last five years through September 2025. The managers increased this allocation in early 2025 when valuations appeared attractive but later reduced it to manage risk. As of September 2025, it stood at 11%, roughly 2 percentage points lower than in June 2025.

The liquidity profile of Vanguard Core-Plus Bond ETF is strong compared with other intermediate core plus bond exchange-traded funds. At 5 basis points, the average bid-ask spread as a percentage of the ETF's share price over the past 12 months through November 2025 was tighter than most peers. Its roughly USD 7 million average daily volume of shares traded ranked near the top decile out of 51 ETF rivals and was nearly 7 times greater than that of its peer median.

A seasoned management team effectively leverages Vanguard’s deep fixed-income resources, which were thoughtfully built out over the last decade, earning a People rating upgrade to Above Average from Average.

Managers Brian Quigley and Daniel Shaykevich have co-led the ETF since its December 2023 inception, but they have run the mutual fund version since October 2021. They hold senior leadership roles at the firm and bring more than two decades of industry experience. Quigley joined Vanguard in 2003 and now leads the firm’s MBS and agencies sector team, while Shaykevich, who arrived from BlackRock in 2013 with a risk-management background, leads the emerging-market sector team. They work alongside comanager Arvind Narayanan and Michael Chang, who bring 23 and 25 years of experience. Narayanan joined Vanguard from State Street Global Advisors, where he led the investment-grade credit team, and now serves as head of Vanguard’s investment-grade corporate sector team, while Chang comanaged Goldman Sachs high-yield strategies prior to joining the firm. The managers’ sector expertise and skill sets make them a natural fit to run this diversified portfolio that allocates across these sectors.

Vanguard’s deep fixed-income resources now stand out relative to many rivals. The managers leverage a team of more than 60 analysts, traders, and quantitative analysts across sectors, providing both fundamental and relative-value insights. Firmwide resources add another layer of support, while a dedicated risk team closely monitors portfolio positioning. These resources have helped deliver an edge over peers.

Manager ownership, which reflects alignment with investors, could be better. The four managers do not have personal investments in the ETF.

Vanguard maintains its High Parent Pillar rating as it continues to grow under new leadership.

CEO Salim Ramji has had a busy first year captaining Vanguard’s crew, and the ship remains pointed in the right direction. The firm made its largest round of fee cuts in early 2025, which came at an estimated cost of USD 350 million. It established a separate division dedicated to its advice and wealth management efforts, a sign that it wants to seriously compete within those lines of business. Asset growth has continued to be a huge success. Only BlackRock’s inflows rival the money Vanguard is taking in. Likewise, the number of clients it serves has more than doubled since 2015.

Despite that success, an ever-growing number of clients has presented a challenge: Vanguard can’t grow its services fast enough to keep up with demand. In some instances, it has had to curb certain services and capabilities or raise fees on others to cope, causing some loyal clients to criticize what they perceive as deteriorating services.

Vanguard has ambitions to bring its disruptive legacy to the bond market. It created roughly a dozen low-cost bond exchange-traded funds for US investors and several others abroad over the 12 months through June 2025. All have low fees in their respective categories, and the actively managed strategies align with Vanguard’s philosophy. They are relatively easy to understand and are conservatively managed.

Vanguard has another opportunity to prove that clients are still its priority. On the surface, its endeavor into the high-fee deal-making world of private assets alongside Wellington and Blackstone looks like a cultural mismatch. So far, the collaboration hasn’t produced anything that’s concerning.

The ETF’s track record is short, but its mutual fund counterpart has delivered compelling absolute and risk-adjusted results.

From January 2024 (the ETF’s first full month) through November 2025, the ETF’s 5.8% annualized gain beat both the intermediate core-plus bond Morningstar Category median’s and the Bloomberg US Universal Index’s 5.3% and 5.0% return, respectively. Over a longer period, the mutual fund has also produced strong outcomes. From November 2021 (the mutual fund’s first full month) through November 2025, the Admiral shares’ 0.9% annualized gain beat both the category peer median and index by 38 and 48 basis points, respectively. The strategy’s information ratio (a measure of excess return over excess standard deviation versus the benchmark) also ranked near the category’s top quartile over that period.

The value-driven approach, combined with robust risk management, has been particularly beneficial during periods of market stress. For instance, during March 2023’s banking crisis, the managers increased corporate bond exposures as relative value became more attractive. This tactical shift contributed to the fund’s 2.4% gain, outpacing more than three fifths of peers. Over the full year, the fund’s 6.8% return outpaced both peer median’s and index’s 6.4% and 6.2% gain, respectively.

The managers typically keep duration in line with the index, though modest deviations can still influence relative results compared with peers. When long-term yields rose in 2022, the mutual fund’s slightly longer duration relative to the typical peer weighed on first-quarter performance. As duration shortened later in the year, relative results improved; the fund’s 12.6% decline that year was marginally less severe than that of the typical peer’s 13.3% drop.

Vanguard Core-Plus Bond ETF's Prospectus Adjusted Expense Ratio is 0.2% per year. It places it in the cheapest quintile of the Morningstar US Fund Intermediate Core-Plus Bond Category, where the median fee is 0.62% per year. This cost positioning translates into a Medalist Rating Price Score of 2.41, which reflects its relative price positioning within the category. The Price Score ranges from -2.50 (most expensive) to +2.50 (cheapest), with higher scores indicating better cost competitiveness.