The Vanguard Commodity Strategy Fund seeks to provide extensive exposure to commodities and an appreciation of capital. The Fund seeks to provide broad exposure to commodities and an appreciation of capital. The Fund advisor uses an active investment management approach to invest the Fund's assets in commodity-related investments, which are backed by a portfolio of inflation-linked investments and other fixed-income securities. This communication will not constitute an offer to sell or a request for an offer to buy, nor will there be any sale of Vanguard Commodity Strategy Fund in any state where such offer, request or sale was illegal prior to registration or qualification under the securities laws of that state.
The information contained in the Vanguard Commodity Strategy Fund's preliminary prospectus is subject to completion or modification. The Vanguard Commodity Strategy Fund will seek to surpass Bloomberg's total commodity return index by investing in commodity derivative investments, such as commodity futures and swaps, guaranteed by a combination of Treasury bills (Treasury bills) and short-term TIPS, which add an additional layer of protection against inflation. Vanguard's quantitative equity and fixed income groups will act as advisors to the fund and will bring their extensive experience and knowledge to the fund's management. Due to the volatility and vagaries of commodity trading (for example, soybeans and other agricultural products, precious metals, oil and gas and related derivatives), the average price of a commodity fund is around 0.70 percent per year, according to Bloomberg analyst Eric Balchunas.
VALLEY FORGE, PA (April 4, 2017) Vanguard today filed a preliminary registration statement with the Securities and Exchange Commission of the Vanguard Commodity Strategy Fund. The Vanguard Commodity Strategy Fund will be actively managed, not just an index fund, and is expected to launch in June. Wall Street has witnessed an accumulation of commodity-linked mutual funds and exchange-traded funds in recent years, in part due to the huge fall in stocks. A registration statement regarding the Vanguard Commodity Strategy Fund has been filed with the Securities and Exchange Commission, but it has not yet entered into force.
Vanguard Commodity Strategy Fund shares cannot be sold or offers to buy can be accepted before the registration statement takes effect. In a press release, Vanguard said that the fund will offer investors greater portfolio diversification, along with a possible hedge against inflation risk, by investing mainly in commodities and Treasury securities protected against inflation (TIPS). In addition, commodities can offer diversification benefits to a balanced portfolio, as their returns tend to move independently of those of stocks and bonds. Commodity investments may be attractive to investors seeking to protect themselves against inflation, especially since inflationary crises have historically been volatile and difficult to predict.
As one of the largest providers of actively managed low-cost funds in the world, Vanguard has significantly developed the company's active capabilities and product list over the past three years.