The Vanguard Total Bond Market ETF is an exchange traded fund comprising a group of diversified assets. Created on 3 April 2007, the fund is administered by the Vanguard Fixed Income Group, which has its headquarters located in Valley Forge, Pennsylvania. This ETF tracks the market performance of the Bloomberg Barclays US Float Adjusted Index, which is a rules-based index investing in domestic investment-grade bonds. Bonds in the index are weighted by market value, making the portfolio lean towards the largest and most liquid assets. The value of bonds held by the Federal Reserve is excluded from the weighting calculations with the float adjustment. This means that the fund has less exposure to agency-backed mortgage securities.
The aim of this ETF is to offer investors access to total market coverage in just one bond, with exposure to over 10,000 individual bonds. These are largely US-based but also includes some international bonds. The ETF has a low fee and a conservative portfolio for limited risk.