Vanguard USD High Yield Corporate Bond UCITS ETF: two share classes listed on the LSE

The fund invests in US dollar-denominated corporate bonds with a rating below investment grade and tracks the Bloomberg US High Yield $250MM 2% Issuer Capped Index. Ongoing charges are 0.15% for both classes available on the Italian market: one for distribution and one for accumulation.

According to Vanguard, the listing expands the company’s range of bond ETFs and offers European investors diversified, low-cost access to the US dollar-denominated high-yield sector. In addition to the London Stock Exchange, the ETF is listed on Borsa Italiana, Deutsche Börse, Euronext Amsterdam and SIX Swiss Exchange.

The two share classes on ETFplus

Share class ISIN Trading code Income policy Ongoing charges
USD (Dist) IE0007XDORZ1 VUYD Distribution 0.15%
USD (Acc) IE000TF6B304 VUYA Accumulation 0.15%

The distribution class pays out income monthly, whilst the accumulation class reinvests the income within the fund. Both classes are denominated in US dollars.

The issuer is Vanguard Funds plc, authorised by the Central Bank of Ireland as a UCITS. The management company is Vanguard Group (Ireland) Limited.

Where it is listed and in which currencies

The trading venues and currencies specified by Vanguard are the same for both classes:

London Stock Exchange: US dollar

Deutsche Börse: euro

Borsa Italiana: euro

SIX Swiss Exchange: US dollar and Swiss franc

Euronext Amsterdam: euro

The benchmark index

The fund tracks the Bloomberg US High Yield $250MM 2% Issuer Capped Index, a basket comprising US dollar-denominated corporate bonds with a rating below investment grade. As the name suggests, the index applies a 2 per cent cap on the weighting of any single issuer, thereby limiting concentration on groups with the highest outstanding debt.

The target segment comprises bonds issued by companies with lower credit ratings. These issues tend to offer higher coupon rates than investment-grade securities, but also carry a higher risk of default.

Costs and comparison

Ongoing charges amount to 0.15 per cent per annum for both classes. This figure includes management fees and costs associated with services such as administration, auditing, custody, legal advice and registration, as well as other expenses incurred in connection with the funds.

According to Vanguard, thanks to this cost level, the fund is the Europe-domiciled fund with the lowest expenses in the Morningstar USD High Yield Bond category, based on its benchmark group. The figure is as at 8 October 2026.

Claire Aley, Head of Product and PRD Europe at Vanguard, said: “The US dollar high-yield market represents the largest segment of the global high-yield corporate bond market and is an important component of a comprehensive bond offering.”

Aley added: “With the launch of the Vanguard USD High Yield Corporate Bond UCITS ETF, we aim to offer investors diversified, low-cost access to an income-generating market, at a time when many are seeking to enhance their portfolio’s return potential, manage duration risk and broaden diversification. The ETF draws on Vanguard’s proven track record in fixed income and further strengthens our range of scalable investment solutions, which can play a significant role at different stages of the market cycle.”

Vanguard’s UCITS range in 2026

The new bond ETF follows on from nine UCITS equity ETFs launched by Vanguard during 2026. The company also highlights the fee reductions implemented over the past 24 months. According to Vanguard’s calculations, as at 21 July 2026, these measures have generated estimated savings of over $80 million for investors.

In the United States, on 4 June 2026, Vanguard launched the Vanguard U.S. High-Yield Corporate Bond Index ETF (ticker VCHY), an index-tracking ETF covering the same segment of high-yield corporate bonds denominated in US dollars, with a 2 per cent limit per issuer.

Founded in 1975, Vanguard manages $13,300 billion globally on behalf of investors, according to the company’s figures as at 31 July 2026.

Risks to consider

Bonds rated below investment grade carry a higher credit risk than higher-quality securities. During periods of market stress, the prices of these issues may experience significant fluctuations.

The two listed share classes are denominated in US dollars, and Vanguard has not specified any share classes with currency hedging. For an investor holding euros, therefore, the investment return also depends on the performance of the euro/dollar exchange rate.

Conclusions

With the Vanguard USD High Yield Corporate Bond UCITS ETF, Vanguard adds exposure to US dollar-denominated high-yield corporate bonds to its UCITS range.

The launch follows nine equity ETFs introduced in 2026 and a series of fee reductions. Listing on five European stock exchanges allows the fund to be traded in euros, US dollars and Swiss francs.