The Vanguard Group closed its high-yield corporate bond fund to most new investors to curtail a flood of money from investors seeking the relatively high returns of its non-investment-grade bonds.
In the last six months, investors had poured $2 billion into the fund, bringing its total assets to $16.9 billion, Vanguard said.
"In this prolonged low-rate environment, we continue to see investors turn to high-yielding alternatives — including money market fund holders moving to bond funds, U.S. Treasury bond fund holders moving to high-yield corporate funds, and bond fund holders moving to dividend-paying stock funds. And we’ve cautioned investors accordingly about reaching for yield," Vanguard CEO Bill McNabb said in a news release.
