VALLEY FORGE, Pa.--(BUSINESS WIRE)--Vanguard announced that two of its largest funds, Vanguard Total International Stock Index Fund and Vanguard Total Stock Market Index Fund, representing $343 billion in aggregate assets, will begin seeking to track indexes of FTSE and the University of Chicago’s Center for Research in Security Prices (CRSP) on June 3, 2013.
The two funds previously tracked MSCI indexes.
|
Fund |
New Index | Former Index | ||||
| Vanguard Total International Stock Index Fund | FTSE Global All Cap ex US Index | MSCI All Country World ex USA Investable Market Index | ||||
| Vanguard Total Stock Market Index Fund | CRSP US Total Market Index | MSCI US Broad Market Index | ||||
The $248 billion Total Stock Market Index Fund and the $95 billion Total International Stock Index Fund—two of the largest “core” broad-market funds in the United States, according to Morningstar—serve as underlying holdings for 21 Vanguard funds of funds, including the Vanguard Target Retirement Funds, LifeStrategy® Funds, and Managed Payout Funds. As a result, the MSCI components of the composite benchmarks for the funds of funds will be replaced by the FTSE Global All Cap ex US Index and CRSP US Total Market Index.
Vanguard recently disclosed expense ratio reductions for all share classes of the Total Stock Market Index Fund. For example, its ETF share class, VTI, reported a 2012 expense ratio of 0.05%, a decline of 1 basis point from 2011. The fund’s current expense ratios will not be immediately affected by the benchmark transition, although Vanguard expects that the licensing agreements with FTSE and CRSP will lead to lower costs over time for all of the funds involved in the benchmark changes.
Investor interest in Vanguard’s index funds has remained strong since its October 2, 2012, announcement of new target benchmarks for 22 funds. Cash flow of more than $45 billion into those 22 index funds since that date represents half of Vanguard’s total cash flow over the same time period.
For more information about Vanguard’s benchmark changes, go to Index Innovation at Vanguard.
About Vanguard
Vanguard, headquartered in Valley Forge, Pennsylvania, is one of the world’s largest investment management companies and a leading provider of company-sponsored retirement plan services. Vanguard manages $2.2 trillion in U.S. mutual fund assets, including more than $285 billion in ETF assets. The firm offers more than 180 funds to U.S. investors and more than 70 additional funds in non-U.S. markets. For more information, visit vanguard.com.
About FTSE Group
FTSE Group (FTSE) is a world leader in the provision of global index and analytical solutions.
FTSE calculates indexes across a wide range of asset classes, on both a standard and custom basis. FTSE indexes are used extensively by investors worldwide for investment analysis, performance measurement, asset allocation, portfolio hedging and the creation of a wide range of index derivatives, funds, ETFs, and other structured products. For more information, visit ftse.com.
About The Center for Research in Security Prices (CRSP)
CRSP (Center for Research in Security Prices) is one of 11 research centers at the University of Chicago Booth School of Business. The research organization pioneered the development of U.S. stock market data in 1960 that are widely used in academic and investment research. The CRSP Indexes capture broad U.S. equity market coverage and include securities traded on the NYSE, AMEX, NASDAQ and ARCA markets. Nearly 4,000 constituents across mega, large, mid, small and micro capitalizations, representing 100% of the U.S. investable equity market (or 99.5% of cumulative full market capitalization of U.S. equity), comprise the market-cap indexes. CRSP’s portfolio of historical databases for common stocks, mutual funds, Treasuries, REITs, and research indexes is relied on by more than 435 leading academic institutions in 31 countries. It is also widely used for research in the commercial and governmental sectors. For more information, visit crsp.com.
Asset figures are as of April 30, 2013.
For more information on Vanguard funds, visit vanguard.com, or call 800-662-7447 to obtain a prospectus. Visit our website, call 800-662-7447, or contact your broker to obtain a prospectus for Vanguard ETF Shares. Investment objectives, risks, charges, expenses, and other important information are contained in the prospectus; read and consider it carefully before investing.
Vanguard ETF Shares are not redeemable with the issuing fund other than in Creation Unit aggregations. Instead, investors must buy or sell Vanguard ETF Shares in the secondary market with the assistance of a stockbroker. In doing so, the investor may incur brokerage commissions and may pay more than net asset value when buying and receive less than net asset value when selling.
Mutual funds and ETFs are subject to risks, including possible loss of principal. Foreign investing involves additional risks including currency fluctuations and the potential for adverse development in specific countries or regions.
Prices of mid- and small-cap stocks often fluctuate more than those of large-company stocks.
U.S. Pat. No. 6,879,964 B2; 7,337,138; 7,720,749; 7,925,573; 8,090,646
Vanguard Marketing Corporation, Distributor.
© 2013 The Vanguard Group, Inc. All rights reserved.
