The Markets January 28, 2011

Vanguard Launches Total International Stock ETF

Vanguard is bringing the Vanguard Total International Stock ETF (VXUS) to market, which will track the MSCI All Country World ex USA Investable Market Index.
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The Total International Stock ETF will have an estimated expense ratio of 0.20%.  It is a separate share class of Vanguard Total International Stock Index Fund and is currently Vanguard’s second-largest international index fund, with $51.4 billion in net assets, according to a news release.   

The Total International Stock ETF’s target index covers 98% of the world’s non-U.S. markets, including the European, Pacific, and emerging market regions, as well as Canada. The index includes more than 6,000 issues encompassing stocks of large-, mid-, and small-capitalization companies in 44 countries.  

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“Vanguard Total International Stock ETF (VXUS) is a new way to invest in an established fund that offers broad international diversification with an extremely modest price tag,” said Vanguard’s Chief Investment Officer Gus Sauter.
Products January 28, 2011

GuidedChoice Introduces Alternative to "4% rule"

GuidedChoice has launched GuidedSpending 2.0, a major revision of its retirement income advice program.
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GuidedSpending was designed to replace the ‘4% rule’ long used by financial planners. The idea behind the advice program is that the amount of money one should take from their retirement savings each year of retirement should be made on an individual basis; 4% a year is not the answer for everyone. GuidedSpending takes a more flexible and therefore, more effective, approach to retirement, the company said. 

It will be offered to all participants in a plan, rather than just executives.  

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“Like many other rules of thumb, the 4%-a-year approach to withdrawing retirement income is easy to criticize as being at best inefficient, and at worst downright dangerous. It’s certainly not grounded in any actual economic analysis,” said Chief Architect Harry M. Markowitz. “Our research has shown that a fixed annual drawdown is not only unworkable, but it doesn’t reflect the reality of people’s income and spending patterns, either.” 

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