Products
New Vanguard Fund Goes Global
Vanguard has filed a registration statement with the Securities and Exchange Commission for the firm’s first passively managed global index fund.
Reported by Nevin E. Adams
The Vanguard Global Stock Index Fund will offer three share classes – Investor Shares, Institutional Shares, and ETF Shares – that are expected to be available in the second quarter of 2008.
The new fund will seek to track the performance of the FTSE All-World Index, a float-adjusted, market-capitalization-weighted index designed to measure the equity market performance of large- and mid-capitalization stocks worldwide. The fund will invest in a broadly diversified sampling of securities from the target benchmark, which comprises more than 2,800 large- and mid-cap stocks of companies in 48 countries, according to Vanguard. Approximately 55% of the index is made up of stocks from outside the United States.
The fund’s ETF Shares have an estimated expense ratio of 0.25%. The fund’s Investor Shares, which will require a $3,000 minimum initial investment, have an estimated expense ratio of 0.45%, and the Institutional Shares, with a $5 million minimum initial investment requirement, have an estimated expense ratio of 0.20%.
To offset the transaction costs associated with global investing and to protect the interests of long-term shareholders, the fund will assess a 0.15% purchase fee on all non-ETF share purchases and a 2% redemption fee on all non-ETF assets redeemed within two months of purchase, according to the announcement.
Three Vanguard funds currently track FTSE benchmarks:
- Vanguard FTSE Social Index Fund,
- Vanguard High Dividend Yield Index Fund, and
- Vanguard FTSE All-World ex-US Index Fund.