Vanguard to Put Out Small Cap International Index

The Vanguard Group announced its intention to offer its first international small-cap index fund.

A Vanguard news release said the Vanguard FTSE All-World ex-US Small-Cap Index Fund will offer three share classes (Investor, Institutional, and ETF) and is expected to be available in the first quarter of 2009.

The target benchmark for the fund is the FTSE Global Small Cap ex US Index, a market-capitalization-weighted index of stocks traded on markets outside the United States, the investment firm said. The fund will invest in a broadly diversified sampling of securities from the benchmark, which comprises more than 3,300 stocks of companies in 47 countries.

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The fund’s ETF Shares have an estimated expense ratio of 0.38%. The Investor Shares, which will require a $3,000 minimum initial investment, have an estimated expense ratio of 0.60%, while the Institutional Shares have an estimated expense ratio of 0.35% and a $5 million minimum initial investment requirement.

To help defray the transaction costs associated with investing in small-cap international stocks, the fund will assess a 0.75% fee on purchases and redemptions of the Investor and Institutional Shares, Vanguard said.

What’s a Subprime Mortgage?

Participants might know less than you think about personal finance and the economy, a poll of Americans suggests.

It may or may not come as a surprise that a survey from the Center for Economic and Entrepreneurial Literacy (CEEL) found that the majority of Americans are unable to answer some of the most basic questions about borrowing, interest rates, financial terminology—and even math. The CEEL said in a release the survey “underscores the need for increased education on personal finance and economic issues.’

Some highlights from the survey include:

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  • 54% of respondents could not identify what a subprime mortgage was.
  • 56% of respondents could not identify FICO score as the most important factor in getting a loan.
  • 65% of respondents could not identify what would remain if you subtracted 25% from 8. One in three respondents could not identify what 1% of 50,000 was.
  • 75% did not know that when in need of short-term emergency cash, bouncing a check costs more than wire transfers, credit card advances, and short-term payday loans.
  • Half of respondents have overdrafted their checking account at one time, while a third of respondents have paid a bill late in the past year.
  • 35% of respondents admitted to not having a family or personal budget that would allow them to conceivably eliminate their credit card debt by the end of 2009.

“It is clear that we need to increase personal finance education at all ages so we have better informed employees, borrowers, and voters,’ said James Bowers, managing director for CEEL, in the release.

The telephone survey was conducted by Opinion Research Corporation among 1,004 adults in private households in the U.S.

More information about CEEL is availalbe at www.econ4u.org.

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