Vanguard Shifts 2 ETFs To FTSE Indexes

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March 27, 2013
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Developed-country ETFs ‘VGK’ and ‘VPL’ now track FTSE indexes.

Vanguard, the No. 3 U.S. exchange-traded fund sponsor by assets under management, today is shifting indexes on two developed-country ETFs to FTSE benchmarks from MSCI Inc. in the latest phase of implementation of its big index-change announcement on Oct. 2.

The Vanguard MSCI Europe ETF (NYSEArca: VGK) will now track the FTSE Developed Europe Index instead of the MSCI Europe Index. The fund’s name is being changed to the Vanguard FTSE Europe ETF, the company said today.

The Vanguard MSCI Pacific ETF (NYSEArca: VPL) will now track the FTSE Developed Asia Pacific Index, rather than the MSCI Pacific Index it used to track. The fund’s name has been changed to the Vanguard FTSE Pacific ETF.

Both tickers will remain unchanged, as well as the funds’ expense ratios, currently pegged at 0.12 percent, although Vanguard said in a release that it expects the transition to FTSE indexes to result in lower costs overtime.

Vanguard first announced last fall that it was dropping MSCI indexes on 22 funds, including the two above, for FTSE and University of Chicago-linked CRSP benchmarks, in a move designed to save investors money over the long term.

Of the 22 funds undergoing index changes, 16 are U.S.-focused portfolios and are shifting to benchmarks from CRSP. The other six, like the two above, are internationally focused portfolios that will be transitioning to benchmarks created by FTSE. Four U.S.-focused ETFs already had their indexes changed back in January to CRSP benchmarks.

Despite the transitioning benchmarks, Vanguard has still seen solid asset inflows into these 22 funds, which have attracted a combined $20 billion so far this year, the company said.

Investors have poured a net of $643 million into VGK since January 1, pushing the ETF above the $10 billion-in-assets mark. VPL, meanwhile, has seen net inflows of $185 million in the same period, and now has about $4.4 billion in total assets, according to data compiled by IndexUniverse.


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