VBTLX and VTIAX benchmark question

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elgaeb051
Posts: 333
Joined: Sun Feb 21, 2010 11:23 am

VBTLX and VTIAX benchmark question

Post by elgaeb051 » Fri Jan 13, 2012 5:09 pm

Two benchmark questions:

Should I infer that the Vanguard Total Bond Market Index (VBTLX) fund benchmark as stated below:

Barclays Capital U.S. Aggregate Bond Index through December 31, 2009; Barclays Capital U.S. Aggregate Float Adjusted Index thereafter.

Means that if you have X amount invested prior to 12/31/09 then Vanguard continues to use the Barclays Capital US Aggregarte Bond Index AND
that if you invested another Y amount after 12/31/09 then Vanguard uses the Barclays Capital US Aggregate Float Adjusted Index or ???? what does this mean or does this indicate they use some kind of a composite benchmark?

2. Regarding the Vanguard Total International Stock Index Fund (VTIAX) benchmark.

The benchmark on the fund reads: "Spl Total International Stock Idx** " followed by:

**Consists of the Total International Composite Index through August 31, 2006; the MSCI EAFE + Emerging Markets Index through December 15, 2010; and the MSCI ACWI ex USA IMI Index thereafter. Returns for the MSCI indexes are adjusted for withholding taxes applicable to Luxembourg holding companies.

What does it mean?

Thanks for any information you can share.

livesoft
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Re: VBTLX and VTIAX benchmark question

Post by livesoft » Fri Jan 13, 2012 6:42 pm

To me it means that you are delving way too much into esoteric things that do not matter one iota to anything you need to worry about.

What are you going to do with this information anyways? Or how will knowing the answer change your life?
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mas
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Re: VBTLX and VTIAX benchmark question

Post by mas » Fri Jan 13, 2012 7:50 pm

elgaeb051 wrote:What does it mean?
It means that those funds changed their benchmark in the past (which is *almost* totally irrelevant to you now).

Prior to 12/31/09, VBTLX attempted to match the composition and returns from one index, and now it attempts to match another index. If you invest now, only the current index is relevant. Similar situation with VTIAX.

The reason Vanguard mentions it, is that they have a chart (or table) comparing the performance of the fund with its benchmark. The purpose of this is to see how well their investment managers were able to match the benchmark they were using (tracking error). Vanguard cannot change the historical performance of their funds, so the construct a spliced index to show what the historical benchmark was.

elgaeb051
Posts: 333
Joined: Sun Feb 21, 2010 11:23 am

Re: VBTLX and VTIAX benchmark question

Post by elgaeb051 » Sun Jan 15, 2012 2:43 pm

Mas, I appreciated your explanation. Thanks.

YDNAL
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Re: VBTLX and VTIAX benchmark question

Post by YDNAL » Sun Jan 15, 2012 3:46 pm

elgaeb051 wrote:Two benchmark questions:

Should I infer that the Vanguard Total Bond Market Index (VBTLX) fund benchmark as stated below:

Barclays Capital U.S. Aggregate Bond Index through December 31, 2009; Barclays Capital U.S. Aggregate Float Adjusted Index thereafter.

Means that if you have X amount invested prior to 12/31/09 then Vanguard continues to use the Barclays Capital US Aggregarte Bond Index AND that if you invested another Y amount after 12/31/09 then Vanguard uses the Barclays Capital US Aggregate Float Adjusted Index or ???? what does this mean or does this indicate they use some kind of a composite benchmark?
No!
  • All Fund assets prior to 2010 were invested per Barclays Aggregate Index. Starting in 2010, all Fund assets are invested per Float Adj Index - a new Index created in July 2009.
    http://www.barcap.com/About+Barclays+Ca ... sted+Index
  • Vanguard discontinues use of the old Index and lets investors know that it changed benchmarks for its Fund(s).
elgaeb051 wrote:2. Regarding the Vanguard Total International Stock Index Fund (VTIAX) benchmark.

The benchmark on the fund reads: "Spl Total International Stock Idx** " followed by:

**Consists of the Total International Composite Index through August 31, 2006; the MSCI EAFE + Emerging Markets Index through December 15, 2010; and the MSCI ACWI ex USA IMI Index thereafter. Returns for the MSCI indexes are adjusted for withholding taxes applicable to Luxembourg holding companies.

What does it mean?
It means the same thing as above.
Landy | Be yourself, everyone else is already taken -- Oscar Wilde

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