Vanguard Changing Indexes

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White Coat Investor
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Vanguard Changing Indexes

Post by White Coat Investor » Tue Oct 02, 2012 1:23 pm

Just got this in the email box:

I'm writing to let you know about some important changes coming to 22 Vanguard stock and balanced index funds. These changes have the potential to save shareholders a significant amount of money.

Six international funds are switching their benchmark indexes from MSCI benchmarks to FTSE benchmarks, while 16 U.S. funds are switching their benchmark indexes from MSCI benchmarks to new benchmarks developed by the University of Chicago's Center for Research in Security Prices (CRSP). The transition will be staggered and completed over a number of months and is not expected to result in any capital gains distributions.

By negotiating favorable licensing agreements with these benchmark providers, Vanguard expects to pass on significant savings over time in the form of lower expense ratios for the funds.

The benchmark changes will affect all share classes of the 22 funds. While these changes may cause some of the specific assets held by the funds to change over time, the funds' investment objectives will remain the same—so your funds can continue to play the role in your portfolio you've selected them for.

To learn more, please see vanguard.com/newbenchmarks.


What do you guys think? I'm familiar with FTSE but not so much the CRSP indices.
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sunspotzsz
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Re: Vanguard Changing Indexes

Post by sunspotzsz » Tue Oct 02, 2012 1:25 pm

great news for vanguard customers. we will see further price reduction.

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AzRunner
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Re: Vanguard Changing Indexes

Post by AzRunner » Tue Oct 02, 2012 1:32 pm

ChicagoBooth has been a Finance leader and their CRSP indices, coming from the University of Chicago's Center for Research in Security Prices should be sound, although the proof is in the pudding. It's good that Vanguard is continuing to look to lower costs to their investors.

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Re: Vanguard Changing Indexes

Post by Jerry_lee » Tue Oct 02, 2012 1:42 pm

Does anyone see the irony in Vanguard switching to CRSP indexes? CRSP being the Center for Research in Security Prices, an extension of the University of Chicago Business School named after David Booth? Booth of course gave away much of his wealth to UoC, which no doubt is used for research efforts, some of which I'm sure have gone into the development of these indexes.

In a way, DFA is helping Vanguard with their indexes, no?

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Re: Vanguard Changing Indexes

Post by YDNAL » Tue Oct 02, 2012 1:42 pm

EmergDoc wrote:Just got this in the email box:

I'm writing to let you know about some important changes coming to 22 Vanguard stock and balanced index funds. These changes have the potential to save shareholders a significant amount of money.......

What do you guys think? I'm familiar with FTSE but not so much the CRSP indices.

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Re: Vanguard Changing Indexes

Post by LadyGeek » Tue Oct 02, 2012 4:10 pm

Actually, this is the 4th one... :)

Further comments should be posted here: Shifts in VG Tracking Indexes Announced

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