Vanguard Renews Cost Competition in ETF Market with

Introduction of Europe Pacific ETF  VALLEY FORGE, Pa.--(BUSINESS WIRE)--July 25, 2007 Vanguard is continuing to lower costs for exchange-traded fund (ETF) investors with the introduction of Vanguard(R) Europe Pacific ETF (ticker symbol, VEA), which begins trading tomorrow morning on the American Stock Exchange. With an expense ratio of 0.15% and 1,134 holdings, the new Vanguard ETF(TM) is the most broadly diversified, lowest-cost ETF available today that seeks to track the widely followed MSCI EAFE Index.*  "Vanguard has long been recognized as a low-cost leader among mutual fund investors, and we're bringing that same cost advantage to ETF investors," said Vanguard Chief Investment Officer Gus Sauter.  Vanguard's ETF cash flow is up nearly 40% in 2007, and the firm's ETF assets have roughly doubled over the past year to $31 billion. Vanguard attributes this strong growth to the company's considerable cost advantage. The average expense ratio of Vanguard ETFs(TM) is 0.18%, less than half the industry average of 0.41% (Source: Lipper Inc.).  Vanguard Europe Pacific ETF rounds out Vanguard's broad-market ETFs, which cover the domestic equity and bond markets, as well as developed and emerging international markets.                                                         Expense Number of     Vanguard Fund                Markets              Ratio  Holdings ---------------------------------------------------------------------- Europe Pacific ETF    Developed European and Pacific  (VEA)                         stock markets           0.15%     1,134 ---------------------------------------------------------------------- Total Stock Market                 U.S.  ETF (VTI)                     stock market            0.07%     3,686 ---------------------------------------------------------------------- Total Bond Market ETF              U.S.  (BND)                         bond market             0.11%     2,923 ---------------------------------------------------------------------- FTSE All-World ex-US  Developed and Emerging global  ETF (VEU)                     stock markets           0.25%     2,159 ----------------------------------------------------------------------  Vanguard Europe Pacific ETF seeks to track the performance of the MSCI EAFE Index, a benchmark of stocks from 21 developed foreign countries. The new offering is a share class of the Vanguard Tax-Managed International Fund, which was introduced in 1999 and has $2.3 billion in total net assets.  Vanguard's family of ETFs now includes 33 stock and bond offerings. The firm has introduced six ETFs in 2007, including four bond index ETFs with class-leading expense ratios of 0.11%. Vanguard recently filed a registration statement with the SEC for Vanguard Extended Duration Treasury Index Fund, which will offer an ETF share class and is expected to launch later this year. The firm has also filed for exemptive relief to offer four active bond ETFs. These ETFs will be share classes of the following funds:  --  Vanguard Inflation-Protected Securities Fund  --  Vanguard Short-Term Treasury Fund  --  Vanguard Intermediate-Term Treasury Fund  --  Vanguard Long-Term Treasury Fund.  MSCI Barra ( develops and maintains equity, hedge fund and REIT indices that serve as benchmarks for an estimated USD 3 trillion on a worldwide basis. MSCI Barra's risk models and analytics products help the world's largest investors analyze, measure and manage portfolio and firm-wide investment risk. MSCI Barra is headquartered in New York, with research and commercial offices around the world. Morgan Stanley, a global financial services firm and a market leader in securities, asset management, and credit services, is the majority shareholder of MSCI Barra, and Capital Group International, Inc. is the minority shareholder.  The Vanguard Group, headquartered in Valley Forge, Pennsylvania, is one of the nation's largest mutual fund firms and a leading provider of company-sponsored retirement plan services. Vanguard manages more than $1.2 trillion in U.S. mutual fund assets, including more than $325 billion in employer-sponsored retirement plans. Vanguard offers more than 140 funds to U.S. investors and more than 40 additional funds in foreign markets.  *Source: Bloomberg, June 21, 2007. The expense ratio for Vanguard Europe Pacific ETF is 0.15%, compared with that of the competitor ETF, at 0.35%. The Europe Pacific ETF has nearly 40% more holdings than the competitor ETF--1,134 holdings versus 824 (Source: FactSet, June 30, 2007).  All asset figures are as of June 30, 2007, unless otherwise noted.  Diversification does not ensure a profit or protect against a loss in a declining market.  Vanguard ETF Shares can be bought and sold only through a broker (who will charge a commission) and cannot be redeemed with the issuing fund. The market price of Vanguard ETF Shares may be more or less than net asset value.  All funds and ETF products are subject to stock market risk, which may result in the loss of principal. International funds and ETF products involve additional risks, including currency fluctuations and the potential for adverse developments in specific countries or regions. Stocks of companies in emerging markets are generally more risky than stocks of companies in developed countries.  Investments in bond funds and ETFs are subject to interest rate, credit, and inflation risk.  A registration statement relating to the Vanguard ETF shares has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This communication shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, these securities in any state in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state.  Copies of the final Vanguard ETF prospectuses and product brochure, when available, as well as prospectuses for all other Vanguard funds can be obtained by visiting, or calling 800-662-7447. Investment objectives, risks, charges, expenses, and other important information about a fund are contained in these documents; read and consider them carefully before investing. Please note that a preliminary prospectus is subject to change.  The funds or securities referred to herein are not sponsored, endorsed, or promoted by MSCI, and MSCI bears no liability with respect to any such funds or securities. For any such funds or securities, the prospectus or the Statement of Additional Information contains a more detailed description of the limited relationship MSCI has with The Vanguard Group and any related funds.  "FTSE(R)" is a trademark jointly owned by the London Stock Exchange plc and The Financial Times Limited and is used by FTSE International Limited under license. "All World" is a trademark of FTSE International Limited. The FTSE All World ex US Index is calculated by FTSE International Limited. FTSE International Limited does not sponsor, endorse, or promote the fund; is not in any way connected to it; and does not accept any liability in relation to its issue, operation, and trading.  Vanguard, Vanguard ETFs, and the ship logo are trademarks of The Vanguard Group, Inc. All other marks are the exclusive property of their respective owners.  U.S. Pat. No. 6,879,964 B2.  Vanguard Marketing Corporation, Distributor.  CONTACT: The Vanguard Group, Inc. John S. Woerth, 610-669-6224 or Rebecca Cohen, 610-503-2273 or Amy Chain, 610-669-2149 
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