Vanguard Emerging Markets Fund and ETF to Begin Transition to New FTSE Index
VALLEY FORGE, Pa. -- January 9, 2013
In early October, Vanguard announced that Vanguard Emerging Markets Stock
Index Fund, including Vanguard MSCI Emerging Markets ETF, would begin tracking
the FTSE Emerging Transition Index in 2013 as an interim step toward
ultimately tracking the FTSE Emerging Index. Effective with the opening of
trading at 9:30 a.m. Eastern time on January 10, 2013, the fund and ETF will
begin tracking the transition index, which will be available at
In connection with the index change, the name of the fund’s ETF share class
will change from Vanguard MSCI Emerging Markets ETF to Vanguard FTSE Emerging
Markets ETF. The ETF’s ticker symbol (VWO) will not change.
Emerging Markets Stock Index Fund
The Emerging Markets Stock Index Fund has $76 billion in assets, making it the
largest fund in its category (source: Bloomberg, 12/31/12). VWO, a share class
of the fund, has $60 billion in assets and was the top-selling emerging
markets ETF in the United States in 2012 (source: IndexUniverse).
FTSE Emerging Index
The FTSE Emerging Index is a market capitalization-weighted index that
provides comprehensive coverage of emerging markets. The index was developed
by FTSE, a leading provider of indexes used by asset managers and investors
worldwide. Vanguard has entered into long-term agreements with FTSE that are
expected to provide cost certainty and savings over time for investors.
The index offers comprehensive and diversified exposure to 22 emerging market
countries, including Brazil, Russia, India, and China. It is generally
comparable to the fund's prior benchmark. The most notable difference between
FTSE and MSCI’s international indexes is that FTSE classifies South Korea as a
developed market, making it necessary for the Emerging Markets Stock Index
Fund to gradually sell down its South Korean exposure and invest the proceeds
in the other markets in the index.
To minimize market impact during the transition, the Emerging Markets Stock
Index Fund will follow the FTSE Emerging Transition Index for approximately
six months. This extended transition will reduce the costs associated with
trading large amounts of securities in a short period. To provide transparency
to shareholders during the transition, FTSE will supply weekly updates of the
transition index’s composition at www.ftse.com/vanguard.
Vanguard, headquartered in Valley Forge, Pennsylvania, is one of the world’s
largest investment management companies and a leading provider of
company-sponsored retirement plan services. Vanguard manages nearly $2
trillion in U.S. mutual fund assets, including more than $240 billion in ETF
assets (as of 12/31/12). The firm offers more than 170 funds to U.S. investors
and more than 70 additional funds in non-U.S. markets.
About FTSE Group
FTSE Group (FTSE) is a world leader in the provision of global index and
analytical solutions. FTSE calculates indexes across a wide range of asset
classes, on both a standard and custom basis. FTSE indexes are used
extensively by investors worldwide for investment analysis, performance
measurement, asset allocation, portfolio hedging and the creation of a wide
range of index derivatives, funds, ETFs, and other structured products. For
more information, visit www.ftse.com.
All asset figures are as of December 31, 2012.
For more information on Vanguard funds, visit vanguard.com, or call
800-662-7447 to obtain a prospectus. Visit our website, call 800-662-7447, or
contact your broker to obtain a prospectus for Vanguard ETF Shares. Investment
objectives, risks, charges, expenses, and other important information are
contained in the prospectus; read and consider it carefully before investing.
Vanguard ETF Shares are not redeemable with the issuing Fund other than in
Creation Unit aggregations. Instead, investors must buy or sell Vanguard ETF
Shares in the secondary market with the assistance of a stockbroker. In doing
so, the investor may incur brokerage commissions and may pay more than net
asset value when buying and receive less than net asset value when selling.
Mutual funds and ETFs are subject to risks, including possible loss of
principal. Foreign investing involves additional risks including currency
fluctuations and political uncertainty. Stocks of companies in emerging
markets are generally more risky than stocks of companies in developed
countries. Diversification does not ensure a profit or protect against a loss
in a declining market.
All rights in the FTSE Emerging Index (the “Index”) vest in FTSE International
Limited (“FTSE”). “FTSE®” is a trademark of London Stock Exchange Group
companies and is used by FTSE under license. The Vanguard Emerging Markets
Stock Index Fund (the “Product”) has been developed solely by Vanguard. The
Index is calculated by FTSE or its agent. FTSE and its licensors are not
connected to and do not sponsor, advise, recommend, endorse or promote the
Product and do not accept any liability whatsoever to any person arising out
of (a) the use of, reliance on or any error in the Index or (b) investment in
or operation of the Product. FTSE makes no claim, prediction, warranty or
representation either as to the results to be obtained from the Product or the
suitability of the Index for the purpose to which it is being put by Vanguard.
Vanguard Marketing Corporation, Distributor.
For more information, contact the Vanguard PR Hotline at 610-669-5002 or
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