Vanguard Switch to FTSE May Prompt Selling in South Korea Stocks

Vanguard Group Inc.’s emerging markets fund managers will need to sell shares of South Korean companies after the largest U.S. mutual-fund company replaced MSCI Inc. with FTSE Group as the benchmark provider for six equity funds.

The FTSE Emerging Index, which classifies South Korea as a developed market, will replace the MSCI Emerging Markets Index as the benchmark for the Vanguard Emerging Markets Stock Index Fund, Vanguard said in a statement yesterday. Six Vanguard international index funds with assets of $170 billion will transition to benchmarks in the FTSE Global Equity Index Series, according to the statement.