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Vanguard will add new index and ETF offerings
JUNE 24, 2010
Vanguard is expanding its index fund family, introducing new funds with ETF Shares to provide investors with additional low-cost stock and bond choices. The expansion includes ETF Shares of Vanguard® 500 Index Fund.
The new ETFs will be available commission-free to Vanguard Brokerage clients* and will feature expense ratios substantially below those of competing products. (Source: Morningstar, 3/31/2010).
Over the next year, these new funds and ETFs will add indexed municipal products to our fixed income lineup and present investors with the option of an international real estate fund and ETF.
Vanguard will offer three new municipal bond index funds with both traditional and exchange-traded shares. The three will seek to track benchmarks in the S&P National AMT-Free Municipal Bond Index series.
The new international real estate fund will be benchmarked to the S&P Global ex-U.S. Property Index. Vanguard Global ex-U.S. Real Estate Index Fund will offer Investor Shares and ETF Shares, as well as share classes for institutional investors.
Registration statements for the new funds and ETFs, and the Vanguard S&P 500 ETF, were filed with the SEC today.
The table below shows the new ETFs and other share classes that will be available to personal investors.
New ETF or fund Expense ratios
ETF Shares Investor Shares Admiral™ Shares
Vanguard S&P 500 ETF 0.06% — —
Vanguard Short-Term Municipal Bond Index Fund (Vanguard Short-Term Municipal ETF) 0.12% — 0.12%
Vanguard Intermediate-Term Municipal Bond Index Fund (Vanguard Intermediate-Term Municipal ETF) 0.12% — 0.12%
Vanguard Long-Term Municipal Bond Index Fund (Vanguard Long-Term Municipal ETF) 0.12% — 0.12%
Vanguard Global ex-U.S. Real Estate Index Fund (Vanguard Global ex-U.S. Real Estate ETF) 0.35% 0.50% —
* Trading limits and fund expenses may apply. See the Vanguard Brokerage Services® commission and fee schedule for full details.
All mutual funds and ETFs are subject to market risk, which may result in the loss of principal. Prices of mid- and small-cap stocks often fluctuate more than those of large-company stocks. Foreign investing involves additional risks including currency fluctuations and political uncertainty. Funds that concentrate on a relatively narrow market sector face the risk of higher share-price volatility. Investments in bond funds are subject to interest rate, credit, and inflation risk. Although the income from a municipal bond fund is exempt from federal tax, you may owe taxes on any capital gains realized through the fund's trading or through your own redemption of shares. For some investors, a portion of the fund's income may be subject to state and local taxes, as well as to the federal Alternative Minimum Tax.
Vanguard ETFs are not redeemable with an Applicant 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 will incur brokerage commissions and may pay more than net asset value when buying and receive less than net asset value when selling.
U.S. Pat. No. 6,879,964 B2; 7,337,138.
A registration statement relating to these securities 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.
For more information about Vanguard funds, visit www.vanguard.com, or call 800-662-7447, to obtain a prospectus. Investment objectives, risks, charges, expenses, and other important information about a fund are contained in the prospectus; read and consider it carefully before investing. Copies of the final prospectus can be obtained from Vanguard. Please note that a preliminary prospectus is subject to change.
S&P®, S&P 500®, and 500 are trademarks of The McGraw-Hill Companies, Inc., and have been licensed for use by The Vanguard Group, Inc. Vanguard mutual funds are not sponsored, endorsed, sold, or promoted by Standard & Poor's, and Standard & Poor's makes no representation regarding the advisability of investing in the funds.
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