Vanguard has introduced its Total World Stock Index Fund, which seeks to track the investment performance of the FTSE All-World Index--a "market-capitalization-weighted index designed to measure the performance of large- and mid-cap stocks worldwide," and a benchmark of approximately 2,900 stocks in 47 countries, according to Vanguard. The Fund offers three share classes: ETF Shares feature an estimated expense ratio of 0.25%, the lowest cost for any ETF tracking a broad global benchmark, as said by Vanguard; Investor Shares require a $3,000 minimum initial investment and have an estimated expense ratio of 0.45%; and Institutional Shares have the lowest estimated expense ratio of the three share classes at 0.20%. A $5 million minimum initial investment is required, however.
The fund's Investor and Institutional share classes also charge a 0.25% purchase fee to help foot the transaction costs associated with buying foreign securities and a 2% redemption fee on shares sold within two months of purchase. The redemption fee is intended to deter short-term investing.
"Vanguard Total World Stock Index Fund is our first passively managed global fund and provides exposure to the world's stock markets through a single, low-cost vehicle," said Vanguard CIO Gus Sauter, in announcing the new Index Fund.
The introduction of Vanguard Total World Stock Index Fund brings the number of Vanguard's index offerings to 52 funds and 38 ETFs. Vanguard reports managing more than $620 billion in indexed assets, including more than $50 billion in ETF assets.
On another note, Vanguard is also reducing fees on the conventional shares of two index funds, effective immediately. Vanguard FTSE All-World ex-US Index Fund has eliminated its 0.25% purchase fee, and Vanguard Emerging Markets Stock Index Fund has reduced both its purchase fee and its redemption fee from 0.50% to 0.25%.