April 3, 2003 — Vanguard Group said it will change the benchmarks that six of its stock index funds track, adopting bogeys developed by Morgan Stanley Capital International Inc.
The move affects about $19.5 billion of the $200 billion Vanguard manages in 40 stock and bond index funds. However, Vanguard does not plan to change the benchmark for its flagship Vanguard 500 Index/Inv (VFINX), which mimics the Standard & Poor’s 500-stock index, a company spokesman said.
The funds involved include the $7.4 billion Vanguard Growth Index/Inv (VIGRX), the $4 billion Vanguard Small Cap Index/Inv (NAESX), the $3.3 billion Vanguard Mid Cap Index/Inv (VIMSX) and the $3 billion Vanguard Value Index/Inv (VIVAX).
The other funds affected are Vanguard Small Cap Value Index/Inv (VISVX), the Vanguard Small Cap Growth Index/Inv (VISGX). The change also affects the Mid-Cap Index portfolio of Vanguard’s Variable Insurance Fund, which has $253 million in assets.
The funds currently all track benchmarks developed by Standard & Poor’s, except the Small Cap Index fund, which mimics the Russell 2000 index.
The MSCI indexes “incorporate most of the best practices we seek in market benchmarks,” Gus Sauter, a managing director who heads Vanguard’s quantitative equity group, said in a statement. Sauter added that the firm expects the new benchmarks “to reflect the performance of the funds’ targeted market segments more accurately than any other available indexes.”