July 31, 2003 — Vanguard Group, which is known for its index funds, plans to introduce a fund that tracks an index of large-cap stocks and ten other index funds that invest in individual industries. All will track domestic benchmarks developed by Morgan Stanley Capital International.

The company, which oversees about $230 billion in index funds, also said it will bring out exchange-traded versions of the new funds and nine of its other index funds. All are expected to be introduced in the fall.

The new offerings include the Large-Cap Index fund, which is designed to mimic the MSCI US Prime Market 750 index.

The sector funds will track segments of the MSCI US Investable Market 2500 index. They will invest in energy, health care, financial services, telecommunications, and information technology companies, as well as utilities.

In addition, the company will debut a Materials Index fund, and two index funds that invest in manufacturers of consumer staples, and companies that offer products or services that consumers have discretion to buy or use.

Although Vanguard believes sector funds should “represent a very modest portion” of individuals’ portfolios, “some institutional investors and financial intermediaries find sector funds to be useful in more sophisticated investment strategies,” the company’s chief investment officer, Gus Sauter, said in a statement.

Brokers, financial planners and other third parties who sell mutual funds have asked Vanguard to offer sector funds, a company spokesman said.