Although early 2007 saw previously ebullient overseas equity markets start to look a bit less secure, the more balanced environment has yet to deter the ETF industry from developing new products designed to capture strong investor demand for international exposure.
Most recently, the Vanguard FTSE All-World ex-US Index Fund (AMEX:VEU) aims to track the performance of the FTSE All-World ex-US Index, a free float-adjusted, market cap-weighted index that, as its name implies, measures the aggregate equity market performance of the world’s markets, minus U.S. stocks. The index includes approximately 2,200 stocks of companies located in 47 countries, including both developed and emerging markets.
According to the prospectus, the fund’s expense ratio is 0.25 percent.
“The Amex is honored to add VEU to the broad family of Vanguard ETFs listed on the Amex,” says Scott Ebner, senior vice president of the American Stock Exchange’s ETF Marketplace. “This new international investment product accommodates a growing demand from investors who are seeking opportunities in developed and emerging global markets.”
Unlike stand-alone ETFs, Vanguard’s funds are an additional share class of existing index mutual funds. The unique arrangement allows Vanguard’s mutual fund shareholders to convert their shares to the Vanguard ETFs for a nominal fee.
Vanguard launched its first exchange-traded fund in 2001 and has gradually added to its ETF menu. The company currently manages just over $24 billion in a total of 28 ETFs. The Valley Forge, Pa.-based company is the largest U.S. mutual fund complex, with approximately $1.1 trillion of assets under management.
Ron DeLegge is the editor of www.etfguide.com.