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.