Vanguard has introduced the Vanguard Total World Stock Index Fund, which aims to track the investment performance of the FTSE All-World Index, a benchmark of some 2,900 stocks in 47 countries.
“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,” says Vanguard Chief Investment Officer Gus Sauter. “We view the new offering as an ideal ‘foundation fund’ for a well-diversified investment portfolio.”
Investor shares (trading as VTWSX) require a $3,000 minimum initial investment and have an estimated expense ratio of 0.45 percent. They also have a 0.25 percent purchase fee to help defray the transaction costs associated with buying foreign securities and a 2 percent redemption fee if sold within two months of purchase.
According to Vanguard, the FTSE All-World Index is a market-capitalization-weighted index that measures the performance of large- and mid-capitalization stocks worldwide. Stocks of companies domiciled in developed and emerging international markets represent roughly 60 percent of the index, while the remaining 40 percent are U.S. stocks.
The introduction of Vanguard Total World Stock Index Fund brings the number of Vanguard’s index offerings to 52 funds.
In other developments, Vanguard is also reducing fees on the conventional shares of two index funds: The Vanguard FTSE All-World ex-U.S. Index Fund has eliminated its 0.25% purchase fee, and the Vanguard Emerging Markets Stock Index Fund has reduced both its purchase fee and its redemption fee from 0.50 percent to 0.25 percent
In addition, the board of trustees of the Vanguard Explorer Fund has named Century Capital Management, LLC, as the seventh advisor to the $11 billion fund. This will be the first mandate that Century Capital, an independent, Boston-based investment advisory firm, has managed for Vanguard.
According to Vanguard, Explorer seeks long-term capital appreciation using a multi-manager approach that provides exposure to a broad universe of small-company growth stocks. Century Capital will initially manage a relatively modest portion of the fund’s assets, the fund company says.
As of April 30, the breakdown of assets among the other advisors was: Granahan Investment Management, Inc., 22 percent; AXA Rosenberg Investment Management LLC, 13 percent; Kalmar Investment Advisers, 14 percent; Wellington Management Company, LLP, 14 percent; Chartwell Investment Partners, 9 percent; and Vanguard Quantitative Equity Group, 25 percent; with the remaining 4 percent held in cash.
The Vanguard Explorer Fund has been closed to new investors since February 2006, and additional purchases by current shareholders are capped at $25,000 annually per fund account. The addition of the new advisor is not expected to impact the fund’s 0.41 percent expense ratio.