(Photo: AP)

Vanguard is restructuring two REIT Index Funds and trimming the expense ratio for the institutional share class of its Total Stock Market Index and Institutional Index funds, according to a preliminary count of votes at Wednesday’s shareholder meeting.

(Related: John Bogle Warns: Vanguard Is Getting Too Big)

The Vanguard REIT Index Fund and Vanguard Variable Insurance Fund-REIT Index Portfolio are changing their benchmark index to provide broader exposure to the real estate market beyond REITs. The new benchmark is the MSCI US Investable Market Real Estate 25/50 Index, which includes property management and development companies in addition to REITs. (The 25/50 refers to the rules that no more than 25% of the value of a registered investment company may be invested in a single issuer and the sum of the weights of all issuers representing more than 5% of the fund should not exceed 50% of the fund’s total assets.)

(Related: Vanguard Plans 2 New Actively Managed Funds)

Ironically, the Vanguard REIT Index Fund will be reclassified to “nondiversified” from “diversified” in compliance with securities laws.

Vanguard shareholders also approved a change to the fund service agreements for the Vanguard Institutional Total Stock Market Index Fund and Vanguard Institutional Index Fund that will reduce the expense ratio for both, from 0.04% to 0.035% and lower minimum initial investment requirements.

Shareholders of hundreds of other Vanguard funds voted on changes that would give the funds more flexibility when changing advisors. Shareholders of 195 funds voted on a proposal that would let the funds retain Vanguard subsidiaries as investment advisors without first obtaining shareholder approval, and they approved the change for 179 funds.

Shareholders of 147 funds voted on a proposal to allow the funds to retain outside firms as investment advisors without first receiving shareholder approval, and they approved that change for 132 funds.

Shareholders were far less supportve of a proposal submitted by advocates for Investors Against Genocide that called on roughly 50 stock and bond funds to divest their holdings in companies that substantially contribute to genocide or crimes against humanity. They defeated the proposal for all the funds that would have been impacted.

In addition to these proxy votes, Vanguard shareholders elected three new members to the board of trustees for all its U.S. Funds, including two women: Guardian Life CEO Deanna Mulligan and Former Deputy U.S. Treasury Secretary Sarah Bloom Raskin. Vanguard President Tim Buckley was also elected to the board.

Nine other trustees were re-elected, including Chairman and CEO Bill McNabb and Lead Independent Trustee Mark Loughridge. Buckley will replace McNabb as CEO on Jan. 1.

Last week Vanguard today launched the Vanguard Total Corporate Bond ETF (VTC), which expanded its U.S. bond fund roster to 17 ETFs and 51 indexed and actively managed mutual funds.

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