US asset manager Vanguard has announced a two-for-one split of the exchange-traded fund shares of the Vanguard Total Stock Market Index Fund, Vanguard Emerging Markets Stock Index Fund and
US asset manager Vanguard has announced a two-for-one split of the exchange-traded fund shares of the Vanguard Total Stock Market Index Fund, Vanguard Emerging Markets Stock Index Fund and Vanguard Extended Market Index, which it says should boost trading volumes. The conventional shares of the funds are not affected by the split.
The share split for Vanguard Total Stock Market ETF, Vanguard Emerging Markets ETF and Vanguard Extended Market ETF entitles each shareholder of record at the close of business on June 13 to receive one additional share for every share of the ETF held on that date. The additional shares are expected to be distributed to shareholders on June 17 and will trade at the new split-adjusted price as of the following day.
The two-for-one split will lower the share price of the three ETFs, all currently trading above USD100 per share, to half of their pre-split level and double the number of outstanding shares. Vanguard expects the split to at least double the average daily trading volume.
Vanguard Total Stock Market ETF, which had an industry-leading expense ratio of 0.07 per cent at the end of last year, and Vanguard Emerging Markets ETF, which had an expense ratio of 0.25 per cent, are two of the asset manager’s largest and most actively traded ETFs.
At the end of May, the Total Stock Market ETF had net assets of USD10.8bn, while the Emerging Markets ETF, which was launched in May 2004, had assets of USD7.6bn. The average expense ratio of Vanguard ETFs is 0.16 per cent, less than half the industry average of 0.48 per cent, according to Lipper.
Vanguard, which offers 37 stock and bond ETFs, has seen its total ETF assets grow 78 per cent over the 12 months to April to more than USD50bn and has reported cash flow for the first five months of the year to USD8.7bn.
Headquartered in Valley Forge, Pennsylvania, Vanguard is one of the world’s largest investment management companies with more than USD1.3trn in US mutual fund assets, including more than USD390bn in employer-sponsored pension plans. The group offers more than 150 funds to US investors and more than 50 other funds outside the US.
