FTSE Group has been selected by Vanguard as the index benchmark provider for six international equity index funds with aggregate assets of USD170bn as of 31 August.
These funds will transition to benchmarks in the FTSE Global Equity Index Series, replacing MSCI.
This transaction represents the largest international index provider benchmark switch ever and includes the world’s largest emerging markets fund, the USD67bn Vanguard Emerging Markets Stock Index Fund and its exchange-traded fund (Ticker: VWO). These funds will move to the FTSE Emerging Index.
“Today’s agreement with Vanguard underlines FTSE’s continuing growth as a global brand,” says Mark Makepeace (pictured), chief executive of the FTSE Group. “With the switch, FTSE will become the third-largest equity exchange traded product index benchmark provider globally, with more than USD124bn in ETF assets benchmarked to FTSE indices.”
“The FTSE indexes are well constructed, offer comprehensive coverage of their respective markets, and meet Vanguard’s ‘best practice’ standards for market benchmarks,” says Vanguard chief investment officer Gus Sauter. “The benchmarks offer comprehensive and diversified coverage of the international developed and emerging markets.”
The long-term licensing agreement expands an already deep relationship between FTSE and Vanguard. Vanguard already employs FTSE benchmarks for more than 20 index portfolios around the world, representing USD26bn in aggregate assets, including nine ETFs benchmarked with a total AUM of USD13.4bn listed in the US, UK and Australia. FTSE will be a partner in Vanguard’s international growth strategy going forward, with products already announced in the UK and Canada.