Nine Vanguard index funds have transitioned to new target benchmarks, with eight domestic index funds moving to University of Chicago’s Center for Research in Security Prices (CRSP) indices and one international index fund adopting a FTSE index.
The transitions, which took effect on 17 April, are related to Vanguard’s October 2012 announcement that 22 funds would be adopting new indexes over several months.
The funds and their new indices are as follows –
Mega Cap Growth Index Fund – CRSP US Mega Cap Growth Index
Mega Cap Value Index Fund – CRSP US Mega Cap Value Index
Growth Index Fund – CRSP US Large Cap Growth Index
Value Index Fund – CRSP US Large Cap Value Index
Mid-Cap Growth Index Fund – CRSP US Mid Cap Growth Index
Mid-Cap Value Index Fund – CRSP US Mid Cap Value Index
Small-Cap Growth Index Fund – CRSP US Small Cap Growth Index
Small-Cap Value Index Fund – CRSP US Small Cap Value Index
Developed Markets Index Fund – FTSE Developed ex North America Index
With the change in benchmarks, the Vanguard Mega Cap 300 Growth Index Fund is renamed Vanguard Mega Cap Growth Index Fund and its two share classes are renamed Mega Cap Growth Index Fund Institutional Shares and Mega Cap Growth ETF. In addition, the Vanguard Mega Cap 300 Value Index Fund is renamed Vanguard Mega Cap Value Index Fund and its two share classes are renamed Mega Cap Value Index Institutional Shares and Mega Cap Value ETF.
Vanguard has now successfully transitioned 18 of the 22 funds to new benchmarks. The CRSP and FTSE indexes are well constructed, offer comprehensive market coverage, and meet Vanguard’s “best practice” standards for market benchmarks. Vanguard also expects that the benchmark transitions will result in considerable cost savings for the funds’ shareholders over time in the form of lower expense ratios. In addition, the agreements with FTSE and CRSP are long term in nature and provide cost certainty going forward with respect to licensing costs, which have been escalating and represent a growing portion of the expenses that investors pay to own index products.