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Vanguard TSX-listed emerging markets ETF transitions to new FTSE Index


The TSX-listed Vanguard FTSE Emerging Markets Index ETF (VEE), has begun tracking a new FTSE transition benchmark, in the first phase of a two-phase change to a new target benchmark, the FTSE Emerging Markets All Cap China A Inclusion Index. 

This change was effective with the opening of trading on 2 November, 2015.

The ETF will be renamed as the Vanguard FTSE Emerging Markets All Cap Index ETF, but its ticker symbol will remain unchanged. 

The changes to VEE follow closely index changes to the US-listed Vanguard FTSE Emerging Markets ETF (NYSE: VWO) in which it invests. The TSX-listed Vanguard FTSE Global All Cap ex Canada Index ETF (TSX: VXC) also invests in VWO. As was announced by Vanguard in September 2015, it will also gain exposure to China A-Shares as VWO transitions to the new target index.

To minimise market impact, in the first phase, VWO will track the FTSE Emerging Markets All Cap China A Transition Index, an interim index that will gradually increase exposure to small-capitalization stocks and China A-shares while proportionately reducing exposure to other stocks based on their weightings in the new index. The transition is expected to occur over approximately 12 months and will reduce the costs associated with trading large amounts of securities in a short period. To provide transparency to shareholders during the transition, FTSE will supply monthly updates of the transition index's composition at

In the second phase, at the conclusion of the transition, VWO will track its new target index, the FTSE Emerging Markets All Cap China A Inclusion Index, which is a market-capitalization-weighted index representing the performance of  large-, mid-, and small-cap stocks from advanced and secondary emerging markets. Through the addition of China A-shares to VWO, investors in VEE and VXC will gain exposure to a key emerging economy and the second-largest share market in the world by market cap.

Through the addition of China A-shares to VWO, VEE and VXC will be the first broad-based, market-capitalisation weighted TSX-listed ETFs to include exposure to both all-caps and China A-shares. These changes move investors closer to full market-cap weightings providing them with more complete and diversified exposure to China, a key emerging economy with the world's second-largest gross domestic product and stock market.

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