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Vanguard completes transition of two developed market ETFs to final target FTSE indexes


Vanguard Investments Canada’s TSX-listed Vanguard FTSE Developed All Cap ex US Index ETF (VDU) and Vanguard FTSE Developed All Cap ex US Index ETF (CAD-hedged) (VEF) have fully transitioned to the FTSE Developed All Cap ex US Index and FTSE Developed All Cap ex US Hedged to CAD Index, respectively. 

Both ETFs will begin tracking their target indexes as of 1 June, 2016.

Both ETFs tracked the FTSE Developed ex North America Index and FTSE Developed ex North America Hedged CAD Index prior to December. During a transition period that started on December 21, 2015, the ETFs tracked a transition benchmark, the FTSE Developed All Cap ex US Transition Index and FTSE Developed All Cap ex US Hedged to CAD Transition Index.

Vanguard implemented the transition cost-effectively over the past six months with minimal market impact costs while providing transparency to unitholders. As of 1 June, 2016, the ETFs will no longer seek to track the interim index and will begin to track their respective target indexes.

The two ETFs will now track broader FTSE benchmarks that include large-, mid-, and small-cap stocks, as well as shares of Canadian companies. Small-cap stocks will represent approximately 10.6 per cent of the fund's destination benchmark, with 7.4 per cent exposure to Canada. This offers more complete market-cap weightings, additional diversification and greater risk-management with more companies added to the index.

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