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MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication |
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Wednesday, May 4, 2011 Vanguard Kills Redemptions Fees For Four Funds Vanguard [see profile] has scuttled the one percent redemption fee for all shares held less than five years for the Tax-Managed Balanced, Tax-Managed Capital Appreciation, Tax-Managed Growth and Income, and Tax-Managed Small-Cap Funds. And effective May 13, investor shares of the Tax-Managed Balanced, Tax-Managed Small-Cap, and Tax-Managed International Funds will be renamed Admiral Shares. In addition, all outstanding investor shares of the Tax-Managed Capital Appreciation and Tax-Managed Growth and Income Funds will be converted into Admiral Shares on that date. Going forward, the account minimum requirements for Admiral Shares of all the Tax-Managed Funds will be $10,000. Investor Shares will no longer be available for these funds. Vanguard to Make Indexing the Focus of Education Effort. With indexing growing in popularity as an investment strategy, indexing pioneer Vanguard is embarking on a new educational campaign focusing on the strategy's merits, history, and continued evolution. On May 3rd, Vanguard will unveil a new site on Vanguard.com that will serve as a repository of information and commentary on index investing. In a live web event on May 10th, Vanguard's Chief Investment Officer Gus Sauter will join nationally-recognized personal finance columnist Jane Bryant Quinn and Morningstar's research director John Rekenthaler for a roundtable discussion about various aspects of indexing, including ETFs and alternative weighting methodologies. The panel will also respond to viewer questions. The event is open to the public; registration can be completed at www.vanguard.com/indexwebcastreg. Vanguard Updates Case for Indexing Research Paper. Historically an indexing investment strategy has performed favorably in relation to actively managed investment strategies, as a result of indexing’s low costs, broad diversification, minimal cash drag, and, for taxable investors, the potential for tax efficiency. These factors represent a significant hurdle that an active manager must overcome just to break even with a low-cost index strategy over time, in any market. Of course, skilled active managers who have overcome these hurdles do exist, but as Vanguard's research and other empirical evidence suggest, the likelihood of outperformance by a majority of managers dwindles over time as the compounding of costs becomes more difficult to surmount. This newly updated paper explores both the theory underlying index investing and evidence to support its advantages. Vanguard Announces Changes To Tax-Managed Funds. Effective immediately, the 1% redemption fee for all shares held less than five years for the Tax-Managed Balanced, Tax-Managed Capital Appreciation, Tax-Managed Growth and Income, and Tax-Managed Small-Cap Funds has been eliminated. Effective May 13, 2011, Investor Shares of the Tax-Managed Balanced, Tax-Managed Small-Cap, and Tax-Managed International Funds will be renamed Admiral Shares™. In addition, all outstanding Investor Shares of the Tax-Managed Capital Appreciation and Tax-Managed Growth and Income Funds will be converted into Admiral Shares on that date. Going forward, the account minimum requirements for Admiral Shares of all the Tax-Managed Funds will be $10,000. Investor Shares will no longer be available for these funds. Broad International ETF Reports Lower Expense Ratio. The 2010 expense ratio of Vanguard MSCI EAFE ETF (VEA), which seeks to track the MSCI® EAFE® Index, declined to 0.12% from 0.15%. Introduced in July 2007, VEA has $6.1 billion in net assets. __________________________________________ Mutual funds and ETFs are subject to risks, including possible loss of principal. Foreign investing involves additional risks including currency fluctuations and political uncertainty. Stocks of companies in emerging markets are generally more risky than stocks of companies in developed countries. It is possible that Tax-Managed funds will not meet their objective of being tax-efficient. Diversification does not ensure a profit or protect against a loss in a declining market. Prices of small-cap stocks often fluctuate more than those of large-company stocks. For more information about Vanguard funds, visit vanguard.com or call 800-662-7447, to obtain a prospectus. Investment objectives, risks, charges, expenses, and other important information about a fund are contained in the prospectus; read and consider it carefully before investing Vanguard ETF Shares are not redeemable with an Applicant Fund other than in Creation Unit aggregations. Instead, investors must buy or sell Vanguard ETF Shares in the secondary market with the assistance of a stockbroker. In doing so, the investor may incur brokerage commissions and may pay more than net asset value when buying and receive less than net asset value when selling. The funds or securities referred to herein are not sponsored, endorsed, or promoted by MSCI, and MSCI bears no liability with respect to any such funds or securities. For any such funds or securities, the prospectus or the Statement of Additional Information contains a more detailed description of the limited relationship MSCI has with The Vanguard Group and any related funds. U.S. Pat. No. 6,879,964 B2; 7,337,138. Vanguard Marketing Corporation, Distributor. Printed from: MFWire.com/story.asp?s=36703 Copyright 2011, InvestmentWires, Inc. All Rights Reserved |