Vanguard's New Small-Cap Index Fund Covers Developed, Emerging Markets

According to a press release, a two-week subscription period began Thursday and is expected to end April 2, after which the fund will implement its long-term investment strategy.

Vanguard FTSE All-World ex-US Small-Cap Index Fund offers Investor Shares, with an estimated expense ratio of 0.60%, and Institutional Shares, with an estimated expense ratio of 0.35%. The fund’s ETF Shares (NYSE Arca: VSS) will launch at the conclusion of the subscription period and will have an estimated expense ratio of 0.38%.

The announcement said the new fund seeks to track the investment performance of the FTSE Global Small Cap ex US Index, a benchmark of approximately 3,300 stocks of companies located in 47 countries. According to Lipper data, the new Vanguard fund is the only international index fund in the industry to offer exposure to small-cap stocks of both developed and emerging markets outside the United States in a single portfolio.

The minimum initial investment requirement for Vanguard FTSE All-World ex- US Small-Cap Index Fund is $3,000 for Investor Shares and $5 million for Institutional Shares. There will be a 0.75% fee on purchases and redemptions of the Investor and Institutional Shares to help defray the transaction costs associated with buying and selling foreign securities.

The purchase and redemption fees do not apply while the subscription period is in effect.