Vanguard’s attempt to capture the exchange traded fund (ETF) market continues with the launch of a trio of mega-cap index funds. The trio includes one for the broad market, one for growth and one for value investment styles. The ETFs will have fees of 0.13%. Tracking benchmarks will be calculated by the MSCI Barra, which provides indexes that anchor several existing Vanguard index mutual funds and ETFs, reports John Spence for MarketWatch. The ETFs most likely will not be available until December and are for investors who want to focus on the market’s largest stocks.
These new ETFs will have some tough competition as several ETFs already focus on the U.S. market’s largest stocks, such as the Rydex Russell Top 50 (XLG) and the iShares S&P 100 Index (OEF). Year-to-date, XLG is up 10.3%, and OEF is up 12.2%.
This year, large-cap stocks have outpaced small-cap competitors, which have led the market for several years. Large-cap growth funds have posted the biggest gains among the major stock-fund categories during the third quarter. With growth and large caps being the winners this year, the timing for the new mega-cap ETFs could be perfect.
Read the disclosure, as Tom Lydon is a board member of Rydex funds.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.