Over the past several years, some of the largest issuers of exchange traded funds, including BlackRock’s iShares and State Street’s SPDR ETFs, have reduced fees on existing ETFs, introduced new low-cost products and grouped those funds into “core” suites of funds, targeting those products at cost-conscious, long-term advisors and investors.
Vanguard, the second-largest U.S. ETF sponsor behind iShares, is getting into the core game with a group of 13 of its largest, most popular funds known as Vanguard Select ETFs.
“When you start with our new short list of 13 Vanguard Select ETFs, you can avoid getting stuck in choice overload,” said Vanguard in a statement. “This carefully assembled list gives you the building blocks to create a well-diversified portfolio that could help you achieve just about any investment goal.”
In February, it was revealed that Pennsylvania-based Vanguard lowered fees on a broad swath of its ETFs.
Those funds include the Vanguard Total Bond Market ETF (NasdaqGM: BND), Vanguard FTSE All-World ex-US (NYSEArca: VEU), Vanguard FTSE Europe ETF (NYSEArca: VGK), Vanguard FTSE Pacific ETF (NYSEArca: VPL), Vanguard Tax-Exempt Bond ETF (NYSEArca: VTEB), Vanguard FTSE Emerging Markets ETF (NYSEArca: VWO) and Vanguard Total International Stock ETF (NASDAQ: VXUS).
Inside Vanguard Select
The 13 Vanguard ETFs comprising Vanguard Select include four total market ETFs, five domestic fixed income funds, two domestic equity funds and a pair of international equity ETFs.
The aforementioned BND, VXUS, VWO and VTEB are members of the Vanguard Select group. Other funds in the Vanguard Select group include the Vanguard Total Stock Market ETF (NYSEArca: VTI), Vanguard S&P 500 ETF (NYSEArca: VOO) and the Vanguard FTSE Developed Markets ETF (NYSEArca: VEA).
VTI seeks to track the performance of a benchmark index that measures the investment return of the overall stock market. The fund employs an indexing investment approach designed to track the performance of the CRSP US Total Market Index, which represents approximately 100 percent of the investable U.S. stock market and includes large-, mid-, small-, and micro-cap stocks regularly traded on the New York Stock Exchange and Nasdaq. It invests by sampling the index, meaning that it holds a broadly diversified collection of securities that, in the aggregate, approximates the full index in terms of key characteristics.
VEA seeks to track the performance of the FTSE Developed All Cap ex US Index. The fund employs an indexing investment approach designed to track the performance of the FTSE Developed All Cap ex US Index, a market-capitalization-weighted index that is made up of approximately 3,790 common stocks of large-, mid-, and small-cap companies located in Canada and the major markets of Europe and the Pacific region. The adviser attempts to replicate the target index by investing all, or substantially all, of its assets in the stocks that make up the index, holding each stock in approximately the same proportion as its weighting in the index.
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