News From the Week


Vanguard moves to discourage market timers

The Vanguard Group said it will jack up the minimum initial investment for its Selected Value Fund from $3,000 to $25,000, effective July 23. Vanguard also indicated that a 1% redemption fee would be assessed to shares redeemed within five years of purchase, starting August 1.

The moves were made to discourage market timing in Selected Value, which is up 36.84% for the year as of the end of June, according to Morningstar. Vanguard Selected Value will also change its benchmark index from Russell Midcap to Russell Midcap Value, effective August 6.

More Admiral Shares

Additionally, Vanguard announced plans earlier this week to offer Admiral Shares for six of its funds: European Stock Index, Pacific Stock Index, International Growth, U.S. Growth, Equity Income, and Asset Allocation.

Admiral Shares are designed to reward large, long-tenured shareholders with lower expense ratios. If approved, the addition of the funds above will bring the total number of Vanguard funds offering Admiral Shares to 34. To learn more about who qualifies for Admiral Shares, see a previous article.

New UK exchange-traded fund

A new exchange-traded fund (ETF) tracking the MSCI United Kingdom index began trading today on the Euronext exchange. The MSCI UK is a broad index that tracks 111 cap-weighted stocks with a total market capitalization of about $1.6 trillion as of yesterday, according to the ETF's manager, State Street Global Advisors (SSgA).

The new offering is available only to residents of the Netherlands. Euronext is the result of a merger of the Amsterdam, Brussels and Paris exchanges.

SSgA currently manages 26 ETFs with almost $39 billion in assets under management.

For those keeping track, today's latest addition brings the number of ETFs trading globally to 179, with nearly $100 billion in global assets. According to the latest report released by the American Stock Exchange (AMEX), where 89 ETFs are listed, over $74.2 in assets now resides in AMEX-listed ETFs.