Vanguard Fires MSCI; Should You Fire Vanguard?
NEW YORK ( TheStreet) -- Vanguard has fired MSCI. Twenty-two Vanguard index funds that were tracking stock indexes from MSCI will soon be following FTSE and CRSP indexes.
What does this mean to you? Should you be concerned? Should you fire Vanguard as your ETF vendor? Read on for answers.
Additionally, 16 U.S. stock funds will move to newly developed benchmarks from the University of Chicago's Center for Research in Security Prices, or CRSP. These changes will apply to all the funds' share classes, including exchange-traded funds (ETFs). The Vanguard announcement linked above has a list of affected funds.The changes will take place gradually during the first six months of 2013, although Vanguard does not intend to reveal the schedules for individual funds. An added twist for the Vanguard Emerging Markets ETF (VWO) is it will be tracking a specially developed transition index during that time. Additional information on this process is available in the
When building portfolios based on multiple index providers, investors need to be cognizant of overlap and underlap. The most talked about example of this appears in the international indexes and the classification of South Korea. In the MSCI methodology, South Korea is an "emerging market" while in the FTSE methodology it has "developed market" status.
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