Stymied in its efforts to launch exchange-traded shares tracking the

S&P 500

index, fund titan

Vanguard

plans to launch shares tracking the even broader

Wilshire 5000 Total Market Index

at the end of May.

Vanguard plans to add an exchange-traded share class to the

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Vanguard Total Stock Market Index fund on May 31, according to a Thursday announcement. The new share class, slated to trade under the symbol VTI on the

American Stock Exchange

, will carry a 0.15% expense ratio, or $15 a year on a $10,000 investment. That's slightly lower than the 0.20% annual fee on the fund's traditional fund shares, and both are well below an average large-cap blend fund's 1.24% annual expense ratio, according to

Morningstar

.

The new share class will give Vanguard a fund in the broad index-based exchange-traded fund market, as a

licensing beef with

Standard & Poor's

has derailed the firm's efforts to launch exchange-traded shares for the

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Vanguard 500 Index fund.

Unlike traditional mutual funds, exchange-traded funds, or ETFs, price throughout the trading day and trade like stocks on an exchange. Their popularity is a potent threat to traditional index mutual funds, where almost half of the $206 billion invested in S&P 500 index funds sits in Vanguard's coffers, according to

Lipper

. Of the $66 billion invested in ETFs, nearly $59 billion is invested in funds tracking broad U.S. stock indices like the S&P 500, according to the

Investment Company Institute

, the fund industry's largest trade group. For more details on ETFs, check out this

primer.

Vanguard's new ETF share class, called VIPERs (which is short for Vanguard Index Participation Equity Receipts), is the firm's first foray into the ETF market. The fund's 0.15% expense ratio is lower than the actual expenses carried by other broad, index-based ETFs, and it will be the first to track the Wilshire 5000, an index designed to mirror the performance of all U.S. traded stocks. That said, investors have to use brokers and pay a commission when they purchase ETF shares.

Shareholders of the Vanguard Total Market Index fund's traditional share classes will be able to convert to the fund's ETF shares for a $50 fee once the shares launch at the end of May, according to a company statement.

The primarily large-cap S&P 500 averages a 15.5% annual gain over the past five years, compared with 13.7% for the broader Wilshire 5000, according to Morningstar.