International Stock ETF will have an estimated expense ratio of 0.20%, which is more than 60% lower than the average expense ratio of competing ETFs. (Source: Lipper, Inc., as of December 31, 2009.)
“Vanguard Total International Stock ETF (VXUS) is a new way to invest in an established fund that offers broad international diversification with an extremely modest price tag”
The new ETF is a separate share class of Vanguard Total International Stock Index Fund, which was introduced in 1996 and is currently Vanguard’s second-largest international index fund, with $51.4 billion in net assets.
“Vanguard Total International Stock ETF (VXUS) is a new way to invest in an established fund that offers broad international diversification with an extremely modest price tag,” said Vanguard’s Chief Investment Officer Gus Sauter. “It complements our Total Stock Market ETF and Total Bond Market ETF, and enables advisors and individual investors to assemble a simple, balanced, and well-diversified portfolio using low-cost ETFs.”
The Total International Stock ETF’s target index covers 98% of the world’s non-U.S. markets, including the European, Pacific, and emerging market regions, as well as Canada. The index includes more than 6,000 issues encompassing stocks of large-, mid-, and small-capitalization companies in 44 countries.
Vanguard, headquartered in Valley Forge, Pennsylvania, is one of the world’s largest investment management companies and a leading provider of company-sponsored retirement plan services. Vanguard manages nearly $1.6 trillion in U.S. mutual fund assets, including $148 billion in ETF assets. Vanguard offers more than 170 funds to U.S. investors and more than 50 additional funds in non-U.S. markets.
There are other material differences between funds that must be considered prior to investing.
Vanguard ETF Shares are not redeemable with an Applicant Fund other than in Creation Unit aggregations. Instead, investors must buy or sell Vanguard ETF Shares in the secondary market with the assistance of a stockbroker. In doing so, the investor will incur brokerage commissions and may pay more than net asset value when buying and receive less than net asset value when selling.
All mutual funds and ETFs are subject to risk, which may result in the loss of principal. International ETFs involve additional risks, including currency fluctuations and political uncertainty. ETF products that invest in emerging markets are generally more risky than those that invest in developed countries because countries with emerging markets may have relatively unstable and less-established markets and economies. Sector ETFs are subject to sector risks and nondiversification risks, which may result in performance fluctuations that are more extreme than fluctuations in the overall stock market. In addition, sector ETFs that sample their target indexes to comply with tax diversification rules may experience a greater degree of tracking error than other ETFs. Prices of mid- and small-cap stocks often fluctuate more than those of large-company stocks. Diversification does not ensure a profit or protect against a loss in a declining market.
For more information about Vanguard funds, visit vanguard.com or call 800-662-7447, to obtain a prospectus. Investment objectives, risks, charges, expenses, and other important information about a fund are contained in the prospectus; read and consider it carefully before investing.
All asset figures are as of December 31, 2010, unless otherwise noted.
Vanguard Marketing Corporation, Distributor.