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Written by Journal of Indexes Staff
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August 09, 2007 12:00 AM | Related ETFs:
EFA / VEA
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Vanguard has filed papers with
the Securities and Exchange
Commission (SEC) for the right to
launch a new ETF tied to the MSCI
EAFE index. That index, of course, is
the same one tracked by the $45 billion
iShares MSCI EAFE index (NYSE:
EFA), Barclays Global Investor’s
(BGI’s) flagship ETF and the second
largest ETF in the world.
Vanguard plans to price its ETF
very aggressively, charging just 0.15
percent in expenses compared to
0.35 percent for EFA. The Vanguard
ETF will trade on the American
Stock Exchange (AMEX) under the
ticker symbol VEA. It will be called
the Vanguard Europe Pacific ETF.
The move is part of a broader
effort by Vanguard to challenge BGI
on the fee front. It made a similar
move with its emerging markets ETF
last year.
The new EAFE ETF will be a share
class of the Vanguard Tax-Managed
International Fund (VTMGX). That
means that VEA and VTMGX will
hold the same securities and receive
the same returns, before fees. As a
tax-managed fund, VTMGX does
make trades to lock in capital losses
when possible. The impact of these
trades, however, has been negligible
on performance in recent years.
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