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Vanguard to expand line-up with lowest-cost global emerging markets ETF

Vanguard | 31 October 2013


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Vanguard Australia today announced its plans to launch the Vanguard FTSE Emerging Markets Shares Exchange Traded Fund, with Australian Securities Exchange ticker code VGE.

Vanguard Australia (Vanguard) today announced its plans to launch the Vanguard FTSE Emerging Markets Shares Exchange Traded Fund (ETF), with Australian Securities Exchange (ASX) ticker code VGE.

Subject to regulatory approvals, it is anticipated that VGE will be quoted for trading on the ASX by mid-November 2013.

With an expense ratio of 48 basis points, VGE is set to be the lowest-cost* emerging markets ETF currently quoted (based on management fee) on the ASX. The new ETF offers access to some 926 listed stocks from 22 emerging economies in Asia, South America, Europe, Africa and the Middle East.

The ETF seeks to track the return of the FTSE Emerging Index, and brings to 10 the number of ETFs now offered by Vanguard for Australian investors and advisers.

Robyn Laidlaw, Head of Product and Marketing at Vanguard, said that Vanguard was pleased to offer investors a full spectrum of equities exposure - with Vanguard ETFs now available across developed, domestic, US, international and emerging markets - to enable them to build balanced, highly diversified ETF portfolios.

"For investors looking to obtain exposure to emerging markets, this ETF delivers comprehensive exposure at a low cost," Ms. Laidlaw said.

"In addition to low costs, underlying diversification is also vital, especially in volatile market conditions. VGE provides broad exposure to the world's emerging markets via a well-constructed market index and can deliver useful equity diversification to an investor's portfolio, which is typically un-correlated to the performance of developed economies."

VGE is Vanguard's first Australia-domiciled international equities ETF. The benefits of this local fund structure include the flexibility to elect dividend reinvestment, simplified withholding tax administration and no requirement for investors to complete the US W8-BEN tax form.

"It's an optimal solution to access global emerging markets while keeping control of your reporting and investment management onshore," Ms Laidlaw said.

VGE at a Glance

Vanguard® FTSE Emerging Markets Shares ETF

ASX Code

VGE

Benchmark

FTSE Emerging Index

Management Costs

0.48% p.a.

Distribution Frequency

Quarterly

Distribution reinvestment plan

Available (Investors can make their election through Computershare.)

Number of securities**

926 (as at 30.09.13)

Number of emerging market countries 

22 (as at 30.09.13)

 

*In addition to the low management costs, investors may also incur brokerage and a bid ask spread when acquiring ETFs on the ASX.

**These exposures reflect the investments of the underlying fund (Vanguard® FTSE Emerging Markets ETF - listed on NYSE Arca (NYSE Code: VWO) in which VGE invests.

Vanguard Investments Australia Ltd ("Vanguard") is the product issuer of the Vanguard® Australian ETFs. Vanguard is the issuer of the Prospectus on behalf of the US listed Exchange Traded Funds ("ETFs") described in the Prospectus. Vanguard has arranged for interests in the US ETFs to be made available to Australian investors via CHESS Depositary Interests that are quoted on the AQUA market of ASX. Vanguard ETFs will generally only be issued to Authorised Participants, that is persons who have entered into an Authorised Participant Agreement with Vanguard. Retail investors can transact in Vanguard ETFs through a stockbroker or financial adviser on the secondary market.

The Vanguard FTSE Emerging Markets Shares ETF is not currently available for trading and is subject to regulatory approval. A Product Disclosure Statement (PDS) will be made available for the Vanguard FTSE Emerging Markets Shares ETF when the ETF is available for trading. Investors should consider the relevant Prospectus or Product Disclosure Statement (PDS) in deciding whether to acquire Vanguard ETFs. Retail investors can only use the Prospectus and PDS for informational purposes only.

Vanguard is not offering the Vanguard FTSE Emerging Markets Shares ETFs in the United States and this document does not constitute an offer or an invitation to apply for or acquire any interests in the International ETFs in the United States. Information about the Vanguard FTSE Emerging Markets Shares ETF (VGE) is not intended for persons present in the United States of America.

All rights in the FTSE Emerging Index (the "Index") vest in FTSE International Limited ("FTSE"). "FTSE®" is a trademark of London Stock Exchange Group companies and is used by FTSE under licence. The Vanguard FTSE Emerging Markets Shares ETF (the "Product") has been developed solely by Vanguard. The Index is calculated by FTSE or its agent. FTSE and its licensors are not connected to and do not sponsor, advise, recommend, endorse or promote the Product and do not accept any liability whatsoever to any person arising out of (a) the use of, reliance on or any error in the Index or (b) investment in or operation of the Product. FTSE makes no claim, prediction, warranty or representation either as to the results to be obtained from the Product or the suitability of the Index for the purpose to which it is being put by Vanguard. The funds or securities referred to in this document are not sponsored, endorsed or promoted by MSCI, and MSCI bears no liability with respect to any such funds or securities. For any such funds or securities, the PDS, prospectus or the Statement of Additional Information contains a more detailed description of the limited relationship MSCI has with The Vanguard Group and any related funds.