Vanguard TSX-Listed Emerging Markets ETF Transitions To New FTSE Index

TORONTO, Nov. 1, 2015 /CNW/ -- Vanguard Investments Canada Inc., announced that the TSX-listed Vanguard FTSE Emerging Markets Index ETF (VEE), will begin tracking a new FTSE transition benchmark, in the first phase of a two-phase change to a new target benchmark, FTSE Emerging Markets All Cap China A Inclusion Index. This change will be effective with the opening of trading on November 2, 2015.

The ETF will be renamed, but its ticker symbol will remain unchanged. The following table summarizes the changes.

Vanguard ETF^®	New ETF name	TSX ticker	Former FTSE benchmark	Transition benchmark	Target benchmark
Vanguard FTSE Emerging Markets Index ETF	Vanguard FTSE Emerging Markets All Cap Index ETF	VEE	FTSE Emerging Index	FTSE Emerging Markets All Cap China A  Transition Index	FTSE Emerging Markets All Cap China A Inclusion Index

The changes to VEE follow closely index changes to the U.S.-listed Vanguard FTSE Emerging Markets ETF (NYSE: VWO) in which it invests. The TSX-listed Vanguard FTSE Global All Cap ex Canada Index ETF (TSX: VXC) also invests in VWO. As was announced by Vanguard in September 2015, it will also gain exposure to China A-Shares as VWO transitions to the new target index.

To minimize market impact, in the first phase, VWO will track the FTSE Emerging Markets All Cap China A Transition Index, an interim index that will gradually increase exposure to small-capitalization stocks and China A-shares while proportionately reducing exposure to other stocks based on their weightings in the new index. The transition is expected to occur over approximately 12 months and will reduce the costs associated with trading large amounts of securities in a short period. To provide transparency to shareholders during the transition, FTSE will supply monthly updates of the transition index's composition at ftse.com/vanguard.

In the second phase, at the conclusion of the transition, VWO will track its new target index, the FTSE Emerging Markets All Cap China A Inclusion Index, which is a market-capitalization-weighted index representing the performance of  large-, mid-, and small-cap stocks from advanced and secondary emerging markets. Through the addition of China A-shares to VWO, investors in VEE and VXC will gain exposure to a key emerging economy and the second-largest share market in the world by market cap.

Through the addition of China A-shares to VWO, VEE and VXC will be the first broad-based, market-capitalization weighted TSX-listed ETFs to include exposure to both all-caps and China A-shares.¹ These changes move investors closer to full market-cap weightings providing them with more complete and diversified exposure to China, a key emerging economy with the world's second-largest gross domestic product and stock market.² 

These transitions are part of the changes to six international TSX-listed equity index funds announced by Vanguard in June 2015.

About Vanguard
Vanguard Investments Canada Inc. is a wholly owned indirect subsidiary of The Vanguard Group, Inc., and manages more than $6 billion (CAD) in assets. The Vanguard Group, Inc., is one of the world's largest investment management companies and a leading provider of company-sponsored retirement plan services. As of September 30, 2015, Vanguard managed $3.2 trillion (USD) in global assets, including nearly $500 billion (USD) in global ETF assets. Vanguard has offices in the United States, Canada, Europe, Australia and Asia. The firm offers 300 funds, including ETFs, to its more than 20 million investors worldwide.  

Vanguard operates under a unique operating structure. Unlike firms that are publicly held or owned by a small group of individuals, The Vanguard Group, Inc., is owned by Vanguard's U.S.-domiciled funds and ETFs. Those funds, in turn, are owned by Vanguard clients. This unique mutual structure aligns Vanguard interests with those of its investors and drives the culture, philosophy, and policies throughout the Vanguard organization worldwide. As a result, Canadian investors benefit from Vanguard's stability and experience, low-cost investing, and client focus. For more information, please visit vanguardcanada.ca.

¹ Source: Bloomberg, as of September 30, 2015.

² China A-shares make up about 9.4% of world stock market capitalization, second-largest after the U.S. stock markets. With the world's second-largest GDP, China also accounted for 13.3% of world GDP, according to Bloomberg WCAP, as of December 2014.

Commissions, management fees, and expenses all may be associated with investments in a Vanguard ETF®. Investment objectives, risks, fees, expenses, and other important information are contained in the prospectus; please read it before investing. ETFs are not guaranteed, their values change frequently, and past performance may not be repeated. Vanguard ETFs® are managed by Vanguard Investments Canada Inc., an indirect wholly-owned subsidiary of The Vanguard Group, Inc., and are available across Canada through registered dealers.

London Stock Exchange Group companies include FTSE International Limited ("FTSE"), Frank Russell Company ("Russell"), MTS Next Limited ("MTS"), and FTSE TMX Global Debt Capital Markets Inc. ("FTSE TMX"). All rights reserved. "FTSE®", "Russell®", "MTS®", "FTSE TMX®" and "FTSE Russell" and other service marks and trademarks related to the FTSE or Russell indexes are trademarks of the London Stock Exchange Group companies and are used by FTSE, MTS, FTSE TMX and Russell under licence. All information is provided for information purposes only. No responsibility or liability can be accepted by the London Stock Exchange Group companies nor its licensors for any errors or for any loss from use of this publication. Neither the London Stock Exchange Group companies nor any of its licensors make any claim, prediction, warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the FTSE Global All Cap ex Canada China A Index, FTSE Developed Europe All Cap Index and the FTSE Developed Asia Pacific All Cap Index  or the fitness or suitability of the Indexes for any particular purpose to which they might be put.

All investments, including those that seek to track indexes, are subject to risk, including the possible loss of principal. Diversification does not ensure a profit or protect against a loss in a declining market. While ETFs are designed to be as diversified as the original indexes they seek to track and can provide greater diversification than an individual investor may achieve independently, any given ETF may not be a diversified investment.

SOURCE Vanguard Investments Canada Inc.

For more information, contact Vanguard PR at 610-669-5002, http://www.vanguardcanada.ca