![IndexFunds.com Staff]( "IndexFunds.com Staff")
IndexFunds.com Staff
Vanguard Offers Admiral Shares for Eight More Funds
IndexFunds.com Staff
Monday, May 14, 2001
The Vanguard Group today announced that "Admiral Shares" are now available for eight additional mutual funds within the Vanguard family.
Vanguard first introduced the share class designed to reward large and long-tenured shareholders in late 2000 with many of its popular domestic equity index funds. In January 2001, Vanguard made Admiral Shares available for 13 additional mutual funds. Today's announcement brings the total number of Vanguard funds that offer Admiral Shares to twenty-eight.
According to Vanguard, retail shareholders - both regular and IRA - are eligible for Admiral Shares under the following circumstances:
- The shareholder's fund account has a balance of $250,000 or more.
- The shareholder established the fund account at least three years ago and has a balance of $150,000 or more, and is registered for online account access with Vanguard.com.
- The shareholder established the fund account at least ten years ago and has a balance of $50,000 or more, and is registered for online account access with Vanguard.com.
To date, the new share class has attracted almost $30 billion, primarily from shareholders converting from Investor Shares, according to the Valley Forge, PA-based fund shop best known for its lineup of low-cost index funds.
The table below shows the new funds that now offer Admiral Shares:
|
Vanguard Fund
|
Admiral Shares
|
Investor Shares
|
| Vanguard Windsor II Fund |
0.33%
|
0.38%
|
| Vanguard Growth & Income Fund |
0.31%
|
0.39%
|
| Vanguard Morgan Growth Fund |
0.36%
|
0.44%
|
| Vanguard Wellington Fund |
0.26%
|
0.34%
|
| Vanguard Wellesley Income Fund |
0.24%
|
0.32%
|
| Vanguard NJ Insured Long-Term Tax-Exempt |
0.14%
|
0.20%
|
| Vanguard NY Insured Long-term Tax-exempt |
0.14%
|
0.20%
|
| Vanguard PA Insured Long-term Tax-exempt |
0.14%
|
0.20%
|
Source: The Vanguard Group
Vanguard noted that Admiral Shares are now available for the firm's largest actively-managed stock fund, Windsor II, and its largest balanced fund, Wellington. Here's how the two funds have stacked up against two of the firm's popular low-cost diversified funds, Vanguard 500 and Total Stock Market, over the years:
|
Vanguard Fund
|
1 yr
|
3 yr*
|
5 yr*
|
10 yr*
|
15 yr*
|
| Windsor II |
18.80%
|
4.71%
|
14.82%
|
15.24%
|
14.18%
|
| Wellington |
14.69%
|
6.96%
|
13.12%
|
13.26%
|
12.42%
|
| S&P 500 |
-12.93%
|
5.33%
|
15.54%
|
15.16%
|
14.51%
|
| Total Stock Market |
-13.79%
|
4.19%
|
13.69%
|
-
|
-
|
Source: Morningstar data as of 4/30/2001. Vanguard TSM fund launched April 1992. All returns for Investor Share class.
* annualized returns
Vanguard has indicated that Admiral Shares are designed to reward the efficiencies of large and long-standing accounts with low turnover. To discourage turnover in its index funds, Vanguard also filed to launch "Vipers" exchange-traded funds (ETFs) as a more suitable option for short-term traders. However, Vanguard lost the intellectual property battle with index provider Standard & Poor's (S&P). Vanguard has yet to indicate if it will appeal the decision, or if it will launch Vipers on its index funds not tied to S&P indexes, such as the Total Stock Market fund or its small-cap index funds.
In the meantime, Vanguard will continue its rollout of Admiral Shares, and expects to offer the share class for another 26 stock, balanced, and bond funds before the end of the year.
|