Vanguard Extended Market Index Fund
From Bogleheads
| Company: | Vanguard |
|---|---|
| Fund category: | US Mid Cap Stocks |
| Benchmark: | S&P Completion Index |
| Start date: | 12/21/1987 |
| Expense ratio: | 0.24% |
Vanguard Extended Market Index Fund presently tracks the S&P Completion Index. According to the fund's PROSPECTUS,
The Fund employs a "passive management"--or indexing--investment approach designed to track the performance of the Standard & Poor's Completion Index, a broadly diversified index of stocks of small and medium-size U.S. companies. The S&P Completion Index contains all of the U.S. common stocks regularly traded on the New York and American Stock Exchanges and the Nasdaq over-the-counter market, except those stocks included in the S&P 500 Index. The Fund invests all, or substantially all, of its assets in stocks of its target index, with nearly 80% of its assets invested in 1,200 stocks in its target index (covering nearly 80% of the Index's total market capitalization), and the rest of its assets in a representative sample of the remaining stocks. The Fund holds a broadly diversified collection of securities that, in the aggregate, approximates the full Index in terms of key characteristics. These key characteristics include industry weightings and market capitalization, as well as certain financial measures, such as price/earnings ratio and dividend yield.
The Fund Holdings page on the Vanguard website reports that as of 10/31/2008, the fund invests in 3,108 stocks, while the benchmark index includes 3,772.
Contents |
Share Classes
Three share classes are available to individual investors:
- Investor (VEXMX), with an expense ratio (ER) of 0.24% and an initial minimum investment of $3,000
- Admiral (VEXAX), with an ER of 0.09% and a minimum investment of $100,000, except $50,000 suffices for conversion of an Investor Shares account in existence 10 years
- ETF (VXF), with an ER of 0.08% and no minimums, though transaction costs apply in buying and selling through a brokerage
Total costs of the ETF and open-end classes may be compared via this Vanguard calculator.
Two additional share classes are offered through some workplace retirement plans:
Advantages
Low Expenses
The Vanguard Extended Market Index has very low expense ratios:
| Share Class | Expense Ratio | Average Fund ER |
| Investor Shares | 0.24% | 1.83% |
| Admiral Shares | 0.09% | 1.83% |
| ETF Shares [1] | 0.08% | 0.20% |
| Signal Shares | 0.09% | 1.83% |
| Institutional Shares | 0.06% | 1.83% |
[1] iShares Russell Mid Cap and iShares S&P 400 ETFs.
The fund paid $1,051,000 in brokerage commissions in fiscal year 2007, which produced a Commission Ratio (CR) of 0.008%.
Criticisms
Performance
This historical returns webpage provides VEXMX performance for each of the 15 full calendar years the fund has been in existence. During this 1993-2007 period, the fund had an average annualized return of 10.81%. Its best calendar year result was +43.43% (2003), and its worst was -18.06% (2002). Its tracking error relative to its benchmark varied from -0.41% (2003) to +1.05% (1997).
History
Inception dates of the various share classes are as follows:
- Investor: 12/21/1987
- Institutional: 07/07/1997
- Admiral: 11/13/2000
- ETF: 12/27/2001
- Signal: 09/01/2006
The fund's fiscal year ends on 12/31 of each year.
The fund made a minor change of benchmark on 06/17/2005, moving from the Dow Jones Wilshire 4500 Index to the S&P Completion Index.
The fund had a 0.50% purchase fee until 10/31/1997 and a 0.25% purchase fee from 11/01/1997 through 03/26/1998.
Link
- Vanguard Index Fund Tax Attributes FY-2007 (monograph by Barry Barnitz) contains tax data on the fund
- Vanguard Extended Market Index Fund accounting data
