31 December 2006
While emerging markets have produced stellar results over the past few years, they come with higher volatility than their more mature counterparts. One of the lower risk ways to gain exposure to a diversified range of developing markets is through an emerging markets index fund. The Vanguard%AE Emerging Markets Shares Index Fund invests in around 700 securities from more than 20 countries across Asia, Latin America, Europe, Africa and the Middle East so it is highly diversified. Vanguard's optimised indexing approach minimises trading costs and takes advantage of inefficiencies in benchmark changes providing opportunities to add value. This combined with its low annual management cost of 0.56% make it an excellent way for investors to access some of the world's fastest growing markets.
Competitive performance
The table below shows the performance of the Vanguard Emerging Markets Shares Index Fund compared with the fund's index, a modified MSCI Emerging Markets Index for the periods ending 31 December 2006. As you can see, our optimised indexing approach has exceeded its investment objective for each period shown.
Diversification
Including emerging markets shares in an international shares portfolio has several major benefits for investors. It:
* increases diversification, which lowers risk;
* there is less correlation between countries with emerging markets;
* increased diversified exposure at lower cost; and
* a greater opportunity for higher returns without drastically increasing the overall risk.
Vanguard's Emerging Markets Shares Index Fund invests in around 700 securities across 23 countries.
Low costs
In addition to offering low management costs, we aim to reduce costs at every stage of the investment process. Lower costs can translate into better performance for investors over the long term.
Vanguard's optimised approach to indexing provides three distinct cost advantages
:
1. Lower turnover levels than active and fully-replicated index funds save on trading costs.
2. Owning less securities than a fully replicating approach means lower brokerage and custody costs.
3. Our disciplined approach to managing corporate actions, capital flows and liquidity minimises costs.
What more could you ask for?
Vanguard's Emerging Markets Shares Index Fund provides access to a broad range of securities across 23 countries - offering a great way to further diversify your portfolio at low cost.
Fast Facts - 31 December 2006
Investment objective
Seeks to match the total return of a modified MSCI Emerging Markets Index (with net dividends reinvested) on an unhedged basis before taking into account Fund fees and expenses.
Fund Size
$542.1 million
Wholesale Management Costs
0.56%
Platform Access*
* BT Wrap
* Macquarie Wrap
* NetWealth
* Oasis
Ratings
Standard & Poor's 3 stars
* This is not an advertisement for the platforms listed. Please refer to the PDS issued by the platform operator. The following research house is referred to in the above Fund profile: Standard & Poor's Information Services (Australia) Pty Limited ABN 17 096 167 556. The ratings and recommendations referred to in this presentation are only the opinions of the research house and are provided for information purposes only and are not advice. All ratings and recommendations are subject to change without notice. They do not take into account your circumstances or needs so you should consider your circumstances and seek professional advice before making an investment decision. The research house accepts no liability whatsoever in connection with the ratings and recommendations, subject to law. Contact the relevant research house or their website for additional information, such as their Financial Services Guide. The research house receives a fee from Vanguard to review Vanguard funds using comprehensive criteria. **Past performance is not a reliable indicator of future performance.
