For release 10 February 2006

Indexing specialist Vanguard Investments Australia Ltd's (Vanguard) international property securities index funds (hedged and unhedged) were Recommended by Morningstar as at 2 January 2006.

In its research, Morningstar described Vanguard's model as a "thoughtful, cost-effective index approach", commenting that Vanguard's speciality is "its ability to manage index changes and dividend payments to add value over the benchmark."

Eric Smith, Vanguard's chief investment officer acknowledged the Morningstar Recommendation as welcome independent affirmation of Vanguard's international property capability.

"Indexing is particularly well-suited to listed property securities, where the relatively narrow range of returns provides few opportunities for active managers to add value", Mr Smith said.

"We are also pleased with the early uptake by investors in these funds, and a recent offshore mandate from a large European pension fund."

In early 2005, Vanguard implemented its first international property securities portfolio, drawing on its proven expertise in Australian listed property securities and international equities. Vanguard currently manages more than A$1.0 billion (funds under management) for local and international investors in international property strategies.

Launched in September 2005, the Vanguard International Property Securities Index Fund and the Vanguard International Property Securities Index Fund (Hedged) track the UBS Global Real Estate Investors Index ex-Australia. In line with the index, the funds comprise approximately 230 securities, listed on the exchanges of 20 of the world's major economies. The funds already hold more than A$150 million.

The Morningstar Recommendation follows a separate, five star rating of Vanguard's Australian property securities index fund by Navigator Research. Vanguard was the only fund manager to be awarded a prestigious five star rating out of 15 peers by Navigator.

* as at 2 January 2006

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Notes to Editors:

The UBS Global Real Estate Investors Index ex-Australia is a free-float* adjusted, capitalisation-weighted index comprising approximately 230 property securities listed on the exchanges of 20 of the world's major economies, excluding Australia. The property securities contained within the Index are trusts and companies that own real estate assets and derive a significant proportion of their revenue from rental income.

*Free-float is the proportion of issued securities that UBS (the Index provider) considers readily available to foreign investors.

Vanguard Investments Australia is one of Australia's largest managers of listed property securities, managing in excess of A$4.3 billion across the international and domestic listed property asset classes.

Vanguard manages more than A$1.0 billion invested in international property securities, of which over A$150 million is invested through Vanguard's international property securities index funds.

Since its inception in March 1998, Vanguard's Australian property securities index fund has attracted A$2.0 billion in funds under management.

Vanguard Investments Australia Ltd is a wholly owned subsidiary of The Vanguard Group, Inc., which is based in the U.S. and currently manages approximately US$953 billion (A$1.2 trillion) for more than 18 million individual and investor accounts as at 31 January 2006. In Australia, Vanguard has established a reputation as an index specialist, managing A$37.4 billion in index funds, for both institutional and retail investors.

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