Vanguard Group will begin using the MSCI U.S. Broad Market index as the benchmark for its $57 billion Vanguard Total Stock Market Index, $7.3 billion Vanguard Balanced Index and $1.2 billion Vanguard Institutional Total Stock Market Index funds between April 1 and Dec. 31, according to John Demming, spokesman. The index will replace the Dow Jones Wilshire 5000. Vanguard, which first began using MSCI indexes as benchmarks to other funds in 2003, made the switch because officials for the company think the MSCI are better constructed and "to bring consistency to our index lineup," Mr. Demming said. Vanguard will switch other funds to MSCI if their funds' boards of directors think the change would benefit shareholders.
Including the new Vanguard indexes, more than $110 billion in total U.S. equity assets are benchmarked to MSCI indexes.
"We respect Vanguard's business decision but would note the Dow Jones Wilshire 5000 remains the only index that ensures total coverage of the U.S. equities market for U.S. investors," said Kim Shepherd, spokeswoman for Wilshire Associates.