Vanguard Eliminates Share Class - Adviser Investments

Vanguard Eliminates Share Class

November 7, 2014

Vanguard Eliminates Signal Shares

At the end of October, Vanguard completed a process it announced a year earlier and closed down its high-minimum Signal share class for good. But this isn’t a sign of decay in Malvern or reason for investor dismay—it was simply another step in the fund giant’s efforts to simplify its fund lineup and cut costs for index investors.

The Signal share class was mostly geared toward larger, institutional or advisory investors with its $1 million buy-in requirement, and it offered lower expenses than Vanguard’s Investor and Admiral share classes in return. But as Vanguard began cutting costs and reducing minimums on its Admiral shares while adding new Admiral shares to existing funds over the last few years, that Signal share class became redundant. Hence the move in October 2013, when Signal shares were closed to new investors and eight funds had their Signal shares converted into new Admirals.

The final step took place on October 24, when 17 index funds’ Signal shares were merged out of existence into the affected funds’ Admiral shares. In the table below, we’ve listed those funds, their now-defunct Signal ticker symbols, their new Admiral symbols and their expense ratios, which had already been identical for the two share classes for some time.

 

Farewell, Signals

 

Fund Signal Ticker Admiral Ticker Expense Ratio
500 Index VIFSX VFIAX 0.05%
Balanced Index VBASX VBIAX 0.09%
Emerging Markets Stock Index VERSX VEMAX 0.15%
European Stock Index VESSX VEUSX 0.12%
Extended Market Index VEMSX VEXAX 0.10%
Growth Index VIGSX VIGAX 0.09%
Intermediate-Term Bond Index VIBSX VBILX 0.10%
Large-Cap Index VLCSX VLCAX 0.09%
Mid-Cap Index VMISX VIMAX 0.09%
Pacific Stock Index VPASX VPADX 0.12%
REIT Index VGRSX VGSLX 0.10%
Short-Term Bond Index VBSSX VBIRX 0.10%
Small-Cap Index VSISX VSMAX 0.09%
Total Bond Market Index VBTSX VBTLX 0.08%
Total International Stock Index VTSGX VTIAX 0.14%
Total Stock Market Index VTSSX VTSAX 0.05%
Value Index VVISX VVIAX 0.09%

Note: Expenses as of 9/30/14.
Source: Vanguard.

While this move is irrelevant to most individual investors, who would not have been able to invest in Signal shares on their own, one place where smaller investors may notice a change is in their 401(k) plans, where Signal shares were commonly used. Vanguard says that the only possible difference one might see in an account following the move is in the number of shares owned, as the Signal and Admiral shares in some cases had disparate NAVs. But investors’ overall dollar value invested in any affected fund should be the same post-transition.

 

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