Personal Finance News
Vanguard to Add Morningstar Name to Several Index Funds
Dozens of Vanguard index funds and corresponding exchange-traded funds (ETFs) will soon see updated names.
About Vanguard’s Morningstar Update:
Soon, several Vanguard funds will adjust their official names to include Morningstar. The change will take place in July of this year and will impact all equity index funds that track Morningstar indexes. For example, the Vanguard Total Stock Market ETF ($VTI) will become the Vanguard Morningstar Total Stock Market ETF. A full list of funds and their new names can be found on Vanguard’s site.
These changes come on the heels of Morningstar completing its acquisition of the Center for Research in Security Prices (CRSP) from the University of Chicago. That $365 million transaction, which closed in February of this year, also led CRSP Market Indexes to be renamed Morningstar Indexes. At the time, Vanguard confirmed it would continue to use these indexes for its offerings.
Note that, when these updates take place, the underlying funds will not be affected. Vanguard states that all funds will retain the same investment objectives, with no changes to how they are managed.
What They’re Saying:
In a press release announcing the news, Vanguard Capital Management CIO and Head of Global Equity Rodney Comegys stated, “Index funds are designed to give investors broad, low‑cost exposure to the markets, and that starts with the quality of the benchmarks they track. The Morningstar Indexes incorporate disciplined, rules‑based approaches that align with Vanguard’s long‑standing views on index construction and help ensure our funds remain investable and representative over time.”
On the other end, Morningstar Indexes President Amelia Furr said, “At Morningstar Indexes, our focus is on building benchmarks that investors and asset managers can rely on over time. Our rules‑based approach, emphasis on investability, and thoughtful rebalancing practices are designed to support efficient implementation and long‑term investing—principles that align closely with Vanguard’s index investing philosophy.”
My Thoughts:
When I first saw this story, I assumed I had missed something and that Vanguard had acquired Morningstar. In reality, the situation is a bit more interesting than that. If the CRSP name had already been in these funds and were being swapped out for the updated Morningstar moniker, it would make sense. Instead, Vanguard is just now adding this co-branding.
Looking into it, Jonathan from My Money Blog has a theory that this move is meant to appease Morningstar and prevent them from raising the fee on these funds. That would make sense, given how often Vanguard emphasizes its low-cost options. If that is the case, it’s a bit unfortunate that they’d have to resort to that — although I don’t think that adding the Morningstar is such a bad thing. Besides, most people refer to these funds by their ticker symbol and not their full name.
So, while this is an intriguing development, I doubt it will end up making much of a difference. But we’ll see how it plays out starting in just a couple of months.
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