Vanguard has adopted new Morgan Stanley Capital International (MSCI) indexes for seven of its funds, including the $7.4 billion Vanguard Growth Index Fund. As Mutual Fund Market News reported in September, these replace indexes from Standard & Poor’s on six of the funds, and the Russell 2000 Index on the $4 billion Vanguard Small-Cap Index fund.

But the firm’s giant $66.8 billion Vanguard 500 Index Fund will continue to use the S&P 500 index.

Gus Sauter, Vanguard’s chief investment officer, said over the long term the new indices will bring lower turnover and moderately lower transaction costs. But in the transition period, turnover of affected funds will range between 20% and 70%, increasing transaction costs.

"The biggest change is that they are adding more tech on the growth side and taking tech out on the value side," Daniel Wiener, editor of The Independent Adviser for Vanguard Investors, told Reuters.

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