Index fund kingpin Vanguard Group of Valley Forge, Pa., has tinkered with the index tracking methodology it uses for its Vanguard Small Cap Index Fund. The move was driven by the fund's growth of assets under management; the fund has grown almost three-fold, from $1.7 billion at year- end 1996 to $4.9 billion today, according to Vanguard.

In a July 18 prospectus amendment filed with the Securities and Exchange Commission, Vanguard disclosed that as of July 1, it had begun following the "replication" method of tracking the Russell 2000 index for the fund. Under this method, Vanguard must hold each and every security that makes up the small cap index in proportion to its weighting within the index itself.

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