Vanguard next month will introduce a new share class for institutional clients, called Signal Shares. The new class will initially apply to 12 equity and fixed-income index funds, with fees ranging between nine and 13 basis points. Eventually, Vanguard will apply the share class to more of its funds.

Signal Shares are aimed at pension plans, endowments and financial advisers. It is Vanguard's third share class designed for institutional investors and its fifth altogether. Minimum investments in Signal Shares will range from $1 million to $10 million.

This is the first time that Vanguard has introduced a new share class since the introduction of its Admiral Shares in 2000, aimed at customers with large account sizes. Daniel P. Wiener, editor of The Independent Adviser for Vanguard Investors, told The Philadelphia Inquirer the new share class makes sense from a marketing standpoint, much like rolling out various models of a car. "They're filling in their product line, like Chrysler and Dodge have a different brand for the same car," Wiener said.

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