The Vanguard Group has decided to do away with the "VIPERs" moniker its exchange traded funds have carried since their 2001 inception. It's a big decision, and one that hints at certain difficulties the low-cost pioneer may be encountering with its ETF operation.

As of Thursday, the company's range of ETFs -- known to date as the Vanguard Index Participation Equity Receipts -- will be called, more mundanely, the Vanguard ETF Shares. The company revealed the switch in an SEC filing Wednesday.

What does this mean? From the beginning, Vanguard has built its identity around low-cost funds, so getting involved with index funds made sense (according to the 2006 Money Management Directory, indices now represent just about half of the firm's $886 billion in assets under management). From the firm's prime position among indexers, it was a short step to ETFs.

But Vanguard's ETFs are not the cheapest to be had, and Vanguard lacks the scale necessary to wage a Walmart-style price war against the likes of neck-and-neck ETF leaders Barclays Global Investors, which manages $1.4 trillion in assets, or State Street Global Advisors, boasting $1.367 billion.

Large and successful companies usually answer such dilemmas with a dose of high-intensity branding. This is where the "Vipers" nickname should have come in handy: with the "Diamonds" and the "Spiders" reaching for the obvious gems and arachnids to back up their names, a few snakes wouldn't have gone amiss in the pages of glossy financial magazines.

Vanguard didn't go in that direction. Recent print ads, for example, have featured the letter "V" formed by items like two rolls of coins or a green stapler -- hardly anything like a unified theme. Nor did marketers hit on a clear way of connecting "Vipers" to the company's overarching trope, Admiral Nelson's vessel. Little knack for the branding game seems a weak point in Vanguard's corporate DNA.

This week's name change all but confirms that the Vipers have not performed as company leaders might like. A licensing battle with Standard & Poor's marred the products' launch (read more about that on thestreet.com), and it may be that not offering S&P 500 products dulled the Vipers' competitive edge from the get-go. In any case, though, no company -- especially not one famously cost-conscious -- abandons years of expensive brand-building without good reason: "the Vipers" need more bite.

It's hard to imagine "Vanguard ETF Shares" providing that revitalizing kick, but then again, the "Vanguard" name itself carries plenty of heft -- nor is highlighting that these are all-the-rage, exchange traded products a bad idea, either. Taking a safer and less dramatic approach is probably in line with Vanguard's style -- but it remains to be seen whether this kind of straight sailing will win the company better results in the ETF race. 

Stay ahead of the news ... Sign up for our email alerts now
CLICK HERE