Will Vanguard's [profile] index switch turn off investors who feel strongly that South Korea is an emerging, rather than a developed market?

Time will tell. But TheStreet's Ron Rowland wrote an in-depth guide for investors puzzled over Vanguard's recent index switch, and he goes straight to the point:

"Should you fire Vanguard as your fund advisor" following the index switch?

Rowland's answer is a bit involved. If you're an investor who's firmly committed to MSCI's method of classifying international equities, i.e., part of a group that makes up approximately one-one millionth of one percent of all retail investors (though perhaps a higher proportion of TheStreet's readers), Rowland says that yes, "you will need to fire Vanguard, at least for some of your holdings."

But his advice is to do a little bit of homework and not simply choose the cheapest investment vehicle. And he's skeptical that Vanguard can compete successfully on any factor but price.

"At expense ratio differences of less than 0.1%, other factors become more important. Vanguard has been very successful in the past when competing on price, but it is now moving the battlefield to other, less quantifiable factors. Time will tell whether that prior success moves as well" 

Edited by: Chris Cumming


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