Author Topic: Replacement for closed VDMIX/VDMAX  (Read 6725 times)

dbenamy

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Replacement for closed VDMIX/VDMAX
« on: January 10, 2014, 03:08:07 AM »
Hey all,

Do you have any suggestions to replace Vanguard's Developed Markets Index Fund (VDMIX/VDMAX)?

I was planning to buy some based on MMM's recommendation in http://www.mrmoneymustache.com/2012/02/17/book-review-the-intelligent-asset-allocator/ but the fund just closed.

A Vanguard rep told me that this sometimes happens if a fund can't spend its money fast enough and that if that's the case, they may reopen it. But he didn't know if and when that would happen.

Some possible alternatives are:
- Vanguard European Stock Index Fund (VEURX/VEUSX) - 0.12% ER - likely contender but I guess I'd lose some of the invest-in-everything-goodness by excluding other countries from the EAFE index.

- Vanguard Tax-Managed International Fund (VDVIX/VTMGX) - 0.10% ER - "uses a tax-efficient approach to track the investment performance of FTSE Developed ex North America Index, an unmanaged benchmark representing international stocks" - this sounds like a good replacement although I don't know what the tax-efficient bit is all about.

- Vanguard Global Equity Fund (VHGEX) - 0.59% ER so probably not a great option unless there's reason to believe it will make more money.

- Vanguard International Value Fund (VTRIX) - 0.41% ER - also pretty expensive.

- Vanguard Canada has the FTSE Developed ex North America Index ETF (VDU) but I don't see anything like this on the US site.

Cyrano

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Re: Replacement for closed VDMIX/VDMAX
« Reply #1 on: January 10, 2014, 04:46:36 AM »
VDMAX and VTMGX are in the process of merging. According to Vandguard's press release, the two funds track the same index, and in practice Developed Markets had been just as tax efficient as Tax Efficient International (minimized cash distributions) so they are going to merge the funds. Somewhat confusingly, while the press release says that the merged fund will keep the Developed Markets name, VDMAX is the one they closed to new investment.

kyleaaa

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Re: Replacement for closed VDMIX/VDMAX
« Reply #2 on: January 10, 2014, 11:05:27 AM »
To answer your question, Total International Stock Index fund would be the most reasonable substitute.

dbenamy

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Re: Replacement for closed VDMIX/VDMAX
« Reply #3 on: January 13, 2014, 05:59:16 AM »
Thanks for the info!

TPLFIRE

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Re: Replacement for closed VDMIX/VDMAX
« Reply #4 on: January 25, 2014, 11:46:50 AM »
Hello dbenamy,

I see that although VTIAX has a higher expense ratio (10 vs 16%) than VTMGX, it also has way more number of stocks than VTMGX.  I was wondering what did you end up buying and what were your considerations of choosing it?