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Market Update

Not All Kinds of Index Funds Interest Vanguard

You probably won't see a micro-cap or foreign small-cap fund, CEO says.

Despite interest from investors, The Vanguard Group remains reluctant to offer new index funds tracking tiny stocks, international-small companies, the Nasdaq 100, or foreign and municipal bonds. While the Valley Forge, Penn.-based firm has considered creating offerings in some of these areas, rolling out such funds are not "front-burner issues" for the company, said Vanguard chairman and chief executive John J. Brennan in a recent Morningstar.com Expert Q&A. "Demand is not necessarily a good reason to offer a new fund," he said.

Brennan, who is chairman of the nation's leading mutual-fund-industry trade group, the Investment Company Institute, also defended Vanguard's new Admiral share class and said the current practice of twice-a-year mutual-fund portfolio disclosure is adequate.