Vanguard International Fund (VTIAX)

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Topic Author
tennis5
Posts: 17
Joined: Mon Nov 13, 2017 4:20 pm

Vanguard International Fund (VTIAX)

Post by tennis5 »

Hello,

I own VG Fund VTIAX. My question is how is this fund priced given the time zone differences (the overseas markets are closed when the us market opens). Today, Thursday, am I getting the closing price of the International stocks which are closed this morning?

Thanks ~ Tennis5
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
livesoft
Posts: 86080
Joined: Thu Mar 01, 2007 7:00 pm

Re: Vanguard International Fund (VTIAX)

Post by livesoft »

A white paper on the subject found at vanguard.com: https://institutional.vanguard.com/iam/pdf/FVTRANSC.pdf

If one uses the search term "fair value pricing", then one can find more such explanations if needed as the one above is not too detailed.

Also realize that the cognate ETF of VTIAX is VXUS and it trades during the day in the US. In any case, VTIAX is NOT getting the closing prices of international stocks in their home stock markets.
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Topic Author
tennis5
Posts: 17
Joined: Mon Nov 13, 2017 4:20 pm

Re: Vanguard International Fund (VTIAX)

Post by tennis5 »

Thank you livesoft for your timely response.

Fair value pricing in theory make sense to me i.e., VG international funds are priced based on the most up to date information.

However, in practice why not forget about the fair value adjustment and just price the fund based on the close of the international stocks? This would insure the VG international funds are in agreement with benchmarks and eliminate the need to calculate and track the fair value pricing adjustment.

In addition, probably easier to program the international funds based on closing prices which may lower VG's administrative costs :happy
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
livesoft
Posts: 86080
Joined: Thu Mar 01, 2007 7:00 pm

Re: Vanguard International Fund (VTIAX)

Post by livesoft »

The reason that fair value pricing was implemented is that before implementation some people would use the stale prices of international mutual funds to take advantage of other investors. That alone should answer your "Why not forget about ...?" question.
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Topic Author
tennis5
Posts: 17
Joined: Mon Nov 13, 2017 4:20 pm

Re: Vanguard International Fund (VTIAX)

Post by tennis5 »

I’m not understanding this comment.

If the fund pricing rules are universal and apply to ALL Investors then how’s does some investors benefit?
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
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