Vanguard to Adopt MSCI US Broad Market Index

Assets benchmarked to MSCI US Equity Indices to increase by more than $60 Billion

NEW YORK - Feb. 1, 2005 -- MSCI, a leading provider of U.S. equity, international equity, fixed income and hedge fund indices, announced today that The Vanguard Group has decided that they will adopt the MSCI US Broad Market Index as the target benchmark for index funds with assets totaling more than $60 billion (as of 12/31/04). This adoption will signify a marked increase in the total assets benchmarked to the MSCI US Equity Indices to more than $110 billion.

"Vanguard's pending adoption is a significant advancement in the growing market acceptance of the MSCI US Equity Indices," said Ken O'Keeffe, executive director at MSCI. "Currently, we have approximately $50 billion benchmarked to our U.S. indices from Vanguard and a growing number of institutional investors. Vanguard’s move will more than double that number. Our benchmarks are built for professional users who demand indices that broadly and fairly reflect the U.S. equity market, yet are replicable and have low turnover."

Vanguard’s Chief Investment Officer, Gus Sauter, explained, "We feel that MSCI’s US Broad Market Index is a well-constructed index that will enhance our all-market index fund offerings. With the addition of this index, we will now offer 21 U.S. equity index funds tracking MSCI benchmarks."

The MSCI US Broad Market Index offers several advantages vs. competing total market indices including:

· The broadest market capitalization coverage of any total market index. MSCI includes certain U.S. companies that are domiciled outside of the U.S. such as Tyco International, Accenture LTD and Ingersoll-Rand in its US Equity Indices.

· Investability screens that help to ensure the investability and replicability of the index, such as free float adjustment of index constituents, liquidity and minimum market capitalization screens.

The MSCI US Broad Market Index has been calculated since May 30, 2003. The Index is the aggregation of the MSCI US Large Cap 300, Mid Cap 450, Small Cap 1,750 and Micro Cap Indices. The Broad Market Index represents approximately 99.5% of the market capitalization of the U.S. equity market and includes approximately 3,900 companies.

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