Vanguard to launch 19 ETF-style index funds

Vanguard Group, the biggest U.S. manager of stock and bond mutual funds, plans to start 19 index funds with a separate class of shares that can be traded on an exchange like stocks.

The company asked for permission on Thursday from the U.S. Securities and Exchange Commission to open the funds, which use market benchmarks to pick securities, Vanguard said. It also wants to add exchange-traded shares to the Vanguard 500 Index Fund, started in 1976 as the first index fund for U.S. individual investors.

The exchange-traded funds (or ETFs) will allow Vanguard to go "head-to-head" with market leaders BlackRock and State Street on Standard & Poor's and Russell indexes, said Daniel Wiener, who oversees $1 billion as chief executive of Adviser Investments.

Assets in U.S.-listed exchange-traded funds rose 57 percent to $830 billion in the year ended April 30, compared with a 41 percent increase for stock and bond mutual funds, according to the Investment Company Institute in Washington.

Stock and bond mutual funds held $8.37 trillion.

Vanguard is the largest U.S. provider of index funds to individual investors, with 58 funds managing $700 billion, said John Woerth, a Vanguard spokesman.

Vanguard had almost $1.4 trillion in assets under management as of May 31.