Fees on nearly two dozen Vanguard funds should decrease over the long term due to a switch in the funds' indexes, although it's too early to say if Vanguard's already low-priced international ETF's will be the lowest priced in the market.

Over the next several months Vanguard will replace the underlying MSCI benchmarks for 22 index funds--six international stock index funds representing $170 billion in assets will track benchmarks in the FTSE Global Equity Index Series, while 16 U.S. stock and balanced index funds with combined assets of $367 billion will follow the new CRSP benchmarks developed by the University of Chicago's Center for Research in Security Prices.

Some transaction costs will increase in the short term but Vanguard hopes to offset them with other efficiencies, says Joel Dickson, senior ETF strategist of Vanguard Investment Strategy Group.

"Vanguard's corporate structure offers at-cost funds for investors that bring prices down," says Dickson. "Across the board we have a few more international companies with FTSE but the change is minor."

The change from MSCI to FTSE that has drawn the most attention is FTSE's classification of South Korea as a developed market. MSCI classifies it as an emerging market.

This could impact the asset allocation for investors in the popular Vanguard Emerging Markets Stock Index Fund and the accompanying VWO ETF share class, both of which will move from the MSCI Emerging Markets Index to the FTSE Emerging Index.

Dickson says the reclassification puts Vanguard ahead of the curve, although some indexes already have classified South Korea as a developed market.

MSCI's top five emerging markets are China, Brazil, Taiwan, South Africa and South Korea. FTSE's are the same except for the omission of South Korea, which is replaced by India in the top five.

Sector selections show only minor differences, Dickson says, because the major industries are part of both indexes. FTSE includes heavy weightings in banks, oil and gas, telecommunications, basic resources and technology, while MSCI includes financials, energy, materials, information technology and consumer staples--although not in the same percentage mix.

Vanguard's index switch for 16 U.S. stock and balanced index funds to the new CRSP index involves Vanguard's largest index fund, the Vanguard Total Stock Market Index Fund and its ETF Shares (VTI). But that has raised much less controversy than the international switch because domestic indexes are more closely aligned with each other and that means less change, Dickson says.

--Karen DeMasters