If you follow my model ETF portfolios, you may have noticed that one of your holdings has a new name.

The Vanguard FTSE All-World ex Canada (VXC), launched in the summer of 2014, is a simple, low-cost way to get exposure to stocks in the US as well developed and emerging markets overseas. Now VXC has evolved to cover even more of the global equity market, and further expansion is planned for the coming months. To reflect these changes, the fund recently changed its name to the Vanguard FTSE Global All Cap ex Canada Index ETF. The ticker symbol remains unchanged.

VXC is an “ETF of ETFs” with four underlying holdings: the Vanguard Large-Cap (VV), the Vanguard FTSE Europe (VGK), the Vanguard FTSE Pacific (VPL), and the Vanguard FTSE Emerging Markets (VWO). The latter three ETFs recently adopted new benchmark indexes that include small-cap stocks as well as large- and mid-caps. As a result, the total number of stocks held by VXC has swelled from just over 3,000 at the end of August to more than 5,100 today.

The addition of all those stocks makes VXC more diversified than ever, though the numbers are a bit deceiving. Since the 2,000-plus newly added stocks are all small companies, they don’t exert as much as influence as you might expect: small-caps now make up only about 6.5% of the fund by market cap, while those considered “small/medium” make up another 13%. Think of it like adding a bucket of pebbles to a pile of boulders. Sure, there are now many more objects, but the overall proportion haven’t changed very much.

More growth is on the horizon for VXC: its emerging markets index will gradually expand to add more and more China A-Shares. These are Chinese companies that trade on the Shanghai and Shenzhen exchanges and were previously off-limits to foreign investors. Those restrictions are now being relaxed, and in the coming months, emerging markets benchmarks will begin incorporating more A-Shares, giving China a larger share of index funds such as the VWO and, by extension, VXC.

One question remains unanswered: will Vanguard eventually replace the large-cap US equity fund in VXC with one that also holds mid- and small-cap stocks? Or perhaps add other US equity ETFs to cover those bases? With VXC’s new “all cap” mandate, this would make sense. However, replacing its current holding in VV with, say, the Vanguard Total Stock Market (VTI), would result in a sizable capital gain being passed along to VXC investors. That’s a good reason not to make the switch.

Arresting developments

The changes FTSE is making to their indexes will also affect the Vanguard FTSE Developed Markets (VEA), a US-listed ETF that remains popular with Canadians. Not so long ago, this ETF tracked the MSCI EAFE Index, the best-known benchmark for developed markets overseas. It later adopted a FTSE index that had a similar mix of countries in Europe and Asia, as well as Australia. Now the fund is changing indexes again: it will soon track the FTSE Developed All Cap ex US Index, which includes a roughly 7% allocation to Canada. If you’re a Canadian using VEA for your international equity holdings, that’s not ideal, since you’re already getting your Canadian exposure elsewhere.

But here’s a situation where the math reveals this is a trivial concern. Say you’ve allocated 20% of your portfolio to Canadian equities and another 20% to international. The additional Canadian content in VEA would change your mix to 21.4% Canadian and 18.6% international. That’s an insignificant difference—indeed, normal fluctuations in the stock markets and currency exchange rates can move you that far off target in any given day.

If you hold VEA in a non-registered account, selling it and realizing a capital gain isn’t worth it, but if your holdings is down in value, you could take this opportunity to do some tax-loss harvesting. If you hold it an RRSP, you might just wait until the next time you need to rebalance, when you’ll be making some trades anyway. A good replacement in both cases—assuming you want to continue using a US-listed fund—would be the iShares Core MSCI EAFE (IEFA).

Once VEA’s changes have been implemented, expect more rejigging at Vanguard Canada. The Vanguard FTSE Developed ex North America (VDU), as well as its currency-hedged counterpart, uses VEA as its underlying holding, so it will get a name change. Vanguard has also announced that in December it will launch a new ETF, the Vanguard FTSE Developed All Cap ex North America (VIU), as well as a currency hedged version with the ticker VI. These funds will presumably use VGK and VPL as their underlying holdings, thereby avoiding Canada.