Vanguard Total World Stock Index (ticker symbol: VTWSX) is now trading. Tracking the FTSE All-World Index, a benchmark of a bit under 3,000 stocks in 47 countries, it's the first global stock index fund at Vanguard, coming head to head with Global Equity (VHGEX), Vanguard's actively managed global fund. Duane F. Kelly and Ryan E. Ludt will co-manage the new fund from within Vanguard's indexing shop.

Like many of the Vanguard index funds, Total World Stock Index comes complete with ETF shares (ticker symbol: VT). The fund's investor shares come with a 0.25% front-end load (Vanguard calls it a "purchase fee") and a 45-basis-point expense ratio, while the ETF has a 25-basis-point expense ratio.

As with any Vanguard index fund with a front-end load, if you're investing anything more than a token amount, it pays to go with the ETF unless you'll be adding lots of additional investments that will push up your brokerage costs. At a minimum of $3,000 to invest in the fund, you'll pay $7.50 in front-end loads. If, like me, you pay just $8 per brokerage transaction, you don't have to be investing much to make the ETF pay off.

Speaking of loads, Vanguard also cut the front-end and back-end loads on Emerging Markets Index (VWO) to 0.25%, or 25 basis points, from 50 basis points, making the fund a bit more competitive with its ETF sibling. Plus, they've taken the 25-basis point front-end load off of World ex-US Index (VEU).

Despite the low fees on the new Total World Stock Index, I'm not sure this is the best way to go for global diversification. For a review of why, check out my story on page 12 of the May issue of The Independent Adviser for Vanguard Investors.