Vanguard recently announced they've cut the front-end and back-end loads (what they call "purchase" and "redemption" fees) on Emerging Markets Index (VEIEX) to 0.25%, or 25 basis points, from 50 basis points, making the fund a bit more competitive with its ETF sibling, VWO.

Plus, they've taken the 25-basis point front-end load off of World ex-US Index (VFWIX, VEU).

So when it comes to Vanguard's international index funds, should you buy the investor shares or the ETF shares?

When it comes to Vanguard index funds with front-end loads, I've long advised my subscribers to buy the ETF shares rather than the investor shares, for two reasons.

First, contrary to what Vanguard may call them, the front-end and back-end "fees" on investments in some of their funds are indeed loads.

Consider a $10,000 investment in Emerging Markets Index. After the 0.25% fee, your original $10,000 becomes a $9,975 investment. If the fund produces a 9% annualized return over the next 36 months, your account will be worth $12,918.

That's a 29.2% return on your original investment. Not bad.

But consider that without the front-end load, your account would be worth $12,950, a 29.5% gain. The $32 difference on a $10,000 investment is worth 0.3% over just three years. As Vanguard likes to say, that can really add up over time when you consider the effects of compounding.

The moral of the story is…