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Vanguard Drops The Hammer In ETF Fee War With 21 Price Cuts

ETF Professor


Vanguard, the second-largest U.S. issuer of exchange traded funds, is again wielding its low-cost sword.

On April 26, Vanguard said it's lowering fees on 21 of its ETFs, including its two largest funds, the Vanguard S&P 500 ETF (NYSE: VOO) and the Vanguard Total Stock Market ETF (NYSE: VTI).


What Happened

VTI and VOO are the third- and fourth-largest U.S.-listed ETFs, respectively, and are two of the four ETFs with more than $100 billion in assets under management. The $114.79 billion VTI is now charging 0.03 percent year, or $3 on a $10,000 investment, down from 0.04 percent. The $112.94 billion VOO also saw its annual fee reduced to 0.03 percent from 0.04 percent.

Including VOO and VTI, Vanguard announced lower fees on eight domestic ETFs. The following ETFs saw their fees reduced to 0.04 percent from 0.05 percent: The Vanguard Growth ETF (NYSE: VUG), the Vanguard Value ETF (NYSE: VTV), the Vanguard Large-Cap ETF (NYSE: VV) and the Vanguard Mid-Cap ETF (NYSE: VO).

The Vanguard Extended Market ETF (NYSE: VXF) saw its annual fee pared to 0.07 percent from 0.08 percent while the Vanguard High Dividend Yield ETF (NYSE: VYM) is charging 0.06 percent, down from 0.08 percent.


Why It's Important

As issuers have reduced fees across product lineups, international funds have steadily gotten cheaper. Nine international equity ETFs are part of the latest round of Vanguard fee reductions.

The following funds are now charging 0.09 percent, down from 0.10 percent: the Vanguard Total World Stock Market ETF (NYSE: VT), the Vanguard FTSE Europe ETF (NYSE: VGK) and the Vanguard FTSE Pacific ETF (NYSE: VPL).

The Vanguard Total International Stock ETF (NASDAQ: VXUS) and the Vanguard FTSE All-World ex-US ETF (NYSE: VEU) are now charging 0.09 percent, down from 0.11 percent.

The $72.16 billion Vanguard FTSE Developed Markets ETF (NYSE: VEA), the sixth-largest U.S.-listed ETF, saw its fee reduced to 0.05 percent from 0.07 percent, while the Vanguard FTSE All-World ex-US Small-Cap ETF (NYSE: VSS) saw a modest fee reduction of one basis point to 0.12 percent.

The Vanguard FTSE Emerging Markets ETF (NYSE: VWO) and the Vanguard Global ex-U.S. Real Estate ETF (NASDAQ: VNQI) both now charge 0.12 percent annually, down from 0.14 percent. Home to $65.35 billion in assets under management, VWO is the world's largest emerging markets ETF.


What's Next

Vanguard also lowered the fees on four fixed income ETFs. The Vanguard Emerging Markets Government Bond ETF (NASDAQ: VWOB) now charges 0.30 percent, down from 0.32 percent. The Vanguard Total International Bond ETF (NASDAQ: BNDX) also a fee cut of two basis points to 0.09 percent.

The Vanguard Total Bond Market ETF (NYSE: BND) and the Vanguard Tax-Exempt Bond ETF (NASDAQ: VTEB), Vanguard's first municipal bond ETF, both lowered fees by one basis point.

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