The low-fee fight continues. On the heels of reports that Vanguard had more global net inflows than all of the other fund companies combined, the company claims it’s expense ratio reductions saved $143 million for investors in its mutual funds and ETFs. Might there be a connection?
The Valley Forge, Pennsylvania-based investment giant reported lower expense ratios for 68 additional mutual fund and ETF shares, saving clients more than $105 million.
“Led by notable decreases in some of the industry’s largest international exchange-traded funds (ETFs), this third wave of reductions represents a cumulative $143 million in savings across 124 fund shares reported over the last three months,” it said.
“While Vanguard is lowering—and will continue to lower—the cost of investing, the so-called fee war is essentially over on the beta battleground. Investors have won,” Vanguard CEO Bill McNabb, said in a statement. “The new fronts in the fee war are active management and advice. Again, investors will ultimately win.”
Vanguard has been lowering expense ratios across its product line-up, and all of its funds and ETFs are among the lowest cost in their respective categories.
“The demand for low-cost funds and ETFs, along with intense competition, have made investing far more affordable today than ever before,” added McNabb. “With the broad availability of low-cost options, investors – whether on their own or with the help of a financial advisor or employer – need to focus on the other factors that can lead to investing success, including saving more, developing a suitable asset allocation, using broadly diversified funds, and maintaining discipline through market ups and down.”
Ten Vanguard international ETFs are reporting lower expenses, including five that are the largest in their category (VWO, VGK, VPL, VT, and BNDX) and two that are the second largest in their category (VNQI and VSS), as follows:
- Vanguard FTSE Emerging Markets ETF (VWO) declined one basis point to 0.14 percent.
- Vanguard FTSE Europe ETF (VGK) declined two basis points to 0.10 percent.
- Vanguard FTSE Pacific ETF (VPL) declined two basis points to 0.10 percent.
- Vanguard Total World Stock ETF (VT) declined three basis points to 0.11 percent.
- Vanguard Total International Bond ETF (BNDX) declined three basis points to 0.12 percent.
- Vanguard Global ex-U.S. Real Estate ETF (VNQI) declined three basis points to 0.15 percent.
- Vanguard FTSE All-World ex-US Small-Cap ETF (VSS) declined four basis points to 0.13 percent.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
