Vanguard Cuts Fees On VTI, VBR; Ups On VOE

By
April 12, 2013
Share:

Assets and acquired fund fees are behind the latest revisions to ratios on VTI, VBR and VOE.

Vanguard, the third-largest U.S. ETF provider by assets, reported lower expense ratios effective immediately on two of its funds, including the $231 billion Vanguard Total Stock Market ETF (NYSEArca: VTI), and it also said the expense ratio on a third ETF has gone up.

VTI’s annual fee dropped 16.6 percent, to 0.05 percent a year, while the annual expense ratio on the $8.9 billion Vanguard Small Cap Value ETF (NYSEArca: VBR) fell 4.75 percent to 0.20 percent, or $20 for each $10,000 invested.

Meanwhile, the expense ratio on the $2.9 billion Vanguard Mid-Cap Value ETF (NYSEArca: VOE) is now higher—0.12 percent—a 20 percent increase from the previous fee of 0.10 percent.

VTI’s lower expense ratio seems to be the result of asset growth, as the fund broke through $230 billion in AUM in the past six months partly due to net inflows of more than $3.5 billion. Its share price gained 11.8 percent in that period.

The changes in costs in the other two funds are not linked to asset flows, but rather to changes in acquired fund fees and expenses tied to the funds’ investments in business development companies (BDCs).

“Although the SEC requires that BDC costs be included in a fund’s expense ratio, these fees are not incurred by the fund,” Vanguard said on its website. “They have no impact on a fund’s total return or on its tracking error relative to an index.”

Still, VBR and VOE have seen net inflows of $415 million and $387 million, respectively, in the past six months. The funds have also performed well, posting gains of 14.75 and 16.9 percent, respectively.


ETF.COM CHANNELS

Want to learn more about smart-beta ETFs? Check out our smart-beta guide, essentials library and ETF screener!

ETF DAILY DATA

International equity funds like 'IEMG' led inflows on Monday, May 18, as rising markets lifted U.S.-listed ETF assets to a record $2.174 trillion.

'SPY' and 'GLD' paced SSgA's issuer-leading outflows on Monday, May 18, as rising markets lifted total U.S.-listed ETF assets to a record $2.174 trillion.

ETF.COM ANALYST BLOGS

By Olly Ludwig

Yields will one day head higher, so is it time to get bond exposure outside the U.S.?

By Rachael Revesz

Stop dancing around the subject, call women ‘women’ and let’s be a more visible part of this industry.

By Olly Ludwig

It’s no secret that hedge funds love ETFs, but what’s less appreciated is that their love of ETFs will likely spell their demise.

By Olly Ludwig

Yes, bond yields are ticking higher these days, but it’s important to keep the whole yield-curve picture in mind.

ETF INDUSTRY PERSPECTIVE

By Nasdaq Global Indexes

Bond exposure or bond performance? Only defined maturity indexes provide the latter.

By Invesco PowerShares

Invesco PowerShares and Market Strategies International’s second annual survey provides vital insights about smart beta and ETFs overall.

By Invesco PowerShares

Investors are implementing smart-beta exchange-traded funds (ETFs) in their portfolios in a variety of ways and for different reasons.