Daily ETF Watch: Firms Cut Fees
Vanguard, always known to be a low-fee ETF provider, has trimmed the fees on six of its most widely used ETFs. The new fees, each 1 basis point lower than before, are included in the information below:
Vanguard, always known to be a low-fee ETF provider, has trimmed the fees on six of its most widely used ETFs. The new fees, each 1 basis point lower than before, are included in the information below:
| Vanguard ETF | Fee Cut (bps) | New Expense Ratio | Assets ($B) |
| Emerging Markets Government Bond (VWOB | C-39) | 1 | 0.34% | 0.3 |
| FTSE All-World ex-US (VEU | B-98) | 1 | 0.14% | 12.9 |
| FTSE All-World ex-US Small-Cap (VSS | B-90) | 1 | 0.19% | 2.2 |
| Global ex-U.S. Real Estate (VNQI | B-75) | 3 | 0.24% | 2.5 |
| Total International Bond (BNDX | B-57) | 1 | 0.19% | 3.6 |
| Total World Stock (VT | A-100) | 1 | 0.17% | 4.1 |
All but one of the fee cuts became effective on Feb. 26; VWOB's new expense ratio became effective Feb. 25. The price reductions are a result of the firm's economies of scale: As funds gather assets, their expenses tend to go down in proportion to the amount of money managed. Vanguard returns that saved money to its investors through expense ratios cuts.
Charles & Fidelity Cut Fee Too
Charles Schwab and Fidelity also trimmed fees on two funds.
The $278million Schwab Intermediate-Term U.S. Treasury ETF (SCHR | A-67) saw its fee cut by just 1 basis point to 0.09 percent, according to a recent filing. That puts it just below the SPDR Barclays Intermediate Term Treasury ETF (ITE | A-99), which still costs 10 basis points; SCHR is now the cheapest fund in that particular space.
Meanwhile, Fidelity lowered the expense ratio for the Fidelity MSCI Financials ETF (FNCL | A-95) by 4 basis points to 0.12 percent. That's a quarter of its former cost, and the cut brings it in line with the costs of the other 10 Fidelity sector ETFs. The change is a result of business development companies being removed from the fund's portfolio in accordance with changes in its underlying index, a filing said.
