ETF Watch: Vanguard Cuts Expense Ratios

May 01, 2017

Vanguard has announced lower expense ratios for 82 of its mutual fund and ETF shares. The firm is known for its automatic expense ratio cuts (and increases), which are based on the amount of assets a fund has under management. Vanguard estimates that its investors saved $159 million due to these latest reductions.

Most notably, the U.S. broad-market Vanguard Total Stock Market ETF (VTI) has seen its expense ratio cut by 1 basis point to 0.04%, putting it within striking distance of similar funds offered by iShares and Charles Schwab that carry expense ratios of just 0.03%. Of course, VTI is a share class of the world’s largest mutual fund, the Vanguard Total Stock Market Index Fund, which has some $550 million in assets under management.

Similarly, the Vanguard S&P 500 ETF (VOO) also saw its expense ratio fall by 1 basis point to 0.04%, bringing its cost even with that of the iShares S&P 500 ETF (IVV), and the Vanguard Total Bond Market ETF (BND) also had its price lowered by 1 basis point, to 0.05%.

The 14 other affected ETFs include the following: the FTSE Developed Markets (VEA), Value (VTV), Growth (VUG), Short-Term Bond (BSV), Mid-Cap (VO), Small-Cap (VB), Intermediate-Term Bond (BIV), Large-Cap (VV), Small-Cap Value (VBR), Mid-Cap Value (VOE), Small-Cap Growth (VBK), Extended Market (VXF), Long-Term Bond (BLV) and Mid-Cap Growth (VOT).

In all, a total of 17 ETFs were affected by the expense reductions, including 13 equity funds and four bond funds. All together, the 70 Vanguard ETFs represent some $681 billion in assets under management.

Fee Reductions
Fund Ticker 2015 2016 BPs Change
Extended Market ETF VXF 0.09% 0.08% -1
FTSE Developed Markets ETF  VEA 0.09% 0.07% -2
Growth ETF VUG 0.08% 0.06% -2
Large-Cap ETF  VV 0.08% 0.06% -2
Mid-Cap ETF  VO 0.08% 0.06% -2
Mid-Cap Growth ETF  VOT 0.08% 0.07% -1
Mid-Cap Value ETF  VOE 0.08% 0.07% -1
S&P 500 ETF  VOO 0.05% 0.04% -1
Small-Cap ETF  VB 0.08% 0.06% -2
Small-Cap Growth ETF VBK 0.08% 0.07% -1
Small-Cap Value ETF VBR 0.08% 0.07% -1
Total Stock Market ETF  VTI 0.05% 0.04% -1
Value ETF  VTV 0.08% 0.06% -2
Intermediate-Term Bond ETF  BIV 0.09% 0.07% -2
Long-Term Bond ETF  BLV 0.09% 0.07% -2
Short-Term Bond ETF  BSV 0.09% 0.07% -2
Total Bond Market ETF  BND 0.09% 0.05% -1


Contact Heather Bell at [email protected].


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