Vanguard Cuts Fees On 4 Bond ETFs

Vanguard Cuts Fees On 4 Bond ETFs

‘BND’ is getting a half-basis point haircut.

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Reviewed by: Dan Mika
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Edited by: Dan Mika

Vanguard’s latest round of fee cuts targets its lineup of broad fixed income funds, including its flagship Vanguard Total Bond Market ETF (BND)

The fee cuts announced Friday morning are listed below: 

 

TickerFundPrevious Expense RatioNew Expense RatioAUM
BSV

Vanguard Short-Term Bond ETF

0.05%0.04%$36.44B
BIVVanguard Intermediate-Term Bond ETF0.05%0.04%$12.63B
BLVVanguard Long-Term Bond0.05%0.04%$4.58B
BNDVanguard Total Bond Market ETF0.035%0.03%$81.34B

 

The firm estimates the cost cuts will save shareholders approximately $8.8 billion in its fiscal year 2021 compared with the fiscal year prior based on monthly average assets under management. 

The half-basis-point cut for BND brings its expense ratio level with that of the iShares Core U.S. Aggregate Bond ETF (AGG), which effectively provides the same type of government and investment-grade corporate debt exposure. 

AGG and BND are the largest fixed income ETFs on the markets, with $82.93 billion and $81.3 billion in assets, respectively. However, AGG is more often used as a trading tool, as indicated by its $1.08 billion in average daily volume compared with BND’s $635 million. 

Vanguard’s move is the latest in a long-running battle between major issuers to push fees down for vanilla ETFs in a bid to attract investor dollars at scale. 

 

Contact Dan Mika at [email protected], and follow him on Twitter 

Dan Mika is a reporter for etf.com. He has previously covered business for the Ames Tribune and Cedar Rapids Gazette in Iowa, and BizWest Media in Fort Collins, Colorado. Dan holds a bachelor's degree in journalism from Truman State University.