Vanguard Announces ETF Fee Cuts

December 22, 2016

Mutual fund and ETF giant Vanguard has announced fee cuts on a number of its funds, including 11 ETFs, for the 2016 fiscal year ended in August. In the press release, Vanguard CEO Bill McNabb emphasized that these expense ratio reductions were just “business as usual” rather than the latest shots fired in the ETF fee war.

Vanguard tends to raise and lower expense ratios based on a fund’s assets under management, as economies of scale mean the greater an index fund’s assets, the cheaper it is to manage.

Most of the reductions were related to Vanguard’s bond funds, with eight ETFs seeing their expense ratios fall by 3 basis points. Fixed-income ETFs throughout the ETF industry saw significant inflows this year. The firm’s three “Mega Cap” ETFs also saw their expense ratios lowered by 2 basis points each, and the health care sector ETF’s fee was raised by 1 basis point.

 

Fund Ticker Old ER New ER BPS Change
Vanguard Extended Duration  EDV 0.10% 0.07% -3
Vanguard Intermediate-Term Corporate Bond VCIT 0.10% 0.07% -3
Vanguard Intermediate-Term Government Bond VGIT 0.10% 0.07% -3
Vanguard Long-Term Corporate Bond VCLT 0.10% 0.07% -3
Vanguard Long-Term Government Bond VGLT 0.10% 0.07% -3
Vanguard Mortgage-Backed Securities VMBS 0.10% 0.07% -3
Vanguard Short-Term Corporate Bond VCSH 0.10% 0.07% -3
Vanguard Short-Term Government Bond VGSH 0.10% 0.07% -3
Vanguard Mega Cap Growth MGK 0.09% 0.07% -2
Vanguard Mega Cap MGC 0.09% 0.07% -2
Vanguard Mega Cap Value  MGV 0.09% 0.07% -2
Vanguard Health Care VHT 0.09% 0.10% 1

 

Contact Heather Bell at [email protected].

 

 

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