Vanguard Announces ETF Fee Cuts

Changes affect mostly fixed-income ETFs and are mainly the result of increased assets under management.

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Reviewed by: Heather Bell
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Edited by: Heather Bell

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.

 

FundTickerOld ERNew ERBPS Change
Vanguard Extended Duration EDV0.10%0.07%-3
Vanguard Intermediate-Term Corporate BondVCIT0.10%0.07%-3
Vanguard Intermediate-Term Government BondVGIT0.10%0.07%-3
Vanguard Long-Term Corporate BondVCLT0.10%0.07%-3
Vanguard Long-Term Government BondVGLT0.10%0.07%-3
Vanguard Mortgage-Backed SecuritiesVMBS0.10%0.07%-3
Vanguard Short-Term Corporate BondVCSH0.10%0.07%-3
Vanguard Short-Term Government BondVGSH0.10%0.07%-3
Vanguard Mega Cap GrowthMGK0.09%0.07%-2
Vanguard Mega CapMGC0.09%0.07%-2
Vanguard Mega Cap Value MGV0.09%0.07%-2
Vanguard Health CareVHT0.09%0.10%1

 

Contact Heather Bell at [email protected].

 

 

Heather Bell is a former managing editor of etf.com. She has also held editorial positions at Dow Jones Indexes and Lehman Brothers. Bell is a graduate of Dartmouth college and resides in the Denver area with her two dogs.