Vanguard fires another salvo in the fee war

The nation's largest fund company lowers fees on three mutual funds and 14 ETFs; raises fees on one fund

Apr 28, 2017 @ 6:06 am

By John Waggoner

Vanguard announced another round of fee reductions today as the mutual fund price war rages on.

The nation's largest fund company lowered the expense ratio on four share classes of the nation's largest mutual fund, the $550-billion Vanguard Total Stock Market Index (VTSMX) fund:

• ETF share class (VTI) saw its expense ratio fall 0.01 percentage point, or one basis point, to 0.04%

• Institutional share class (VITSX) shed half a basis point to 0.035%

• Admiral share class (VTSAX) fell one basis point to 0.04%

• Investor share class slid one basis point to 0.15%

The $310-billion Vanguard 500 Index Fund (VFINX) also saw fee reductions:

• Admiral share class (VFIAX): one basis point to 0.04%.

• ETF share class (VOO): one basis point to 0.04%.

• Investor share class: two basis points to 0.14%.

The $178-billion Vanguard Total Bond market index fund cut its expense ratio by one basis point across all five share classes.

Vanguard also cut expenses on 14 ETFs: 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).

Vanguard also announced fee increases to both the retail and institutional shares classes of its Vanguard Market Neutral Fund (VMNFX) and (VMNIX), respectively. Fees on those share classes jumped 14 and 16 basis points, respectively, to 1.60% and 1.52%.

So far, none of Vanguard's competitors, such as Fidelity Investments and Charles Schwab & Co., have announced similar reductions, although they have been swift to do so in the past.

Dan Wiener, editor of The Independent Adviser for Vanguard Investors, a newsletter, noted that at current levels, fee reductions start to lose their meaning. "When you get to the single digits, it's hard to keep cutting and the gains are di minimus." For an investor with $10,000 in Vanguard Total Stock Market ETF, for example, the savings amount to $1.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

Events

3 Questions to ask yourself when making your succession plan

Michael Futterman from Janus Henderson Investors has sage advice for advisers as they approach retirement.

Latest news & opinion

CFA Institute adding crypto, blockchain to curriculum

Subjects will be added to its Level I and II coursework for the first time next year.

Trump tax plan making dividend ETFs hot

Funds that are seeing inflows largely steer clear of sectors like utilities.

Wells Fargo Advisors continues to see a decline in brokers

Company also set aside $114 million over fees for rich clients.

Morningstar to replace funds in its managed portfolios with nine of its own

New sub-advised funds, offered exclusively through financial advisers, are intended to lower costs and provide 'greater flexibility.'

Average client assets top $2 million for first time

Charles Schwab's latest RIA Benchmarking Study reports organic growth is driving increased AUM and revenues.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print