Vanguard lowers fees on some ETFs

Vanguard lowers fees on some ETFs
In the latest round of the ETF price war, Vanguard pushes cost of its S&P 500 ETF below that of similar offerings from BlackRock, State Street
MAR 01, 2019
By  Bloomberg

Vanguard Group, the second-largest issuer of exchange-traded funds, escalated an industry price competition by lowering fees on three of its popular products. The asset manager will reduce fees on its Vanguard Total Bond Market ETF, making it the cheapest U.S. bond fund, according to regulatory filings. The firm also plans to cut costs on the Vanguard S&P 500 ETF, dropping them below offerings by BlackRock Inc. and State Street Corp. that track the same index. And the company is pushing down fees on its Vanguard Total Stock Market ETF. The development is part of an intensifying price war in ETFs and focuses more attention on the specter of zero-fee funds in the industry. SocialFinance Inc., the online lender known as SoFi, said Monday it will help start two ETFs that won't charge any management fee for at least the first year. Vanguard, which isn't publicly traded, has been one of the driving forces in the industrywide competition over prices. BlackRock is largest provider of ETFs. "These Vanguard products are already extremely popular and investors are only more likely to gravitate toward them as they focus more (too much in my view) on fees," Todd Rosenbluth, director of ETF Research at CFRA Research, wrote in a note. (More: Schwab, Fidelity expand commission-free ETF trading)​ Vanguard Total Bond Market ETF will change its expense ratio to .035%, according to the filings. That makes it cheaper than comparable funds: SPDR Portfolio Aggregate Bond ETF carries an expense ratio of .04%, and iShares Core U.S. Aggregate Bond ETF maintains an expense ratio of .05%. Vanguard S&P 500 ETF will have an expense ratio of .03%, making it cheaper than iShares Core S&P 500 ETF and well below SPDR S&P 500 ETF Trust. Vanguard Total Stock Market ETF will also lower its expense ratio to .03%. (More: The race to zero fees may be reaching its natural limits)

Latest News

JPMorgan tells fintech firms to start paying for customer data
JPMorgan tells fintech firms to start paying for customer data

The move to charge data aggregators fees totaling hundreds of millions of dollars threatens to upend business models across the industry.

FINRA snapshot shows concentration in largest firms, coastal states
FINRA snapshot shows concentration in largest firms, coastal states

The latest snapshot report reveals large firms overwhelmingly account for branches and registrants as trend of net exits from FINRA continues.

Why advisors to divorcing couples shouldn't bet on who'll stay
Why advisors to divorcing couples shouldn't bet on who'll stay

Siding with the primary contact in a marriage might make sense at first, but having both parties' interests at heart could open a better way forward.

SEC spanks closed Osaic RIA for conflicts, over-charging clients on alternatives
SEC spanks closed Osaic RIA for conflicts, over-charging clients on alternatives

With more than $13 billion in assets, American Portfolios Advisors closed last October.

William Blair taps former Raymond James executive to lead investment management business
William Blair taps former Raymond James executive to lead investment management business

Robert D. Kendall brings decades of experience, including roles at DWS Americas and a former investment unit within Morgan Stanley, as he steps into a global leadership position.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.