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Vanguard Reduces Fees in Exchange Traded Funds (ETFs)

Also, IAU and GLD gold ETFs cut expenses


Good news for all ETF investors: The price war for your investment in exchange traded funds continues. ETF research shows Vanguard became the latest company to reduce the annual expense ratios on several of its ETFs.

The Vanguard ETFs impacted by the lower fees are the following funds:

  • Vanguard FTSE All World ex-US ETF (NYSE: VEU) is now 0.22%
  • Vanguard FTSE All World ex-US Small Cap ETF (NYSE: VSS) is now 0.33%
  • Vanguard MSCI Europe ETF (NYSE: VGK) is now 0.14%
  • Vanguard MSCI Pacific ETF (NYSE: VPL) is now 0.14% 
  • Vanguard MSCI Emerging Markets ETF (NYSE: VWO) is now 0.22%
  • Vanguard Total Stock World ETF (NYSE: VT) is now 0.25%

Also, Vanguard inserted MSCI into the names of four Vanguard ETFs linked to MSCI indexes. For example, the previously named Vanguard Europe Pacific ETF (NYSE: VEA) is now known as the Vanguard MSCI EAFE ETF. The ETF Ticker symbols for these MSCI linked funds remain unchanged.

Fee cuts within the ETF marketplace have been happening from two main angles; first, brokerage firms eliminating or minimizing brokerage commissions to buy and sell certain ETFs and second, fund providers lowering annual expense ratios on their ETFs. Both moves are a positive development for cost conscious investors.

Expense ratio reductions with the ETF market are also occurring with narrowly focused industry sector funds.

Earlier in the year, the Select Sector SPDRs, cut annual fees on their nine S&P 500 industry sector ETFs from 0.21% to 0.20%. The funds follow various sectors within the S&P 500 like energy and technology.

Another example of a high profile battle for investor’s money is with gold ETFs.

BlackRock, manager of the iShares Gold Trust (NYSE: IAU), cut IAU’s annual fees to 0.25% making it 0.15% cheaper compared to its larger rival the SPDR Gold Shares (NYSE: GLD). Both gold ETFs have the same investment objective and are hinged to the ounce price of gold bullion.

Vanguard’s ETFs are an additional share class of index mutual funds. Investors that own the Vanguard index mutual fund structure are allowed to convert their shares to the index ETF structure for a one-time flat fee of $50. The conversion fee may be higher for investment accounts not held at Vanguard.

At the end of January, Vanguard managed $152.69 billion in 64 ETFs.

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Article printed from InvestorPlace Media,

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