Vanguard has trimmed the fees charged on four of its US-listed ETFs.
This is the third time in less than a year that Vanguard has lowered the fees on its US-listed ETFs.
The funds include one US equity ETF targeting mid and small-cap stocks, and three fixed income ETFs providing exposure to the short-, mid-, and long-term segments of the USD bond market.
While the fee cuts are of a magnitude of only one or two basis points, the ETFs in question are substantial, ranging from $4.8 billion to $21.9bn in assets under management. Collectively, the four funds house $47.6bn.
Following the fee cuts, investors in the ETFs will save approximately $9.0 million per year in annual management fees at current AUM levels.
The ETFs
The $8.3bn Vanguard Extended Market ETF (VXF US) has had its expense ratio lowered from 0.07% to 0.05%. The fund is linked to the S&P Completion Index which consists of virtually all US-listed equities outside of the S&P 500. Stocks in the index are weighted by market capitalization.
The $21.9bn Vanguard Short-Term Bond ETF (BSV US) has been lowered from 0.07% to 0.05%. The fund tracks the Bloomberg Barclays US 1–5 Year Government/Credit Float Adjusted Index, a market-weighted bond index that covers US dollar-denominated investment-grade bonds with remaining maturities between one and five years. US Treasury, US corporate, and international dollar-denominated bonds are eligible for selection.
The $12.6bn Vanguard Intermediate-Term Bond ETF (BIV US) has been cut from 0.07% to 0.05%. The fund tracks the Bloomberg Barclays US 5-10 Year Government/Credit Float Adjusted Index which tracks the same universe of bonds as above but targets securities with a maturity between five and ten years.
The $4.8 billion Vanguard Long-Term Bond ETF (BLV US) has been trimmed from 0.07% to 0.06%. The fund tracks the Bloomberg Barclays US Long Government/Credit Float Adjusted Index which covers similar bonds with remaining maturities greater than ten years.
Vanguard has been consistently providing savings for investors through regular reductions in fees across its ETF line-up.
In April 2019, the firm trimmed the fees on 21 of its US-listed ETFs including some of its biggest blockbuster products.
Vanguard followed up again in December by lowering the cost of a further nine international stock and bond ETFs.