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

Reporter Ryan Neal discusses how investors inside and outside financial advice have become interested in the industry's technology, and introduces us to some top people fueling the trend.

Video Spotlight

Recommended Video

Channels

Latest news & opinion

The dealmakers financing top adviser technology

Meet the money that backed Betterment, eMoney, Riskalyze, LifeYield and more.

Robos with the best and worst portfolios over the last two years

Schwab tops latest Robo Report showing performance of seven digital-advice portfolios.

Super Bowl of financial scams that hit NFL players

Big paychecks often attract unscrupulous financial advisers to the National Football League, resulting in a long list of high-profile financial implosions, many of which end up in court.

Funds that missed the January rally some by a little and some by a lot

Here are 10 funds that whiffed when at bat against the S&P 500 index, and why they struck out.

LPL Financial signs up 953 NPH advisers and $34.4 billion in assets

Broker-dealer says it is on track to bring over 70% of NPH revenue as part of its acquisition.

X

Hi! Glad you're here and we hope you like all the great work we do here at arjuna-design. 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 arjuna-design.com? It'll help us continue to serve you.

Yes, show me how to whitelist arjuna-design.com

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

X

Subscribe and Save 60%

Last News

72t plan roth conversion deadline reverse mortgage maximum loan amount merrill lynch wealth management 401k 529 college savings plan ohio retirement fund growth calculator jp morgan brokerage account prudential island savings plan widow social security eligibility trrcx stock vanguard small cap value index fund institutional shares chase bank wealth management how are reits taxed t rowe price large cap growth portfolio vanguard target retirement 2025 trust ii jpmorgan etf efficiente 5 index performance social security benefits for child of deceased parent new york life insurance and annuity ceo bank of america merrill lynch average social security income for seniors drawing social security from ex spouse t rowe price value fund morningstar jp morgan retirement plan services llc exceptions to ira early withdrawal penalty are ira custodial fees tax deductible cost of florida prepaid college plan social security death of spouse benefits for surviving spouse prudential financial advisor salary john hancock disciplined value mid cap wash sale rule irs pimco long duration total return utah educational savings plan trust jp morgan retirement plans pa 529 plan reviews first command financial advisor salary usaa mutual fund reviews fidelity fixed annuity rates goldman sachs investment management salary aon hewitt investment consulting social security benefits for widow