Vanguard continues to bring down the cost of ETF investing

February 26, 2019

 

At Vanguard, we continue to bring down the cost of ETF investing. Effective February 26, 2019, the SEC approved prospectus updates announcing reduced expense ratios for ten of our index ETFs.

These expense ratio reductions include three of our largest international ETFs and five other index ETFs covering various markets outside the United States. Also reporting lower expense ratios are Vanguard Tax-Exempt Bond ETF and Vanguard High Dividend Yield ETF.

The growing size and scale of our funds have helped fuel operational efficiencies that lower our costs to serve clients, particularly ETF shareholders. As a result, the ETF share class of these ten funds is now lower than their Admiral™ share class counterparts.

With these lower expense ratios, VEU, VPL, VXUS, VYM, and VT will be the lowest-cost ETFs in their respective categories.1

TickerNew nameNew expense ratio
BNDXVanguard Total International Bond ETF0.09%
VEUVanguard FTSE All-World ex-US ETF0.09%
VGK Vanguard FTSE Europe ETF 0.09%
VPL Vanguard FTSE Pacific ETF 0.09%
VTEB Vanguard Tax-Exempt Bond ETF 0.08%
VWO Vanguard FTSE Emerging Markets ETF 0.12%
VXUS Vanguard Total International Stock ETF 0.09%
VSS Vanguard FTSE All-World ex-US Small-Cap ETF 0.12%
VYM Vanguard High Dividend Yield ETF 0.06%
VT Vanguard Total World Stock ETF 0.09%

This is another example of our commitment to lower the cost and complexity of investing. Over the last three years alone, more than 500 Vanguard mutual fund and ETFs have reported expense ratio decreases for an estimated $625 million in cumulative savings (based on total assets).2  In fact, Vanguard’s ETF share class has attracted more cash flow over the past three years than any other share class.

Vanguard has a long history of lowering expense ratios for both traditional fund shares and ETF Shares. Expense ratios represent the cost of operating a mutual fund, including investment advisory fees, administrative costs, distribution fees, and shareholder-service expenses. As assets grow, our funds realize economies of scale that help reduce our operating costs and lead to lower fund expense ratios.

1 Vanguard and Morningstar, Inc., as of December 31, 2018.

2 Cumulative figure for all share classes from the 2015-16 fiscal year through the 2017–2018 fiscal year for the U.S.-domiciled funds. Estimated savings is the difference between prior and current expense ratios multiplied by average assets under management. Average AUM is based on daily average assets during a month, which are then averaged over the 12 months of the fiscal year.

Notes:

  • All investing is subject to risk, including the possible loss of the money you invest.
  • Vanguard ETF Shares are not redeemable with the issuing Fund other than in very large aggregations worth millions of dollars. Instead, investors must buy and sell Vanguard ETF Shares in the secondary market and hold those shares in a brokerage account. In doing so, the investor may incur brokerage commissions and may pay more than net asset value when buying and receive less than net asset value when selling.
 

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