Vanguard trims fees on nine international stock and bond ETFs

Dec 27th, 2019 | By | Category: ETF and Index News

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Vanguard has trimmed the fees on nine US-listed ETFs that provide a range of international stock and bond exposures.

Vanguard trims fees on nine international stock and bond ETFs

The fee cuts come just a few months after Vanguard lowered the expense ratios on 21 of its US-listed ETFs.

While the fee cuts are of a magnitude of only one or two basis points, the ETFs in question are substantial.

The funds benefiting from reduced fees range in size from $3.8 billion to $63.2bn in assets under management. Collectively, they house $174.8bn.

Following the fee cuts, investors in the ETFs will save approximately $24.5 million per year in annual management fees at current AUM levels.

The ETFs were already some of the cheapest in their categories with an average expense ratio of just 0.08% across the range.

These latest fee cuts follow a similar move by Vanguard a few months when it lowered the expense ratios on another 21 other US-listed ETFs, including some of its blockbuster funds.

Highlights

The Vanguard Emerging Markets Stock ETF (VWO US), the world’s largest emerging market ETF with $63.2bn AUM, has had its expense ratio lowered from 0.12% to 0.10%. The fund tracks the FTSE Emerging Markets All Cap China A Inclusion Index, providing exposure to large, mid, and small-cap stocks from more than 20 emerging market countries.

The move sees the fund become the cheapest emerging markets ETF in the US, claiming the title from the $3.5bn SPDR Portfolio Emerging Markets ETF (SPEM US) which costs 0.11%. The average expense ratio for emerging market ETFs in the US is currently 0.55%.

The $17.3bn Vanguard Total International Stock ETF (VXUS US) has seen its expense ratio trimmed from 0.09% to 0.08%. The fund tracks the FTSE Global All Cap ex US Index which covers large, mid, and small-cap equities listed in both developed and emerging markets outside the US.

Similarly, the $25.9bn Vanguard FTSE All-World ex-US ETF (VEU US) now costs 0.08%, down from 0.09%. The fund tracks the FTSE All-World ex-US Index which is very similar to the above FTSE Global All Cap ex US Index except that it targets large and mid-caps only.

Vanguard has also claimed the title of cheapest US-listed European equity ETF by reducing the expense ratio on the $14.5bn Vanguard FTSE Europe ETF (VGK US) from 0.09% to 0.08%. The fund is linked to the FTSE Developed Europe All Cap Index. The move will likely be scrutinized by rival ETF issuers DWS, iShares, Franklin Templeton, and JP Morgan which all offer broad European equity ETFs with fees of 0.09%.

The issuer has also made two adjustments to its fixed income suite. Most notably, the $24.3bn Vanguard Total International Bond ETF (BNDX US) has had its expense ratio lowered from 0.09% to 0.08%. The fund tracks the Bloomberg Barclays Global Aggregate ex-USD Float Adjusted RIC Capped Index which consists of non-US dollar-denominated bonds from issuers domiciled outside the US. It includes currency hedging back to the US dollar.

The ETFs, along with their AUM and old and new expense ratios, are outlined below:

Vanguard Total International Stock ETF (VXUS US); $17.3bn; 0.09%; 0.08%
Vanguard Total International Bond ETF (BNDX US); $24.3bn; 0.09%; 0.08%
Vanguard FTSE Emerging Markets ETF (VWO US); $63.2bn; 0.12%; 0.10%
Vanguard Total World Stock ETF (VT US); $13.5bn; 0.09%; 0.08%
Vanguard FTSE Europe ETF (VGK US); $14.5bn; 0.09%; 0.08%
Vanguard FTSE Pacific ETF (VPL US); $3.8bn; 0.09%; 0.08%
Vanguard FTSE All-World ex-US ETF (VEU US); $25.9bn; 0.09%; 0.08%
Vanguard FTSE All-World ex-US Small-Cap ETF (VSS US); $5.6bn; 0.12%; 0.11%
Vanguard Tax-Exempt Bond ETF (VTEB US); $6.7bn; 0.08%; 0.06%

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