Vanguard, the third-largest U.S. issuer of exchange traded funds, announced Thursday it has lowered the annual expense ratios on five of its international ETFs.
That group includes the Vanguard FTSE Emerging Markets ETF (NYSEArca: VWO), the largest emerging markets ETF by assets. As of Feb. 24, VWO’s annual expense ratio is 0.15%, down from 0.18%. VWO’s new expense ratio makes cheaper than 91% of rival funds.
“Vanguard has long been a low-cost leader, which can be attributed to our unique corporate ownership structure and our relentless pursuit to operate more efficiently and productively. Vanguard is owned by our funds—and, in turn, collectively owned by the fund shareholders. We provide services at cost, returning any “profits” to fund investors in the form of lower expense ratios. It’s a structure that enables us to pass along economies of scale—and reduce expenses—as fund assets grow,” said the Pennsylvania-based company in a statement.
Two Vanguard ETFs – the Vanguard FTSE All World ex-US Small-Cap ETF (NYSEArca: VSS) and the Vanguard Global ex-U.S. Real Estate ETF (NYSEArca: VNQI) – saw fee reductions of five basis points. VSS now charges 0.2% while VNQI’s expense ratio has been pared to 0.27% per year.
The Vanguard Total International Stock ETF (NYSEArca: VXUS) now has an annual expense ratio of 0.14%, down from 0.16%. That is lower than 89% of funds with comparable holdings, according to Vanguard. The Vanguard Total World Stock ETF (NYSEArca: VT) saw a modest fee cut to 0.18% from 0.19%.