Fee Battle Moves to All-World ETFs | ETF Trends

For Vanguard, the ETF price wars are on.

The name of the game is to undercut the largest two competitors Vanguard has – BlackRock and State Street.

Joe Morris for Ignites reports that one new ETF, expected to launch in the first quarter, will be added as an asset class to Vanguard’s $26 billion Total International Stock Mutual Fund. The fund is also simultaneously switching benchmarks, from the MSCI EAFE + Emerging Markets Index to the MSCI All Country World ex-USA Investable Market Index. [5 Ways to Cut the Cost of ETF Investing.]

Vanguard says the switch will give “better representation” of global equity markets. The new index covers 98% of the world’s non-U.S. markets, including more than 6,000 issues encompassing stocks of large-, mid- and small-capitalization companies in 44 countries, Vanguard notes. [Vanguard Rolls Out New ETFs.]

This index change will put the Vanguard fund in direct competition with iShares MSCI ACWI ex-U.S. (NYSEArca: ACWX) and SPDR MSCI ACWI ex-U.S. (NYSEArca: CWI). However, Vanguard intends to charge less: 0.20%, compared with 0.35% for iShares’ $740 million ETF and 0.34% for State Street’s $390 million ETF. [Another Vanguard Price War.]

Tisha Guerrero contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.