What's Behind Vanguard Eliminating ETF Trading Fees

The Vanguard Group will be eliminating all its trading fees for ETFs starting in August, including those offered by its market competitors like iShares, Schwab and State Street Global Advisors.

The new policy won’t apply to leveraged or inverse ETFs.

The CNBC “Closing Bell” team discussed what’s behind Vanguard’s decision to eliminate almost all ETF trading fees.

“I think the most interesting aspect here is that ETFs have been no commission at many of the firms offering them for years,” said Kari Firestone of Aureus Asset Management. “Now they are offering no commission on other people’s funds, therefore I don’t think they make any money on it at all.”