Vanguard Clips More Fund Expense Ratios (VIG, VNQ)
Vanguard, the third-largest U.S. ETF sponsor behind BlackRock's (NYSE: BLK) iShares and State Street's (NYSE: STT) State Street Global Advisors, is back to doing something that has helped the firm rapidly become one of the ETF industry's dominant players: Cutting fund expense ratios.
Already known for some of the lowest fees in the business, Vanguard announced today lower fees for an array of its mutual funds and two ETFs.
The affected ETFs are the Vanguard Dividend Appreciation Index Fund (NYSE: VIG), which will see its expense ratio pared to 0.13% per year from 0.18%, and the Vanguard REIT Index ETF (NYSE: VNQ), which will now charge 0.1% compared to 0.12% previously. The changes take effect immediately.
VIG's new expense ratio makes it cheaper than 88% of comparable funds, according to Vanguard. Home to 134 stocks, VIG is the largest U.S. dividend ETF with $10.5 billion in assets under management at the end of April. Top-10 holdings include Coca-Cola (NYSE: CVX), IBM (NYSE: IBM), PepsiCo (NYSE: PEP) and Chevron (NYSE: CVX).
With a new expense ratio of 0.1%, VNQ is now cheaper than 93% of comparable funds, according to Vanguard. The fund is home to 111 stocks and top holdings include Simon Property (NYSE: SPG), Public Storage (NYSE: PSA) and Ventas (NYSE: VTR).
Today's news from Vanguard follows an announcement by the firm in late April that led to lower fees on 13 of its ETFs. Pennsylvania-based Vanguard had 64 ETFs and almost $208 billion in ETF AUM at the end of April, according to ETF Industry Association data.
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