Vanguard has reported lower expense ratios on four of its largest ETFs, including the USD8.3 billion Vanguard Extended Market ETF, the USD21.9 billion Vanguard Short-Term Bond ETF, the USD12.6 billion Vanguard Intermediate-Term Bond ETF, and the USD4.8 billion Vanguard Long-Term Bond ETF. Vanguard also reported lower expenses on three mutual fund share classes of Vanguard Extended Market Fund.
The firm writes that in aggregate, these changes represent USD12.9 million in savings returned to investors, bringing the total 2019 fiscal year client savings to USD85.1 million.
The recent rise in cash flow into fixed income ETFs has also seen Vanguard reduce expense ratios on 16 of its 18 US bond ETFs over the 2019 fiscal year reporting cycle.
Vanguard’s US fixed income ETFs experienced USD37.1 billion in cash flow in 2019, a 103 per cent increase from USD18.3 billion in 2018. Given the scale of the global bond market and relatively small footprint of bond ETFs, Vanguard expects greater fixed income ETF adoption to continue.