In a move that could greatly affect financial advisor clients, Vanguard has turned up the heat in the ongoing price war between mutual funds with cuts of a few basis points to several of its mutual funds and ETFs, InvestmentNews writes.
Vanguard trimmed 0.01% in all five share classes of its $178 billion Vanguard Total Bond fund and in three share classes of the $550 billion Vanguard Total Stock Market Index fund, the publication writes.
In the institutional share class of the stock fund, the mutual fund giant shaved off just half a basis point, according to InvestmentNews. Its $310 billion Vanguard 500 Index Fund had fee reductions of one to two basis points in three share classes, the publication writes. Vanguard also cut fees on 14 ETFs, InvestmentNews writes.
But further price reductions start becoming meaningless at the single-digit level, according to Daniel Wiener, an advisor and editor of an independent newsletter tracking Vanguard funds, the publication writes. Savings for a $10,000 investment in the Vanguard Total Stock Market ETF, for example, would be just $1, according to InvestmentNews.
Meanwhile, Vanguard raised fees by 14 basis points for its retail share classes and 16 basis points on institutional share classes of its Vanguard Market Neutral Fund, the publication writes.
Neither Fidelity nor Charles Schwab have yet announced fee cuts of their own following Vanguard’s latest reductions, but in the past both firms have responded quickly, InvestmentNews writes. All three firms have been dropping fees for retail investors in recent months, a trend that may end up benefiting wirehouses, as previously reported.