How Low Can Fees Go? Vanguard Plans ETF Industry Shake-Up
Thursday, June 24th, 2010Michael Johnston submits:
Vanguard, the Valley Forge, Pennsylvania-based firm known for its low cost mutual funds and ETFs, is planning a major expansion of its ETF product line. The company announced today that it plans to introduce 19 new index funds with ETF shares, as well as an ETF version of its popular Vanguard 500 Index Fund. Many of the proposed funds, which include products offering exposure to equities, bonds, and real estate, will compete directly with existing ETFs offered by other issuers. “We recognize that institutional investors and financial advisors may have a preference for certain benchmarks, and our goal is to offer them best-in-class funds and ETFs based on a choice of leading index providers, including FTSE, MSCI, Russell, and S&P,” said Vanguard CEO Bill McNabb in a press release. “Vanguard’s focus has been on developing a full array of stock and bond funds and ETFs to cover domestic and international markets and market segments. We are taking this logical next step to provide multiple options within the domestic stock markets and more choice for bond investors.”
Vanguard’s ETF Pipeline |
|
|---|---|
Index |
Expense Ratio |
| S&P 500 | 0.06% |
| S&P 500 Value | 0.15% |
| S&P 500 Growth | 0.15% |
| S&P MidCap 400 | 0.15% |
| S&P MidCap 400 Value | 0.20% |
| S&P MidCap 400 Growth | 0.20% |
| S&P SmallCap 600 | 0.15% |
| S&P SmallCap 600 Value | 0.20% |
| S&P SmallCap 600 Growth | 0.20% |
| Russell 1000 | 0.12% |
| Russell 1000 Value | 0.15% |
| Russell 1000 Growth | 0.15% |
| Russell 2000 | 0.15% |
| Russell 2000 Value | 0.20% |
| Russell 2000 Growth | 0.20% |
| Russell 3000 | 0.15% |
The 15 new equity ETFs Vanguard expects to roll out over the next year are based on well-known indexes already underlying some of the most popular exchange-traded products. The company has filed registration statements for funds tracking the value, blend, and growth versions of the S&P 500, S&P MidCap 400, S&P SmallCap 600, Russell 1000, and Russell 2000.
