ETF issuer Vanguard has once again lowered its management fees on a couple of popular funds, as the pricing war with BlackRock’s iShares and other issuers continues to intensify.
This time around, Vanguard has lowered its fees for its largest emerging markets fund, as well as its broad Europe fund. From Bloomberg:
The Vanguard FTSE Emerging Markets ETF, the world’s largest fund invested in developing stocks, has seen its expense ratio cut by 1 basis point to 14 basis points, the same as BlackRock’s iShares Core MSCI Emerging Markets ETF, the third-biggest fund invested in developing stocks. The iShares fund has been a standout this year, with investors putting $4.2 billion into the product, the most among 2,000 U.S. competitors.
The expense ratio for Vanguard FTSE Europe ETF, the world’s largest ETF invested in European stocks, declined to 10 basis points from 12 to match the fee for the iShares Core MSCI Europe ETF.
Vanguard is lowering its fees for good reason. According to Bloomberg Intelligence, the vast majority of the $284 billion in inflows going into ETFs in the U.S. marketplace over the past year went to funds with expense ratios of 9 basis points or less.
With issuers content to collect a smaller piece of a much larger pie, these expense cuts are a major boon for investors. Warren Buffett recently noted that $100 billion has been wasted over the past decade alone by individual investors on too-high investment fees from brokers.
The iShares MSCI Emerging Markets Index ETF (NYSE:EEM) closed at $38.48 on Friday, down $0.46 (-1.18%). Year-to-date, EEM has gained 9.91%, versus a 5.91% rise in the benchmark S&P 500 index during the same period.