The race to cut fees in exchange-traded funds is getting ever more intense.
Vanguard Group Inc., the second-largest provider, lowered expense ratios for 68 ETFs and mutual funds Friday, including the world’s largest funds focused on emerging equities and European stocks. It’s the third set of reductions by Vanguard since late December, and comes after similar moves in the past year by State Street Corp. and the biggest ETF provider, BlackRock Inc.
The fund operators are seeking to hold on to market share amid fast expansion in the ETF industry, which has more than $3 trillion in assets globally, and growing conviction that many investors are best served by low-cost index funds. Vanguard’s move is good news for money managers looking to tap into emerging stocks and equities in Europe after run-ups in both over the past year.
“This is an attempt to gain new assets, but more importantly not to lose assets when your competitor is cutting fees,” said Mohit Bajaj, a director of ETF trading solutions at WallachBeth Capital in New York. “This is great for investors.”