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Vanguard and DFA Cut Fund Fees, Again

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What You Need to Know

  • Vanguard has cut fees on 17 funds; DFA is reducing fees on 47 funds.
  • Vanguard and DFA fee cuts are on mutual funds and ETFs.
  • DFA filed with the SEC in November to introduce 10 new ETFs.

Vanguard and Dimensional Fund Advisors are once again cutting fees on funds.

Vanguard has reduced fees on eight active equity and balanced mutual funds by one to 12 basis points and on nine bond index ETFs by one basis point, saving investors an estimated $18.9 million, according to the company.

DFA is cutting expenses on 47 mutual funds by 1 to 9 cents and on three ETFs by three to five cents, effective Feb. 22.

Vanguard said the cuts were the first round of fee reductions for the 2021-2022 fiscal year, which started Sept. 1. The cuts for its bond ETFs were enabled by “Investors’ continued adoption of Vanguard fixed income ETFs” across a range of products, including corporate credit, U.S. Treasury and mortgage-backed ETFs, according to Vanguard. Its U.S. bond ETF lineup has attracted $75.7 billion in cash flows through October 31.  A complete list of the fee cuts are listed in this press release.

DFA Fee Cuts

DFA said its forthcoming fee cuts will save investors 13% on an asset-weighted basis for the impacted funds, which include U.S, global and international equity funds (including emerging markets), U.S. fixed income funds and U.S. and international sustainable stock and bond funds.

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“We’ve always sought to ensure our investment strategies are priced competitively across asset classes and to empower financial professionals to make the best decisions for those they serve,” Dimensional Co-CEO Dave Butler said in a statement.

DFA said the firm was taking a long-term view of its fund fees, pricing by strategy rather than product wrapper as it seeks to deliver value over index, traditional active, and systematic active alternatives.

The list of funds cutting fees can be found here.

DFA entered the ETF space just over a year ago and has so far collected more than $42 billion in assets under management in its current lineup of 13 ETFs, some converted from existing mutual funds.

It recently launched a digital platform for separately managed accounts that lowers the minimum investment for SMAs to $500,000 from more than $20 million previously. In November, it filed with the Securities and Exchange Commission to introduce 10 new active transparent ETFs, in U.S. developed international, emerging markets and real estate equities.