Vanguard, Capital Group Cut Fund Fees

The other fixed income funds to get management fee reductions were the: AF Short-Term Tax-Exempt Bond Fund (0.20% from 0.33%); AF Tax-Exempt Fund of NY (0.24% from 0.29%); AF Tax-Exempt Fund of California (0.23% from 0.26%); Limited Term Tax-Exempt Bond Fund of America (0.18% from 0.20%); and American High-Income Municipal Bond Fund (0.24% from 0.25%).

Three Capital Group equity funds got management fee reductions: American Funds International Vantage Fund, to 0.48% from 0.60%; American Funds Developing World Growth & Income Fund, to 0.65% from 0.73%; and American Funds Global Insight Fund, to 0.41% from 0.42%.

Meanwhile, the Capital Group Emerging Markets Growth Fund was reduced to 0.62% from 0.76%, and two of its American Funds Insurance Series were reduced: the VI Ultra Short Bond Fund, to 0.26% from 0.32%, and VI International Fund, to 0.48% from 0.49%.

Vanguard Fee Changes

Vanguard made expense ratio changes for six funds across multiple ETF and mutual fund share classes with fiscal years ending December 2021, it said.

Explaining why it made the fee changes, Vanguard said its “investor-owned corporate structure enables the firm to return value to shareholders through lower costs and reinvestments to improve capabilities, technology, and client experience.^” Changes to expense ratios “occur for a variety of reasons, including asset growth and operational efficiencies,” it said.

On “most of Vanguard’s external advisory arrangements, the advisor’s fee is also subject to an adjustment up or down based on their investment performance relative to the total return of an appropriate benchmark,” it explained. “Expense ratio changes may also reflect other types of portfolio management expenses.”

For the Vanguard Market Neutral Fund and other funds that use long- and short-selling strategies, expense ratios can also include borrowing expenses and dividend expenses on securities sold short, it added.

Getting reduced fees were the Vanguard Total Bond Market ETF (to 0.03% from 0.035%) and the Vanguard Intermediate-Term Bond ETF, Vanguard Long-Term Bond ETF and Vanguard Short-Term Bond ETF (each to 0.04% from 0.05%).

But the Vanguard Managed Allocation Fund’s expense ratio increased to 0.31% from 0.28%, while the expense ratios on both versions of its Vanguard Market Neutral Fund increased: to 1.31% from 1.18% on investor shares and to 1.25% from 1.12% on institutional shares.

Vanguard managed $8.1 trillion for about 30 million clients as of March 31, while Capital Group managed over $2.7 trillion in equity and fixed income assets as of Dec. 31, the companies said.

(Image: AP)