Though it’s four months after the fact, Vanguard on Thursday announced fee reductions for 35 fund shares covering both mutual funds and exchange-traded funds.
A spokesperson for the Valley Forge, Pa.-based asset manager said the reported expense ratio changes represent the actual annual expenses incurred through the funds’ August fiscal year-end and reflect the information Vanguard filed in the funds’ prospectuses and annual reports.
He noted that Vanguard typically files fund prospectuses within three to four months of the fiscal year-end, which is within regulatory provisions on annual reporting.
“Though expense ratios are backwards-looking and reflect the actual expenses incurred in the past year, they also serve as a good estimate of expected expenses for the current fiscal year,” the spokesperson said. “However, current expenses may differ from what’s published in the prospectus and will be reflected in the next annual update.”
According to a press release, expense ratio reductions for the 12 months ended August 2016 covered a range of fund share classes (Investor, Admiral, ETF, Institutional, and Institutional Plus) in five fund categories: bond index; size/style equity index; social index; actively managed domestic equity; and actively managed international equity.
“While some will portray Vanguard’s expense ratio reductions as another volley fired in the fee war, we view it as business as usual,” Vanguard CEO Bill McNabb said in the statement. “We’ve been lowering the cost of investing for four decades and will continue to do so.”
Vanguard boasts that its clients saved $13 million resulting from the lower expense ratios reported on Thursday.
That said, Vanguard also announced higher expense ratios for two funds: the Admiral Shares of the Vanguard Consumer Discretionary Index Fund and ETF Shares of the Vanguard Health Care Index Fund both reported increases of 1 basis point, from 0.09 percent to 0.10 percent, for the fiscal year ended August, 2016