Vanguard Lowers Fees on 4 Bond ETFs

Vanguard today reported expense ratio reductions for four broadly diversified bond ETFs. 

The ETFs affected include the Vanguard Intermediate-Term Bond ETF (BIV), the Vanguard Long-Term Bond ETF (BLV), and the Vanguard Short-Term Bond ETF (BSV), each of which dropped to four basis points from five, and the Vanguard Total Bond Market ETF (BND), which dropped half a basis point to three basis points.

“While the fee reduction on BND is minimal, the ETF has $82 billion of assets and has been a surprise asset gatherer during a time when fixed income ETFs are relatively out of favor,” Todd Rosenbluth, head of research at ETF Trends and ETF Database, says.

“This aligns BND with $83 billion peer from iShares, the iShared Core U.S. Aggregate Bond ETF (AGG), and positions the fund to gain more assets as advisors build ETF focused asset allocation portfolios. For existing shareholders, the cost savings will help put more money to work for income generation,” Rosenbluth adds.

The expense ratio of AGG was reduced earlier this month to three basis points from four basis points, according to regulatory filings. At the same time, iShares slashed fees across a handful of other ETFs and mutual funds in its lineup. 

For more news, information, and strategy, visit the Fixed Income Channel.