, already the exchange traded fund (
) industry's low-price leader, is now waging a pricing war on
another front now: its brokerage platform.
Vanguard has slashed costs for its brokerage clients by offering
them commission-free transactions on its already dirt-cheap line of
ETFs and lowered commissions on trades of non-Vanguard ETFs. From
- There are no trading commissions on Vanguard's lineup of 46
- Commissions to trade all other ETFs and stocks on Vanguard's
platform will range between $2 and $7
Vanguard has always been a competitive player in the ETF space,
with competitive pricing, an excellent brokerage platform and solid
indexing that has long set it apart. With an average expense ratio
of 0.18%, those low prices have been paying off handsomely for the
provider in recent months. Since March 2009, Vanguard's assets
under management have swelled from $43.3 billion to $103.7 billion,
making it the third-largest ETF provider in the world. The average
ETF expense ratio is 0.52%. [
How Low Can ETF Fees Go?
This move follows quickly on the heels of other price-slashing
moves made by other ETF providers and brokerages in recent months.
unveiled its new ETFs, the brokerage also announced that the funds
would trade commission-free on the Schwab platform while all other
ETFs trade for $8.95.
followed up by announcing $7.95 commissions and free trading of 25
ETFs on its platform. [
Schwab Hits An Asset Milestone.
Other brokerages also offer appealing pricing to their
charges $9.99 a trade;
charges $12.99 for customers with less than $5,000 in assets under
Now that ETFs account for 50% of all trading on exchanges, the
game is on. Vanguard's lowered brokerage commissions represent an
all-out fight for self-directed ETF investor assets - not just
people who use Vanguard ETFs. [
The ETF Price Wars.
This battle is going to do nothing but intensify, and the winner
could very well be you.
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