On 3 February 2025, Shortened vanguard fees to 168 shares classes across 87 fundsincluded for 53 ETF shares classes. Vanguard is the only American emitter to have an ETF as a class of its mutual funding.
As one of the world's largest wealth managers, Vanguard's movement will go through considerable savings for investors, and also make significant pressure from ETF competitors. However, implications for the ETF industry will vary by ETF category. Table 1 summarizes the broad categories in which Vanguard's shortening fees, as well as current executives in those categories based on net assets and lower spending ratios.
In some ETF categories, Vanguard is already a lower cost provider and has ETF with the highest net assets. In these areas, lowering tariffs will be an opportunity to pass the reduction of tariffs for investors, while also using those low tariffs to further its time for assets. In other areas, Vanguard has no larger ETF and can use tariff reduction as a way to improve its market share.
Categories with the opportunity for Vanguard to play capture
An area where Vanguard can use tariff reductions to win market share is at the ETF of the SH.BA -centered sector, where the firm stopped tariffs in 10 funds. Vanguard is not the lowest cost provider in this category even after these recent discounts. The ETF of the American sector of Fidelity is at 0.08%, a basic point lower than the new Vanguard tariff of 0.09% in its ETF sector. However, Vanguard's lowest fee now sets it at the same time with the ETF sector tariffs of the state road, the leader fugitive in the US sector category.
ETF of the Vanguard sector, while large, are small compared to those of the state road. As an example, Vanguard Financial ETF (VFH) had $ 12.4 billion as of January 31, 2025, compared to $ 53.8 billion in SPDR Fund of the Sector Financial Sector (XLF). The ETF of the sector presents an important opportunity for Vanguard to use its new tariff structure to compete for the extra market share.
Another area where Vanguard has an opportunity to gain a market share is in American ETF capital indexed in Russell's essential indices. Blackrock is the clear leader in this space, despite the fact that Vanguard is already the lower cost provider. For example, since January 31, 2025, Ishare Russell 1000 ETF (IWB) had $ 40.4 billion as wealth compared to $ 5.6 billion in Vanguard Russell 1000 (Vone) Despite the latter being 0.07% cheaper. Restoring the expense ratio can be an opportunity to restore these funds for investors who want products associated with Russell indices.
ETF of American capital associated with S&P indices are a greater category than those associated with Russell indices. Vanguard already leads to the segment of the large lid with Vanguard S&P 500 ETF (VOO)which will exceed SPDR S&P 500 ETF Trust (SPY) as the largest ETF in the world. However, in the S&P index associated with the medium and small capital space, it traces its two competitors, Blackrock and State Street. For example, Vanguard S & P MID-CAP 400 ETF (IVOO) had only $ 2.5 billion as wealth since January 31, 2025, compared to $ 99.5 billion in Ishares Core S&P MID-CAP ETF (IJH) and $ 24.5 billion in SPDR S&P MIDCAP 400 ETF Trust (MDY). Closing this large gap of assets can be difficult for Vanguard, especially since even after lowering the IVOO tariff from 0.10% to 0.07%, it will not yet be the lower cost option. Portfolio SPDR S & P 400 Mid CAP ETF (SPMD) It is a much cheaper option in 0.03% associated with identical index.
In the fixed income area, Vanguard or Blackrock are close competitors, with one or tending to have larger ETF depending on the specific subcategory. Vanguard will hope to use the reduction of tariffs to make entry into those fixed income areas, where it still traces, as ETF of developing market government bonds. In this sub-category, Vanguard Markets Markets Bond Government ETF (VWOB) tracked the largest JP Morgan USD JP Developing Bond Etf (EM) With over $ 9 billion since January 31, 2025. Of all the drops of tariffs made by Vanguard in the Bond ETF category, 0.05% landing in VWOB was the largest. It will hope that this significant reduction in tariffs will help him catch EMB, which traces a well -known JP Morgan Bond index.
Category with the opportunity to consolidate its direction
Vanguard is already the leader of assets in most segments of the ETF category of US capital since January 31, 2025 Vanguard FTSE Developing Markets ETF (VWO) outdated Blackrock's Ishares Core MSCI MSCI MARKETS ETF (IEMG) as the largest broader developing ETF markets. Similarly, its Vanguard ftse Europe Etf (URC) It is the largest exposure to the US with widespread exposure of net capital to Europe. Moreover, he is also the cost leader in Europe's sub-category. The new VGK expenditure ratio of 0.06% sets it far below the average subcategory of the weighted property of 0.20%. This reduction of the latest tariffs will allow Vanguard to return the money to the investors and enable it to put additional margin on competitors.
This dynamics of using its economies of scale to put further pressure on competitors will also be in categories such as dividend and growth/ETF value. Etf as Dividend Evaluation ETF (VYM) AND High yield of high Vanguard International ETF dividend (Vymi) They are the largest and among ETFs at the lowest cost in their subcategories, creating a virtuous cycle of low tariffs and the moment of assets.
Looking forward
It will be interesting to see how the other ETF key issues respond to the aggressive strategy of lowering Vanguard tariffs. It seems likely that only Blackrock has the scale to keep such low tariffs in the essential, indexed market segments. Schwab, State Street and Investo also have competitive tariffs and significant assets in some subcategories. It is likely that other large issues, such as JP Morgan, Capital Group, First Trust and others will focus on areas with higher market margins such as active investments, alternative assets and options based on options. These are areas where Vanguard currently does not compete in a significant way and therefore does not exert unexplained pressure of cost to its peers.
Aniket olive is SVP, ETF Research and Analytics for CFRA, one of the world's largest providers of independent investment research. Aniket founded the First Bridge Data, a major source for Global ETF data and the analytics obtained from CFRA in August 2019.