The reduction in fees from the second largest asset manager in the world will allow investors to save about $3.5 million a year.
This reduction occurs amid fierce competition among the largest global ETF providers—such as Vanguard, BlackRock, and State Street—who are fighting for market share and dominance in the sector.
Vanguard, the American investment company managing assets of over $10.5 trillion worldwide, is reducing fees on nearly half of its European bond ETFs. This move is part of a strategy to strengthen its position in the fixed-income instruments sector.
The reduction affects seven out of 15 fixed-income ETFs offered by Vanguard in Europe. These funds track, among other things, British gilts and government bonds from emerging markets. The fees on them will be reduced by two basis points. According to the company, this will allow investors to save about $3.5 million annually.
After the changes, the average weighted expense ratio for Vanguard's European fixed-income funds and actively managed funds will be 0.11%. The reduction in fees coincides with a broader battle for leadership in the ETF market among the largest global players, including BlackRock, State Street, and Vanguard itself.
Vanguard's CEO, Salim Ramji, told the Financial Times in September 2024 that the company is preparing for a 'new push' in the bond market, citing its 'extreme' inefficiency and investment opportunities. He emphasized that expanding the company's presence in the fixed-income sector is a key priority, along with diversifying beyond traditional equities.
John Kleborn, head of Vanguard's European division, noted that 'the bond market is now twice the size of the equity market by volume, but remains opaque and expensive. Investors deserve better.' He added that the company plans to expand its fixed-income product line in the coming months.
According to Debbie Fuhr, founder of the research firm ETFGI, companies are increasingly competing by lowering fees, as investment flows and assets are primarily going into low-cost products. 'The trend is clear: investors are choosing cheaper products. With the growth of assets, companies can afford to lower fees,' she said.
Earlier in 2025, Vanguard announced the 'largest fee reduction' in its history in the U.S. The company reduced fees across 168 share classes in 87 funds, which, according to its estimates, will allow investors to save more than $350 million over the year.
Additionally, last year Vanguard changed the fee structure on its investment website in the UK, introducing a new fixed monthly fee of £4. This innovation increased costs for self-directed investors, while users of managed services started paying less. Company representatives stated that the changes are necessary to cover 'growing expenses' for customer service and to encourage less experienced investors to entrust management to professionals.