At the beginning of July, Vanguard announced its intent to launch a mostly commission-free ETF selection, citing its desire to continue to provide investors with access to low-cost, diverse assets. At the time, Vanguard already offered its own 77 ETFs commission-free; the fanfare surrounding the announcement centers on the fact that the new suite consists of nearly 1,800 ETFs—the largest offering on the market—and would include assets from large firms, such as iShares and Schwab.
A few days before the inception of the commission-free structure, Vanguard’s head of ETF Product Management, Rich Powers, published a What Do Commission-Free ETFs Mean for You? commentary detailing specific ways the firm’s new offering could help clients, including benefits such as easier ETF selection, streamlined investment management and lower cost on transactions.
On August 21, the initiative was brought to fruition, and the firm announced the suite’s launch through a new banner image on its investor site homepage.
New Homepage Banner Image
The banner image links to a new promotional page that houses all information about the new fee organization, including which funds are and aren’t commission-free as well as which Vanguard ETFs made the cut for Money magazine’s list of 50 recommended funds. The page highlights the firm’s commitment to investors, stressing that its goal is to do the right thing by its clients by decreasing costs to help them succeed financially.
Commission-Free ETFs Page (Truncated)
With this move, Vanguard not only maintained its pledge to positive, low-cost customer experiences—which is a central part of its business model—but it also surpassed the offerings of big names like Schwab, which provides about 250 commission-free ETFs. This marks a trend of firms seemingly racing to the bottom and attempting to dethrone rivals by providing ever-cheapening offerings to appeal to new investors. This pattern is exemplified by Fidelity’s new Zero Minimum mutual funds—which feature a zero expense ratio and no minimum investment requirement—and J.P. Morgan’s new investment app that offers investors’ first 100 ETF and mutual fund trades free.
Corporate Insight will continue monitoring developments in the coming months as we track which ways firms attempt to disrupt the industry while plunging into lower-cost investing options.