As summer zooms by all too quickly, I have to remind myself that not everyone I meet at backyard barbecues finds ETFs as fascinating a subject as do you and I.
So I hope you’ll indulge me as I share why we here at Vanguard have been quietly celebrating two big ETF milestones: It’s been 15 years since we first brought to bear our indexing expertise in the form of an ETF, and you’ve responded—entrusting increasingly more of your clients’ assets to our diversified stable of ETFs as it’s grown.
(What was that first ETF? Our Total Stock Market ETF, or VTI, launched in 2001. Today, $60 billion in assets later, its mission remains the same: to provide a low-cost, broadly diversified portfolio.)
The other accomplishment, and one that has a discernible positive impact on you and your clients’ portfolios, is Vanguard’s recently surpassing $500 billion in ETF assets.
Half a trillion dollars in ETFs is important for us and for you, for a couple of reasons:
- Lowering costs directly. Asset growth has helped us drive down operating costs, and we pass along the savings to investors in the form of lower expense ratios. Your clients get to keep more of what they earn and you get increased discretion in adjusting your fees to reflect the value you provide.
- Lowering costs indirectly. Even people who don’t choose us can benefit from our commitment to lowering investment costs. The Vanguard Effect™—the phenomenon of Vanguard’s peers tending to lower their fees in markets where Vanguard competes—has been well-chronicled in the financial media.
We apply that focus on lowering costs throughout our ETF lineup. Over the years, we’ve expanded our ETF offerings to include a broad mix of equity and fixed income products across size, value and growth, sector, and other characteristics. Overall, that means we’re able to provide a wide variety of tools that can provide long-term strategic asset allocation functionality (such as our Vanguard ETF® strategic model portfolios) down to the tactical flexibility to take advantage of near-term opportunities.
Thank you for your trust in our philosophy and our products
With more than $2 trillion in ETFs managed in the United States (according to the Investment Company Institute), clearly, the ETF tide has lifted lots of boats in our industry. For me, it’s humbling to think that Vanguard manages nearly one-quarter of that total. It’s a responsibility we take seriously, and we’re honored that advisors, their clients, and other investors have seen fit to put us in such a position.
So even if, while you’re tending the grill, you don’t daydream about falling expense ratios or gaining a particular sector exposure with just the right ETF, know that we’re constantly working toward both on your behalf.
- All investing is subject to risk, including the possible loss of the money you invest.
- For more information about Vanguard funds or Vanguard ETF Shares, visit advisors.vanguard.com or call 800-997-2798 to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information are contained in the prospectus; read and consider it carefully before investing.
- Vanguard ETF Shares are not redeemable with the issuing fund other than in very large aggregations worth millions of dollars. Instead, investors must buy and sell Vanguard ETF Shares in the secondary market and hold those shares in a brokerage account. In doing so, the investor may incur brokerage commissions and may pay more than net asset value when buying and receive less than net asset value when selling.