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Vanguard Launches Bid to Lead Broad Market

Vanguard launched nine ETFs on Sept. 9 targeting the style-box matrix based on S&P indexes with growth, value and blend versions of the large-cap S&P 500, the S&P Mid-Cap 400 and the S&P Small-Cap 600. All will compete with existing SPDRs and iShares products based on the same indexes.

Some analysts may brush these off as "me too" products, but Vanguard knows how to play "me too" better than anyone. Most Vanguard products on the market fit this description, yet the company has quietly entrenched itself as the third-largest ETF provider, with more than $110 billion in assets.

Vanguard introduced its first two ETFs in 2001, then sat quietly until January 2004 when it introduced 14 more. Only a licensing disagreement kept the 2004 batch from tracking S&P indexes. So Vanguard brought them out based on MSCI indexes.

Now, 34 years after the introduction of the Vanguard 500 Index Fund (VFINX), the ETF version has arrived. According to a Vanguard article, the new Vanguard S&P 500 ETF (VOO) features an expense ratio of 0.06%, the lowest expense ratio in the industry for an ETF based on the S&P 500 Index or any other large-capitalization domestic benchmark. All nine of the new ETFs are eligible for commission-free trading by Vanguard brokerage clients. The new ETFs:

  • Vanguard S&P 500 ETF (VOO) has an expense ratio of 0.06% and will compete directly with SPDR S&P 500 (SPY) and iShares S&P 500 (IVV), which have a 0.09% expense ratio.
  • Vanguard S&P 500 Growth ETF (VOOG) has an expense ratio of 0.15% and will compete directly with iShares S&P 500 Growth (IVW), which has a 0.18% expense ratio.
  • Vanguard S&P 500 Value ETF (VOOV) has an expense ratio of 0.15% and will compete directly with iShares S&P 500 Value (IVE), which has a 0.18% expense ratio.
  • Vanguard S&P Mid-Cap 400 ETF (IVOO) has an expense ratio of 0.15% and will compete directly with SPDR S&P MidCap 400 (MDY), which has a 0.25% expense ratio, and iShares S&P MidCap 400 (IJH), which has a 0.20% expense ratio.
  • Vanguard S&P Mid-Cap 400 Growth ETF (IVOG) has an expense ratio of 0.20% and will compete directly with iShares S&P MidCap 400 Growth (IJK) which has a 0.25% expense ratio.
  • Vanguard S&P Mid-Cap 400 Value ETF (IVOG) has an expense ratio of 0.20% and will compete directly with iShares S&P MidCap 400 Value (IJJ), which has a 0.25% expense ratio.
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