Vanguard is set to launch seven new bond ETFs in what is an illustrative example of how the ETF industry is growing. The latest editions to the rapidly growing fixed-income ETF family are expected to include three U.S. Treasuries funds, three corporate bonds and one mortgage-backed securities fund. The new Vanguard funds are a shot across the bow for iShares, the ETF giant that currently dominates the fixed-income ETF product line. Currently, iShares offers 27 bond-based ETFs with assets of more than $63 billion, according to Morningstar. Vanguard has a smaller shop with five fixed-income funds whose assets total $8 billion. Vanguard is vying for a popular piece of iShares' business. The top two asset gatherers for iShares in 2009 have been fixed income products: iShares Barclays TIPS Bond ( TIP) and iShares iBoxx $ Investment Grade Corporate Bond Fund ( LQD). (See Fixed-Income ETFs Attracting Investors. Vanguard's strategy revolves around fees. The new ETFs are slated to have an expense ratio of 0.15%. This is the same pricing that iShares uses for its U.S. Treasury ETFs like the Barclays 1-3 Year Treasury Bond Fund ( SHY). The twist is when it comes to the new Vanguard corporate bond and mortgage-backed ETFs, which at 0.15% will be priced lower than comparable iShares ETFs. iShares' Barclays MBS Bond Fund ( MBB), for example, has an expense ratio of 0.25%. Vanguard isn't the first ETF issuer to realize how popular iShares' fixed income funds have become. Bond giant Pimco recently entered the arena, offering a 1-3 Year U.S. Treasury Index Fund ( TUZ) that currently has the winning price point of 0.09%. Pimco, already a fixed-income giant, is well positioned to release more funds that will go toe to toe with iShares ( Pimco Breaks Ground on Active ETFs).