To no surprise, Vanguard’s latest ETF offering has arrived and started trading a couple of weeks ago. It’s called the Vanguard Europe Pacific ETF (VEA) and it has 1,134 holdings and a low expense ratio of 0.15%. This is quiet a contrast to the average ETF expense ratio of 0.42%.
This new ETF tracks an index of stock performance in 21 countries in Europe, Asia and the Far East. It will be tracking the EAFE index and competing with EFA, the second largest ETF (0.35% expense ratio) in the world. If performance turns out to be similar, then Vanguard will most likely have the edge with its low fees.
However, before adding this new fund to my dbase, I want to see close to a year’s worth of price data to be able judge and compare its performance and to establish a trend.
While there are a variety of duplicate ETFs in various orientations on the market, I welcome that as it increases competition for lower expense ratios, which will benefit the investing public.
As a result, ETF assets have risen dramatically. Sooner or later, many of the bloated and underperforming mutual fund companies may get the hint and finally wake up to the fact that, if they don’t start competing seriously, the interest in their products my continue to wane.