Industry watchers are stunned that Vanguard, a champion of low fees, has caved in to the realities of lower assets by raising fees on 31 of its 110 funds, albeit a scant average of 0.05%. But the truth is, poor market performance has ravaged assets at many fund shops, and grappling with lower assets, they are looking for ways to control costs, MarketWatch reports.
At Vanguard, assets now stand at $1 trillion, down from $1.3 trillion at the end of 2007.
Its a testament to the market environment that even a fund family [like Vanguard] thats been taking in new money has seen its assets decline so much that it has to raise its expense ratios, said Dan Culloton, associate director of fund analysis at Morningstar.
Anecdotally, we are seeing expense ratios go up at other fund firms for similar reasons, Culloton added.