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By Robert Goldsborough

Last week, Vanguard revealed that expense ratios for five large exchange-traded funds had fallen between 5% and 20%, depending on the ETF.

All of the affected ETFs, which already were the lowest-priced or second-lowest-priced options in their respective categories, are devoted to international equities. And with the cuts, all of the funds now either rank as the lowest-cost option in their category or are in a tie for being the lowest-cost option in their respective category.

Because Vanguard says it runs its funds at cost, the firm's contention is that it doesn't actually cut its expense ratios, but rather that the funds' fees have dropped in response to rising asset levels.

Below are the affected ETFs with their expense ratio changes:

  • Vanguard FTSE Emerging Markets ETF (NYSEARCA:VWO), 0.18% to 0.15%
  • Vanguard FTSE All-World ex-US Small-Cap ETF (NYSEARCA:VSS), 0.25% to 0.20%
  • Vanguard Global ex-U.S. Real Estate ETF (NASDAQ:VNQI) , 0.32% to 0.27%
  • Vanguard Total International Stock ETF (NASDAQ:VXUS) , 0.16% to 0.14%
  • Vanguard Total World Stock ETF (NYSEARCA:VT), 0.19% to 0.18%

Disclosure: Morningstar, Inc. licenses its indexes to institutions for a variety of reasons, including the creation of investment products and the benchmarking of existing products. When licensing indexes for the creation or benchmarking of investment products, Morningstar receives fees that are mainly based on fund assets under management. As of Sept. 30, 2012, AlphaPro Management, BlackRock Asset Management, First Asset, First Trust, Invesco, Merrill Lynch, Northern Trust, Nuveen, and Van Eck license one or more Morningstar indexes for this purpose. These investment products are not sponsored, issued, marketed, or sold by Morningstar. Morningstar does not make any representation regarding the advisability of investing in any investment product based on or benchmarked against a Morningstar index.

Source: Vanguard Announces Lower Expense Ratios For 5 International-Stock ETFs