Vanguard uses ETF splits to tighten bid-ask spreads

Investors in five Vanguard equity index ETFs will see their minimum buy-in drop to under $90 per share starting April 21, 2026. The lower price point is intended to attract more traders and increase trading volume. Higher volume typically leads to tighter bid-ask spreads, reducing the transaction costs investors pay every time they trade.

Vanguard announced stock splits for these five funds, excluding flagship funds like the Vanguard S&P 500 (VOO) and the Vanguard Total Stock Market ETF (VTI). While VOO and VTI have share prices of roughly $600 and $300 respectively, they are already efficient in terms of volume and spreads. In contrast, the five ETFs receiving splits are currently characterized by lower volume and wider spreads. For example, the Vanguard S&P 500 Growth fund (VOOG) has a spread that can reach $0.45 per share, compared to roughly a penny per share for VOO. A purchase of 100 shares of VOOG with a $0.45 spread results in a transaction cost of $22.50 paid to market makers. The splits are designed to optimize these funds by bringing their share prices below $100 to increase liquidity and reduce those costs.