Not surprisingly, Vanguard, the third-largest U.S. ETF sponsor, has something to say about the ongoing 2012 ETF fee battle. Pennsylvania-based, known for being one of the ETF industry's low-cost leaders, announced fee reductions for 11 of its ETFs. The fee reductions took effect last week, according to a statement issued by Vanguard.

The 11 Vanguard ETFs that are now home to lower fees include the Vanguard Intermediate-Term Corporate Bond (VCIT), which now has an expense ratio of 0.12 percent down from 0.14 percent. The Vanguard Intermediate-Term Government Bond ETF (VGIT), the Vanguard Long-Term Corporate Bond ETF (VCLT) and the Vanguard Long-Term Government Bond ETF (VGLT) also saw fee reductions to 0.12 percent per year from 0.14 percent.

Other fee reductions include the Vanguard Mortgage-Backed Securities Index ETF (VMBS) going to 0.12 percent from 0.15 percent. The Vanguard Russell 1000 Value Index ETF (VONV) now charges 0.15 percent down from 0.16 percent while the Vanguard Russell 2000 Index ETF (VTWO) saw its fees reduced to 0.21 percent from 0.22 percent.

Vanguard lowered fees on another small-cap ETF, taking the expense ratio on the Vanguard Russell 2000 Value Index ETF (VTWV) to 0.32 percent per year from 0.33 percent. The Vanguard Russell 3000 Index ETF (VTHR) is now charging 0.15 percent down from 0.16 percent.

The Vanguard Short-Term Corp Bond Index ETF (NASDAQ: VSCH) and the Vanguard Short-Term Government Bond Index ETF (VGSH) both saw fee cuts to 0.12 percent per year from 0.14 percent.

Over the past year, a broad swath of ETF issuers have lowered fees in an effort to attract fresh capital from investors. Vanguard's most recent fee-cut announcement is by no means the firm's first and issuers such as Charles Schwab (SCHW) and State Street's (STT) State Street Global Advisors (SSgA) have announced fee reductions of their own. SSgA is the second-largest U.S. ETF sponsor.

BlackRock's (BLK) iShares, the world's largest ETF issuer and the firm often viewed as Vanguard's primary rival, announced fee cuts of its own earlier this year. In late November, Invesco's (IVZ) PowerShares unit, the fourth-largest U.S. ETF sponsor, signaled it would not be left out of the fee war by announcing lower fees on six of its ETFs.

For its part, Vanguard's fee cuts may not be a direct response to what rival firms are doing, but rather the result of the firm's corporate structure and its ability to drive cost savings through economies of scale.

"Other investment firms may lower costs as a business strategy to attract assets," the firm said in the statement. "For Vanguard, our unique client-owned corporate structure is what drives the low costs of our funds. Since we are a mutually owned firm, low costs are an outcome that is directly tied to how much it costs us to manage our funds. Economies of scale and a focus on keeping operating costs low have resulted in a long track record of Vanguard lowering costs across the board."

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