It’s that time again—my cheapest ETF model portfolio just got even cheaper, thanks to the most recent move in the EEM vs. VWO saga.

Vanguard’s broad-based emerging markets ETF, VWO, pulled in more than $19 billion in new assets last year, and is now the third-largest ETF in the world. Because Vanguard is run as a co-op, the fees it charges for products directly reflect the costs of managing those products. In the index world, as assets go up, costs go down, so it should surprise no one that Vanguard recently cut the fee on VWO from 0.27 percent to 0.22 percent.

That makes the Vanguard Emerging Markets ETF (NYSEArca: VWO) the cheapest broad-based emerging markets ETF in the world, besting the Schwab Emerging Markets Equity ETF (NYSEArca: SCHE), which charges 0.25 percent.

For the past three-plus years, I’ve been tracking what I call the “Cheapest ETF Portfolio In The World.” It’s a broad-based, aggressive portfolio mixing U.S. and international equity exposure with bonds, commodities and real estate.

When I first designed this portfolio in June 2007, the blended average expense ratio was 0.16 percent. In July it dropped to 0.148 percent, and in December dropped further to 0.1365 percent. Prices didn’t move much until three years later, when Schwab’s aggressive entry into the ETF market helped push fees down to just 0.125 percent.

The Vanguard fund pushes us lower still, all the way down to 0.1235 percent. The new, cheaper portfolio, along with the weights and expense ratios of the funds it holds, is described below:

Can 10 basis points be far behind?

Lately, big announcements of expense ratio cuts seem to be in vogue. In January alone, 37 ETFs announced expense ratio cuts. Effective Jan. 1, 2011, BlackRock cut the expense ratios of 34 foreign iShares ETFs. According to iShares, these cuts are due to increasing AUM levels flowing into the ETFs.

In mid-January, AdvisorShares followed suit by lowering the expense ratio on its Cambria Global Tactical Asset ETF (NYSEArca: GTAA). Like BlackRock, AdvisorShares said that rising levels of assets under management prompted the expense cut.

Finally, in late January, Van Eck announced price cuts for its Indonesia and Poland ETFs. It didn’t cite a reason for doing so, although iShares’ inclusion of its Indonesia and Poland ETFs in its mass expense ratio cut may have had something to do with it. Van Eck’s cuts, however, are only in effect through May 1, 2012, while the other issuers’ cuts are permanent.

This is all a very virtuous circle for investors. As more ETF issuers enter segments that previously had only one fund, prices fall. And, as more and more assets flow into the market, prices fall as well.

And all of those savings fall straight into investors’ pocketbooks.