3bps is certainly dirt cheap - but thats purely explicit cost. You have to look at how the fund is managed. If the fund manager is an idiot and forgets to rebalance or makes some other error - that 3bps can pale in comparison to missing the benchmark.
Ah - no - I wouldn't think someone like Vanguard would forget. I was just highlighting that the "headline cost" number isn't the only cost you should consider.
Guys like Vanguard actually make money on their rebalances because they are so big. And they keep it in-house - avoiding the costs (both explicit and implicit) of outsourcing their flows to other firms. So being large brings economies of scale as well.
EDIT: By "make money" I mean they use their cost-savings to make or beat the benchmark
