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Asset management giant Vanguard announced broad fee cuts for many mutual funds and exchange-traded funds on Monday, reinforcing its standing as one of the cheapest options for investors.
The move reduces fees on 87 different funds, and 168 total share classes of those funds. The average fee cut is 20% per share class. Vanguard said this is its biggest fee cut ever and will save investors about $350 million this year, based on current asset levels.
“We’re proud to build on Vanguard’s legacy of lowering the costs of investing—which we have done more than 2,000 times since our founding—by announcing our largest ever set of expense ratio reductions. Lower costs enable investors to keep more of their returns, and those savings compound over time,” Vanguard CEO Salim Ramji said in a press release.
The list of cuts includes actively managed and index-based products, with many of the funds representing billions of dollars. Stocks, bonds and commodities products are all included in the reductions. Some of the funds on the Vanguard list include:
Fund fees for mutual funds and ETFs are assessed as an annual percentage of total assets under management for the share class.
The fee cuts to VEGBX and some other actively managed bond funds is notable because active fixed income is emerging as a growth area for the exchange-traded fund industry. The booming popularity of ETFs, which can be purchased more easily than many mutual funds, is often cited as a key factor in driving down management fees for stock funds in recent decades.
Vanguard said its actively managed fixed income funds and ETFs have a weighted average expense ratio of 0.10% versus an industry average of 0.53%.
Vanguard has long been a leader in lowering fees among asset managers, a tradition dating back to its founder, Jack Bogle. Monday’s announcement is a sign that the trend could continue under Ramji, who took over as CEO in 2024 and previously worked at rival BlackRock.
The fee cuts come less than a month after Vanguard agreed to pay more than $100 million to settle charges from the Securities and Exchange Commission related to disclosures around some of its retirement products.
Vanguard, one of the largest investment management companies in the world, has announced a significant fee reduction for nearly 100 funds, including several popular exchange-traded funds (ETFs) with billions of dollars in assets.
This move is part of Vanguard’s ongoing efforts to provide cost-effective investment options for its clients and to remain competitive in the ever-evolving financial market. The fee cuts range from a few basis points to more significant reductions, making Vanguard’s funds even more attractive to investors seeking low-cost investment options.
Some of the ETFs that will benefit from the fee cuts include the Vanguard Total Stock Market ETF, the Vanguard Total Bond Market ETF, and the Vanguard Total International Stock ETF, all of which have billions of dollars in assets under management.
Investors who hold these funds in their portfolios will see a decrease in their expense ratios, ultimately leading to higher returns over time. With these fee reductions, Vanguard continues to solidify its position as a leader in the investment management industry, offering high-quality funds at competitive prices.
Overall, this fee cut is great news for investors who are looking to minimize costs while maximizing their investment returns. Vanguard’s commitment to providing low-cost, high-quality investment options is a win-win for investors seeking to grow their wealth over the long term.
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