Vanguard has cut the expense ratios of 168 mutual fund and exchange-traded share classes across 87 funds, effectively immediately, which will save Vanguard’s investors more than $350 million in 2025 alone, said a Feb. 3 news release.
The measure marks the largest annual expense ratio reduction in Vanguard’s nearly 50-year history, the firm said in the release.
Vanguard also noted in the release that its actively managed fixed income funds and ETFs now have a weighted-average expense ratio of 0.10% versus the industry average of 0.53% for active funds and ETFs from other firms. Vanguard’s bond index funds now have a weighted-average expense ratio of 0.05%, less than one-half the average of 0.11% from its peers.
“Bonds are poised to play a crucial role in investors’ portfolios going forward,” said Greg Davis, Vanguard president and CIO, in the release. “We expect yields to settle at levels higher than those seen over the past 15 years. This will not only provide attractive inflation-adjusted income, but also reinforce the traditional role of bonds as the ballast in investors’ portfolios.”
Expense ratios were also reduced across Vanguard’s U.S. equity, international equity, and money market funds as well.
The full list of fee cuts can be found here.
Vanguard has total AUM of about $10.1 trillion and a total of 428 mutual funds and ETFs.