Vanguard Announces Largest Ever Expense Ratio Reduction

Reductions Reflected Across 168 Vanguard Mutual Fund and ETF Share Classes

Changes Represent More Than $350 Million¹ in Savings for Investors

VALLEY FORGE, Pa., Feb. 3, 2025 /PRNewswire/ -- Vanguard today announced historic expense ratio reductions to one hundred sixty-eight mutual fund and exchange-traded share classes across eighty-seven funds. The reductions will save Vanguard's investors more than $350 million in 2025 alone, the largest annual expense ratio reduction in Vanguard's nearly 50-year history.  

"Jack Bogle founded Vanguard in 1975 with a simple purpose—to design an investor-owned company that would serve a single constituency, our clients," said Salim Ramji, Vanguard's Chief Executive Officer. "At Vanguard, we're focused on creating value for our investors, not extracting value from them. 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."

In investing, you get what you don't pay for. Costs matter.

Vanguard's index and active products have low costs across all asset classes—equity, bond, money market, and multi-asset solutions. That track record of lower costs is directly correlated to the long-term performance of the firm's mutual funds and ETFs–84% of Vanguard funds have outperformed their peer group averages over the past decade.² This latest expense ratio reduction will allow clients to retain an even greater share of their long-term returns.

"Vanguard's strength as an industry-leading active manager and index pioneer has only grown over the years, in part due to our low costs," said Greg Davis, Vanguard President and Chief Investment Officer. "When thinking about our actively managed funds, our portfolio managers can take investment risk strategically as they don't have to overcome the hurdle of high fees to add value."

Crucial role for fixed income—active management at index fund fees

Vanguard Fixed Income Group is the largest manager of bond mutual funds and ETFs,³ and for more than 40 years has distinguished itself with deep investment capabilities, disciplined security selection processes, and rigorous risk management techniques, which has resulted in consistent long-term performance.

Vanguard investors have access to world-class active fixed income management—91% of Vanguard's active bond funds and ETFs outperformed their peer group average over the past decade.⁴ Vanguard's actively managed fixed income funds and ETFs have a weighted-average expense ratio of 0.10% versus the industry average of 0.53% for active funds and ETFs from other firms.⁵ Vanguard's bond index funds have a weighted-average expense ratio of 0.05%, less than half the average of 0.11% from our competitors.⁶

"Bonds are poised to play a crucial role in investors' portfolios going forward," said Mr. Davis. "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 ratio reductions across Vanguard's fund lineup

In addition to Vanguard's world-class lineup of bond mutual funds and ETFs, these historic expense ratio reductions will lower costs across Vanguard's U.S. equity, international equity, and money market funds as well.

A full list of expense ratio reductions can be found here. The changes in expense ratios are effective immediately.

About Vanguard

Founded in 1975, Vanguard is one of the world's leading investment management companies. The firm offers investments, advice, and retirement services to tens of millions of individual investors around the globe - directly, through workplace plans, and through financial intermediaries. Vanguard operates under a unique, investor-owned structure where Vanguard fund shareholders own the funds, which in turn own Vanguard. As such, Vanguard adheres to a simple purpose: To take a stand for all investors, to treat them fairly, and to give them the best chance for investment success. For more information, visit vanguard.com.

¹ Comparison uses AUM as of 11/2024. There is no guarantee that any individual investor will save money due to the reductions in expense ratios. Figures are estimates and should not be relied on. For illustrative purposes only. See www.corporate.vanguard.com/feecuts for details.

² Source: LSEG Lipper. Number of Vanguard funds that outperformed their Lipper peer-group averages for periods ended December 31, 2024: For the ten-year period, 265 of 317 Vanguard funds. Results will vary for other time periods. Only funds with a minimum ten-year history were included in the comparison. Note that the competitive performance data shown represent past performance, which is not a guarantee of future results, and that all investments are subject to risks. For the most recent performance, visit our website at vanguard.com/performance.

³ Source: Morningstar, assets under management for bond mutual funds and ETFs, November 30, 2024.

⁴ Source: LSEG Lipper. Number of Vanguard funds that outperformed their Lipper peer-group averages for periods ended December 31, 2024: For the ten-year period, 40 of 44 actively managed bond funds. Results will vary for other time periods. Only funds with a minimum ten-year history were included in the comparison. Note that the competitive performance data shown represent past performance, which is not a guarantee of future results, and that all investments are subject to risks. For the most recent performance, visit our website at vanguard.com/performance.

⁵ Source: Vanguard calculations using Morningstar data. Expense ratios weighted by assets as of November 30, 2024.

⁶ Source: Vanguard calculations using Morningstar data. Expense ratios weighted by assets as of November 30, 2024.

For more information about Vanguard funds, visit vanguard.com to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information are contained in the prospectus; read and consider it carefully before investing.

Vanguard ETF Shares are not redeemable with the issuing Fund other than in very large aggregations worth millions of dollars. Instead, investors must buy and sell Vanguard ETF Shares in the secondary market and hold those shares in a brokerage account. In doing so, the investor may incur brokerage commissions and may pay more than net asset value when buying and receive less than net asset value when selling.

All investing is subject to risk, including the possible loss of the money you invest.

Vanguard is reducing expense ratios for certain share classes of some funds. There is no guarantee that any individual investor will save money due to the reductions in fund expense ratios. Not all fund share classes will have a reduced expense ratio and therefore not all investors will experience the estimated savings. Investors that purchase the relevant funds after the expense ratios have been reduced will not experience savings. Savings means future money not spent on expense ratios, and does not entail a rebate or deposit of any sort. Savings figures are estimates and should not be relied upon. Savings is based on data as of November 30, 2024; if other data is used, savings may differ. Estimated savings accrue to existing investors holding relevant share classes for 2024 and 2025. For illustrative purposes only. Past performance is not indicative of future results.

Be aware that fluctuations in the financial markets and other factors may cause declines in the value of your account. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income.

Diversification does not ensure a profit or protect against a loss.

Investments in bonds are subject to interest rate, credit, and inflation risk.

Investments in stocks or bonds issued by non-U.S. companies are subject to risks including country/regional risk and currency risk. These risks are especially high in emerging markets.

Vanguard Marketing Corporation, Distributor of the Vanguard Funds.

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