Key Takeaways
- The Vanguard Group on Monday announced the largest management fee cuts in its history.
- The move will reduce the cost of putting money in 87 exchange-traded funds and mutual funds, Vanguard said.
- Vanguard estimated the move will save investors $350 million in 2025 alone.
The Vanguard Group on Monday slashed fees of nearly 90 funds, which the investment management giant called the largest rate cut in its almost 50-year history.
Vanguard said that it reduced the management fees for 168 share classes across 87 exchange-traded funds (ETFs) and mutual funds. The firm estimated the move will save investors $350 million in 2025 alone.
Vanguard’s actively managed fixed income funds and ETFs now have an weighted-average expense ratio of 0.10% compared with the industry average of 0.53%, the privately held firm said. Vanguard added that bond index funds now have a weighted-average expense ratio of 0.05%, “less than half the average of 0.11% from our competitors.”
“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,” CEO Salim Ramji said. “Lower costs enable investors to keep more of their returns, and those savings compound over time.”
