May 25, 2012

Vanguard Slashes Frequent Trading Fees on 33 Funds

The fees that were meant to discourage frequent trading ‘are no longer needed,’ Vanguard says

Vanguard determined that the frequent-trading fees 'are no longer needed.' Vanguard determined that the frequent-trading fees 'are no longer needed.'

Vanguard announced Wednesday that it is eliminating frequent trading fees on more than 30 mutual funds, including 19 equity index funds and 14 actively managed funds. The cutting of so-called “contingent redemption fees” on the 33 funds is effective immediately.

 “After careful analysis of investor transaction activity and net cash flow, Vanguard determined that these fees, one of several measures in place to discourage frequent trading, are no longer needed,” the company said in a release.

Headquartered in Valley Forge, Pa., Vanguard is one of the world’s largest investment management companies, managing nearly $1.84 trillion in U.S. mutual fund assets.

Additional measures include prohibiting an investor’s purchases or exchanges into a fund account for 60 calendar days after the investor has redeemed or exchanged out of that fund account, according to Vanguard. The fund company also retains the right to reject any purchase request if it would negatively affect a fund’s operation or performance.

Two Vanguard funds, the FTSE All-World ex-U.S. Small-Cap Index and the Global ex-U.S. Real Estate Index, will continue to assess non-contingent transaction fees on share redemptions.

Vanguard fund redemption fees are as follows:

 Former Fee

Developed Markets Index

Emerging Markets Select Stock

Emerging Markets Stock Index

European Stock Index

FTSE All-World ex-US Index

International Explorer

International Growth

International Value

Pacific Stock Index

Tax-Managed International

Total International Stock Index

Total World Stock Index

2% Fee on Shares Redeemed Within Two months of Purchase

Consumer Discretionary Index

Consumer Staples Index

Energy Index

Financials Index

Health Care Index

Industrials Index

Information Technology Index

Materials Index

Telecommunications Services Index

Utilities Index

2% Fee on Shares Redeemed Within One Year of Purchase

Capital Opportunity

Convertible Securities

Energy

Health Care

High-Yield Corporate

Market Neutral

Precious Metals and Mining

PRIMECAP

PRIMECAP Core

REIT Index

Selected Value

Read Vanguard Looks at Ethnicity, Savings at AdvisorOne.

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