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Portfolio > Mutual Funds

Vanguard Lowers Fees on 42 Funds

By Janet Levaux

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Vanguard says that 42 of its mutual funds, including seven ETFs and four target-date funds, are now being offered to investors with lower fees.

According to the fund group, those invested in the funds recently saved $55 million as of Friday. This is the third announced reduction in Vanguard’s fiscal year 2015; the reported changes have helped investors in 130 fund shares save a total of $142 million.

“The continued adoption of the Vanguard way of investing, coupled with asset growth related to favorable financial markets, enables us to reduce the cost of investing for all our investors, from financial advisors and institutional investors to IRA savers and 529 plan holders,” said Vanguard CEO Bill McNabb, in a statement.

“While Vanguard has some of the lowest-cost mutual funds and ETFs in the industry, low costs have not come at the expense of providing competitive investment performance, a broad array of funds and other services, and a high level of client service,” McNabb explained.

The reported expense reductions include different classes of fund shares, such as Investor, Admiral ETF, Institutional, and Institutional Plus, for the 12 months ended Oct. 31, 2015; they also encompass seven fund categories — international stock index, international actively managed stock, international bond index, domestic stock index, domestic actively managed stock, target-risk and tax-exempt money market.

The fund company says the following six international ETFs, had lower fees:

  • The $12.4 billion Vanguard FTSE All-World ex-US ETF reported an expense ratio reduction of 7%.
  • The $5.4 billion Vanguard Total World Stock ETF reported an expense ratio reduction of 18%.
  • The $4.9 billion Vanguard Total International Stock ETF reported an expense ratio reduction of 7%.
  • The $4.5 billion Vanguard Total International Bond ETF reported an expense ratio reduction of 21%.
  • The $2.9 billion Vanguard Global ex-U.S. Real Estate ETF reported an expense ratio reduction of 25%.
  • The $2.3 billion Vanguard FTSE All-World ex-US Small-Cap ETF reported an expense ratio reduction of 11%.
  • The $11.3 billion Vanguard High Dividend Yield ETF, a domestic equity offering, also reported an expense ratio reduction of 10%.

Seven funds with Admiral Shares, which are available to advisors without a minimum initial investment, also reported expense ratio reductions, according to Vanguard, including some actively managed funds: the $42.5 billion Vanguard Windsor II Fund and the $10.0 billion Vanguard Explorer Fund.

The FTSE All-World Ex-US ETF (VEU), for instance, recently reported an expense ratio of 0.13% vs. 0.14% in the prior years.

The High Dividend Yield ETF (VYM) saw its expense ratio decline to 0.09% from 0.10%, while Global Ex-US Real Estate (VNQI) had expenses of 0.18% in the 2015 fiscal year vs. 0.24% a year earlier.

Check out a full list of Vanguard’s lower fees.

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