Vanguard: World's Largest Stock and Bond Funds Lower Expense Ratios

VALLEY FORGE, PA (April 28, 2017) — Vanguard reported lower expense ratios today for 82 mutual fund and ETF shares, including the world’s two largest stock funds and largest bond fund.1

Vanguard Total Stock Market Index Fund, with $550 billion in assets, reported lower expense ratios for four share classes:

  • Institutional (VITSX): a half basis point to 0.035%.
  • Admiral (VTSAX): one basis point to 0.04%.
  • ETF (VTI): one basis point to 0.04%.
  • Investor (VTSMX): one basis point to 0.15%.

Introduced in 1992, the Total Stock Market Index Fund provides diversified exposure to the entire U.S. stock market by seeking to track the CRSP U.S. Total Market Index. In July 2013, the Fund crossed $267 billion, becoming the largest mutual fund.2

The $310 billion Vanguard 500 Index Fund saw reductions across the following share classes:

  • Admiral Shares (VFIAX): one basis point to 0.04%.
  • ETF (VOO): one basis point to 0.04%.
  • Investor (VFINX): two basis points to 0.14%.

The 500 Index Fund was introduced in 1976 by Vanguard Founder John C. Bogle, bringing the indexing strategy from the institutional market to individual investors for the first time. It is the largest fund seeking to track the S&P 500 Index.

The $178 billion Vanguard Total Bond Market Index Fund saw reductions across the following share classes:

  • Institutional Plus (VBMPX): one basis point decline to 0.03%.
  • Institutional (VBTIX): one basis point to 0.04%.
  • Admiral (VBTLX): one basis point to 0.05%.
  • ETF (BND): one basis point to 0.05%.
  • Investor (VBMFX): one basis point to 0.15%.

The Total Bond Market Index Fund, introduced in 1986 as Vanguard’s second index fund and the industry’s first fixed income index fund, became the largest bond fund in May 2015.


ETF EXPENSE REDUCTIONS

In addition to the three ETFs listed above, 14 additional Vanguard ETFs experienced expense ratio decreases: FTSE Developed Markets (VEA), Value (VTV), Growth (VUG), Short-Term Bond (BSV), Mid-Cap (VO), Small-Cap (VB), Intermediate-Term Bond (BIV), Large-Cap (VV), Small-Cap Value (VBR), Mid-Cap Value (VOE), Small-Cap Growth (VBK), Extended Market (VXF), Long-Term Bond (BLV), and Mid-Cap Growth (VOT).

Vanguard ETFs continue to receive broad acceptance by investors, especially financial intermediaries who value Vanguard’s low costs and indexing expertise. Introduced in 2001, Vanguard ETFs have $681 billion in assets across 70 products.


CUMULATIVE SAVINGS REACH $324 MILLION

Investors saved an estimated $159 million based on total assets across the funds in this round of expense ratio changes.3 To date, Vanguard has reported five rounds of expense ratio reductions for an estimated $324 million in cumulative savings based on total assets across 221 index and actively managed fund and ETF shares.4

A complete list of expense ratio changes for funds with fiscal year ending December 31, 2016 can be found on Vanguard’s pressroom: pressroom.vanguard.com.

 

TWO SHARES REPORT INCREASES

Vanguard Market Neutral Fund Investor (VMNFX) and Institutional (VMNIX) shares experienced 14 and 16 basis point increases to 1.60% and 1.52%, respectively. Unlike most other Vanguard funds, Market Neutral uses both long- and short-selling strategies. The expense ratio increases in this fund were a result of an increase in dividend expense on securities sold short. When a cash dividend is declared on a stock that the fund has sold short, the fund is required to pay an amount equal to that dividend to the party from which the fund borrowed the stock and to record the payment of the dividend as an expense.


About Vanguard

Vanguard is one of the world’s largest investment management companies. As of March, 2017, Vanguard managed $4.2 trillion in global assets. The firm, headquartered in Valley Forge, Pennsylvania, offers 368 funds to its more than 20 million investors worldwide. For more information, visit vanguard.com.

 

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1Source: Morningstar data as of March 31, 2017.
2Source: Morningstar.
3Estimated savings for the identified funds is the difference between prior and current expense ratios multiplied by average AUM. Average AUM is based on daily average assets during a month, which are then averaged over the 12-months of the fiscal year ending December 31, 2016.
4Cumulative figure for all share classes from December 2016 through April 2017 for the identified funds. Estimated savings is the difference between prior and current expense ratios multiplied by average AUM. Average AUM is based on daily average assets during a month, which are then averaged over the 12-months of the fiscal year. 

Assets figures as of March 31, 2017 unless otherwise noted. 

Vanguard provides its services to the Vanguard funds at cost. More information about Vanguard funds, including at-cost services, is available in a fund’s prospectus. 

For more information about Vanguard funds and ETFs, visit vanguard.com or call 800-662-7447 to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information about a fund 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. 

Past performance is no guarantee of future results.


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

U.S. Patent Nos. 6,879,964; 7,337,138; 7,720,749; 7,925,573; 8,090,646; and 8,417,623.

Vanguard Marketing Corporation, Distributor.