Vanguard Lowers Costs For Shareholders Of Six Index Funds

VALLEY FORGE, PA, SEPTEMBER 27, 2011—Six Vanguard stock index funds have added ultra-low-cost Admiral Shares™, providingshareholders with expense savings of more than 50% over the corresponding Investor Shares in some cases.

The new shares are available for four domestic stock index funds, featuring estimated expense ratios ranging from 0.10% to 0.21%, and two international stock index funds with projected expense ratios of 0.12% and 0.18%.   

 

 Fund

Admiral Shares

Estimated Expense Ratio

Investor Shares

Expense Ratios

Savings

Basis Points

Savings

Percentage

Domestic Stock Index Funds

 

 

 

 

Vanguard Mid-Cap Growth Index Fund

0.10%

0.26%

16

38%

Vanguard Mid-Cap Value Index Fund

0.10%

0.26%

16

38%

Vanguard Small-Cap Growth Index Fund

0.10%

0.26%

16

38%

Vanguard Small-Cap Value Index Fund

0.21%

0.37%

16

57%

International Stock Index Funds

 

 

 

 

Vanguard Developed Markets Index Fund

0.12%

0.22%

10

55%

Vanguard FTSE All World EX-US Index Fund

0.18%

0.35%

17

51%

 A total of 74 Vanguard funds now offer Admiral Shares, including 38 index funds. To qualify for Admiral Shares of Vanguard index funds, shareholders need an account balance of $10,000 or more. Investor Shares require a balance of $3,000.

Vanguard will automatically convert qualifying Investor Shares into the lower-cost Admiral Shares of the same fund over the next several months. Clients may also convert qualifying shares on Vanguard.com. Share conversions within the same fund are tax-free.

Making Indexing More Accessible, Less Costly

Over the past two years, Vanguard has moved to make the indexing strategy more accessible and less costly to investors, as well as broadened its index fund choices: 

  • May 2011: Lowered the minimum initial investment to $1,000 (from $3,000) for the index-based Vanguard Target Retirement Funds. The 12 funds of index funds largely comprise Vanguard’s three “total market” portfolios: Total Stock Market Index Fund, Total International Stock Index Fund, and Total Bond Market II Index Fund. The expense ratios for the Target Retirement Funds range from 0.16% to 0.19%. 
  • October 2010: Lowered the account balance minimums to qualify for Admiral Shares to $10,000 (from $100,000) for Vanguard’s broad market stock and bond index funds. The expense ratio for the Admiral Shares of Vanguard 500 Index Fund is among the lowest in the mutual fund industry at 0.06% (Source: Lipper). 
  • September 2010: Introduced two new suites of index and exchange-traded funds (ETFs) based on broad domestic benchmarks from S&P and Russell. An ETF seeking to track the global real estate market was added in November 2010, followed by a  broad international stock market ETF in January 2011. 
  • May 2010: Offered commission-free trades on all 64 low-cost Vanguard ETFs®, which is one of the largest line-ups of ETFs available without commissions.[1] The expense ratios for Vanguard ETFs range from 0.06% to 0.35%.  

Vanguard: An Indexing Leader

Vanguard pioneered index investing for individuals in 1976 with the launch of the Vanguard 500 Index Fund, which now has $99 billion in net assets. The company launched its first ETF in 2001—Vanguard Total Stock Market ETF (ticker: VTI), which is now one of the largest ETFs in the market with $18.6 billion in net assets. Vanguard oversees approximately $900 billion in 80 index funds, including $165 billion in 64 ETFs.

Investments in Target Retirement Funds are subject to the risks of their underlying funds. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the work force. The funds will gradually shift emphasis from more aggressive investments to more conservative ones based on its target date. An investment in a Target Retirement Fund is not guaranteed at any time, including on or after the target date. 

About Vanguard

Vanguard, headquartered in Valley Forge, Pennsylvania, is one of the world’s largest investment management companies and a leading provider of company-sponsored retirement plan services. Vanguard manages more than $1.6 trillion in U.S. mutual fund assets, and offers more than 170 funds to U.S. investors and more than 60 additional funds in non-U.S. markets.                   

# # #

 All asset figures are as of August 31, 2011.

 Mutual funds are subject to risks, including possible loss of principal. Prices of mid- and small-cap stocks often fluctuate more than those of large-company stocks. Foreign investing involves additional risks including currency fluctuations and political uncertainty. Stocks of companies in emerging markets are generally more risky than stocks of companies in developed countries. Funds that concentrate on a relatively narrow market sector face the risk of higher share-price volatility. Investments in bond funds are subject to interest rate, credit, and inflation.

 Vanguard ETF Shares are not redeemable with an Applicant Fund other than in Creation Unit aggregations. Instead, investors must buy or sell Vanguard ETF Shares in the secondary market with the assistance of a stockbroker. 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.

 For more information about Vanguard funds, visit www.vanguard.com, or call 800-662-7447, to obtain a 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 Marketing Corporation, Distributor.