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Vanguard reports lower expense ratios for 40 ETFs

Vanguard has a long history of lowering the cost of investing for its clients. The reason: Vanguard is owned by its funds, which, in turn, are collectively owned by the fund shareholders. Vanguard provides services to the funds at cost, which enables economies-of-scale savings to be passed along to clients in the form of lower expense ratios as fund assets grow.

In the past 15 months, Vanguard has introduced a range of low-cost products and services, including:

  • A bundled 401(k) plan for small companies that offers low-cost index funds and ETFs.
  • A new, index-based target-date retirement fund for young investors featuring an estimated expense ratio of 0.18%.
  • The addition of ultra-low-cost Admiral Shares to six domestic and international equity index funds, with expense ratios ranging from 0.10% to 0.21%.

A key difference between Vanguard and some competitors in the investment management industry is that low costs are not a marketing ploy or a loss leader—a product sold below its market cost to stimulate other sales. Our expense ratios are not artificially increased or decreased based on market share goals or revenue targets. As competitors periodically try to match or beat our prices in a few high-profile categories, it is difficult to match Vanguard’s low-costs across the spectrum of investment products and services.  

 With respect to ETFs, in particular, Vanguard has reported expense ratio reductions for 40 exchange-traded funds since December 2011. 

ETF expense ratio change summary

Vanguard fund

Ticker symbol

Former expense ratio

New expense ratio

 

Effective date

Fiscal year over year decrease (40)

Consumer Discretionary

VCR

0.24%

0.19%

Dec-11

Consumer Staples

VDC

0.24

0.19

Dec-11

Energy

VDE

0.24

0.19

Dec-11

Financials

VFH

0.27

0.23

Dec-11

Health Care

VHT

0.24

0.19

Dec-11

Industrials

VIS

0.24

0.19

Dec-11

Information Technology

VGT

0.24

0.19

Dec-11

Intermediate-Term Corporate Bond

VCIT

0.15

0.14

Dec-11

Intermediate-Term Government Bond

VGIT

0.15

0.14

Dec-11

Long-Term Corporate Bond

VCLT

0.15

0.14

Dec-11

Long-Term Government Bond

VGLT

0.15

0.14

Dec-11

Materials

VAW

0.24

0.19

Dec-11

Mega Cap 300

MGC

0.13

0.12

Dec-11

Mega Cap 300 Growth

MGK

0.13

0.12

Dec-11

Mega Cap 300 Value

MGV

0.13

0.12

Dec-11

Short-Term Corporate Bond

VCSH

0.15

0.14

Dec-11

Short-Term Government Bond

VGSH

0.15

0.14

Dec-11

Telecommunication Services

VOX

0.24

0.19

Dec-11

Utilities

VPU

0.24

0.19

Dec-11

FTSE All-World ex-US

VEU

0.22

0.18 

Feb-12

FTSE All-World ex-US Small-Cap

VSS

0.33

0.28 

Feb-12

High Dividend Yield

VYM

0.18

0.13 

Feb-12

MSCI Emerging Markets

VWO

0.22

0.20 

Feb-12

Total International Stock

VXUS

0.2

0.18 

Feb-12

Total World Stock

VT

0.25

0.22

Feb-12

Total Bond Market

BND

0.11

0.1

25-Apr

Extended Market

VXF

0.16

0.14

26-Apr

Growth

VUG

0.12

0.1

26-Apr

Large-Cap

VV

0.12

0.1

26-Apr

Mid-Cap

VO

0.12

0.1

26-Apr

Mid-Cap Growth

VOT

0.12

0.1

26-Apr

Mid-Cap Value

VOE

0.12

0.1

26-Apr

S&P 500

VOO

0.06

0.05

26-Apr

Small-Cap

VB

0.17

0.16

26-Apr

Small-Cap Growth

VBK

0.12

0.1

26-Apr

Small-Cap Value

VBR

0.23

0.21

26-Apr

Total Stock Market

VTI

0.07

0.06

26-Apr

Value

VTV

0.12

0.1

26-Apr

Dividend Appreciation

VIG

0.18

0.13

29-May

REIT

VNQ

0.12

0.1

29-May

Fiscal year over year increase* (8)

Russell 1000 Value

VONV

0.15%

0.16%

Dec-11

Russell 2000

VTWO

0.19

0.22

Dec-11

Russell 2000 Value

VTWV

0.27

0.33

Dec-11

Russell 3000

VTHR

0.15

0.16

Dec-11

S&P Mid-Cap 400

IVOO

0.16

0.17

Dec-11

S&P Mid-Cap 400 Value

IVOV

0.21

0.24

Dec-11

S&P Small-Cap 600

VIOO

0.15

0.16

Dec-11

S&P Small-Cap 600 Value

VIOV

0.2

0.22

Dec-11

No change (16)

MSCI Pacific

VPL

0.14%

0.14%

#

n/a

MSCI Europe

VGK

0.14

0.14

#

n/a

Short-Term Bond

BSV

0.11

0.11

#

n/a

Inter-Term Bond

BIV

0.11

0.11

#

n/a

Long-Term Bond

BLV

0.11

0.11

#

n/a

MSCI EAFE

VEA

0.12

0.12

#

n/a

Extended Duration Treasury

EDV

0.13

0.13

#

n/a

Mortgage-Backed Securities

VMBS

0.15

0.15

#

n/a

S&P 500 Value

VOOV

0.15

0.15

#

n/a

S&P 500 Growth

VOOG

0.15

0.15

#

n/a

S&P Mid-Cap 400 Growth

IVOG

0.2

0.2

#

n/a

S&P Small-Cap 600 Growth

VIOG

0.2

0.2

#

n/a

Russell 1000

VONE

0.12

0.12

#

n/a

Russell 1000 Growth

VONG

0.15

0.15

#

n/a

Russell 2000 Growth

VTWG

0.2

0.2

#

n/a

Global ex-US Real Estate

VNQI

0.35

0.35

#

n/a

*Although the reported expense ratios of these funds have increased, the costs experienced by investors in each fund have not changed. The reported expense ratio for each fund includes "acquired fund fees and expenses," which are expenses incurred indirectly by the fund through its ownership of shares in other investment companies, primarily business development companies. Business development company (BDC) expenses are similar to the expenses paid by any operating company held by the fund. They are not direct costs paid by fund shareholders and are not used to calculate the fund's net asset value. They have no impact on the costs associated with fund operations. Acquired fund fees and expenses are not included in a fund's financial statements, which provide a clearer picture of a fund's actual operating costs. BDC expenses can go up and down considerably from one year to the next. The increase in each of these funds' reported expense ratios is attributable to increases in BDC expenses.

Investments in target-date 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 workforce. The fund will gradually shift its emphasis from more aggressive investments to more conservative ones based on its target date. An investment in a Vanguard 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 managed nearly $1.95 trillion in U.S. mutual fund assets as of September 30, 2012. The firm offers more than 170 index funds, active funds and ETFs to U.S. investors and more than 70 additional funds and ETFs in non-U.S. markets. For more information, visit www.vanguard.com.

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 Vanguard provides its services to the Vanguard mutual funds and ETFs at cost.

 For more information on Vanguard funds, visit www.vanguard.com, or call 800-662-7447 to obtain a prospectus. Visit our website, call 800-662-7447, or contact your broker to obtain a prospectus for Vanguard mutual funds and ETF Shares. Investment objectives, risks, charges, expenses, and other important information 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 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.

 Mutual funds and ETFs are subject to risks, including possible loss of principal.

 Vanguard Marketing Corporation, Distributor.

 U.S. Pat. No. 6,879,964  B2; 7,337,138; 7,720,749; 7,925,573; 8,090,646.