Vanguard's commitment: Lowering the cost and complexity of investing

May 28, 2019

 

Investors in Vanguard Dividend Appreciation ETF (VIG) are now paying less. The expense ratio has dropped from 8 basis points (bps) to 6 bps.

This expense ratio reduction is the latest in a number of expense ratio reductions for ETF Shares announced by Vanguard in recent months.

The expense ratios for 19 Vanguard ETFs® are now lower than the expense ratios for their respective funds' Admiral™ Shares. Below is the full list of ETFs with new lower expense ratios.

Ticker Vanguard ETF® New expense ratio
VEU FTSE All-World ex-US 0.09%
VGK FTSE Europe 0.09%
VPL  FTSE Pacific 0.09%
VTEB Tax-Exempt Bond 0.08%
VWO FTSE Emerging Markets 0.12%
VXUS Total International Stock 0.09%
VSS FTSE All-World ex-US Small-Cap 0.12%
VYM High Dividend Yield 0.06%
VT Total World Stock 0.09%
VEA FTSE Developed Markets 0.05%
VUG Growth 0.04%
VV Large-Cap 0.04%
VO Mid-Cap 0.04%
VOO S&P 500 0.03%
BND Total Bond Market 0.035%
VTI Total Stock Market 0.03%
VTV Value 0.04%
BNDX Total International Bond 0.09%
VIG Dividend Appreciation 0.06%

Until recently, the expense ratios of our ETF Shares and Admiral Shares were typically the same for their respective funds; however, the growing size and scale of Vanguard ETFs have helped fuel operational efficiencies that have allowed us to lower the cost to serve our ETF shareholders even more.

Adjustments to our expense ratios are often tied to changes in the cost of managing the funds. For example, economies of scale resulting from an increase in a fund’s total assets because of market appreciation or cash inflows can help reduce the fund’s expense ratio, while a decline in assets may cause a rise in the expense ratio.

These expense ratio reductions are part of our continuing commitment to increase value for investors by lowering the cost and complexity of investing. This action will result in approximately $70 million in savings for shareholders.* Vanguard has reduced expense ratios to save investors more than $625 million over the past three years.**

* The estimated savings for the identified funds is the difference between prior and current expense ratios multiplied by eligible average assets under management (AUM). Eligible average AUM is based on the daily average assets over the 12 months from November 2017 to October 2018.

** Based on expense ratio reductions reported on more than 500 mutual fund and ETF shares, based on total assets. The cumulative figure is for all share classes from the 2015–16 fiscal year through the 2017–18 fiscal year for the Vanguard's 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.

Notes:

  • For more information about Vanguard funds or Vanguard ETFs, visit advisors.vanguard.com to obtain a prospectus or, if available, a summary prospectus. 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 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.
  • All investing is subject to risk, including possible loss of principal.

 

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