Vanguard Slashes Dozens of Fund Fees

by Kyle Woodley | April 27, 2012 11:46 am

While performance obviously is the most important attribute an investor wants in any fund, never count out the importance of the expense ratio[1] — the fees a firm charges for managing the fund. Just like buying a car, a house — you name it — if you can get what you want for less, you win.

To that end, investment management company Vanguard — looking to reinforce its reputation as the low-cost standard for mutual funds and ETFs — announced a slew of expense ratio cuts across its family of funds.

In total, 38 funds had their expense ratios dropped, though most of the cuts were just by one or two basis points, with larger cuts coming to Vanguard’s Admiral (read: require a five-figure minimum investment). Still, there’s a few notable movements.

For instance, two of Vanguard’s S&P 500 index funds — the Vanguard 500 Index Fund Admiral Shares (MUTF:VFIAX[2]) and the Vanguard S&P 500 ETF (NYSE:VOO[3]) — each dropped a basis point to a bargain-basement 0.05% expense ratio. Meanwhile, prices for the Vanguard Total Stock Market Index Fund Admiral Shares (MUTF:VTSAX[4]) and the Vanguard Total Stock Market ETF (NYSE:VTI[5]) fell a basis point to 0.06%.

The Vanguard Tax-Managed Small-Cap Fund Admiral Shares (MUTF:VTMSX[6]) saw its expense ratio cut by five basis points to 0.13%, but the largest discount comes on the Vanguard Tax-Managed International Fund Admiral Shares (MUTF:VTMGX[7]), which saw its expenses fall by a third to 0.12%.

Some Investor-class funds also dipped, such as for the Vanguard Growth Index Fund (MUTF:VIGRX[8]) and Vanguard Large-Cap Index Fund (MUTF:VLACX[9]).

The full list of Vanguard expense ratio cuts can be found here.[10]

Vanguard, BlackRock (NYSE:BLK[11]) and State Street (NYSE:STT[12]) already have announced several expense discounts[13] this year, including on popular products like the Vanguard MSCI Emerging Markets (NYSE:VWO[14]) ETF.

Kyle Woodley[15] is the assistant editor of InvestorPlace.com[16]. As of this writing, he did not hold a position in any of the aforementioned securities. Follow him on Twitter at @KyleWoodley[17].

Endnotes:
  1. importance of the expense ratio: http://investorplace.com/2012/03/investing-101-expense-ratios-mutual-funds-etfs/
  2. VFIAX: http://studio-5.financialcontent.com/investplace/quote?Symbol=VFIAX
  3. VOO: http://studio-5.financialcontent.com/investplace/quote?Symbol=VOO
  4. VTSAX: http://studio-5.financialcontent.com/investplace/quote?Symbol=VTSAX
  5. VTI: http://studio-5.financialcontent.com/investplace/quote?Symbol=VTI
  6. VTMSX: http://studio-5.financialcontent.com/investplace/quote?Symbol=VTMSX
  7. VTMGX: http://studio-5.financialcontent.com/investplace/quote?Symbol=VTMGX
  8. VIGRX: http://studio-5.financialcontent.com/investplace/quote?Symbol=VIGRX
  9. VLACX: http://studio-5.financialcontent.com/investplace/quote?Symbol=VLACX
  10. The full list of Vanguard expense ratio cuts can be found here.: https://personal.vanguard.com/us/insights/article/expense-ratio-changes-042012?z_rl=T9057
  11. BLK: http://studio-5.financialcontent.com/investplace/quote?Symbol=BLK
  12. STT: http://studio-5.financialcontent.com/investplace/quote?Symbol=STT
  13. announced several expense discounts: http://investorplace.com/2012/03/etf-prices-how-low-can-they-go/
  14. VWO: http://studio-5.financialcontent.com/investplace/quote?Symbol=VWO
  15. Kyle Woodley: http://investorplace.com/author/kyle-woodley/
  16. InvestorPlace.com: http://investorplace.com/
  17. @KyleWoodley: https://twitter.com/#%21/kylewoodley

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