In what’s turning into a yearly tradition under CEO Salim Ramji, Vanguard revealed that the firm will be saving investors hundreds of millions of dollars in 2026 by slashing the cost of its funds.
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Effective Feb. 1, Vanguard cut the expense ratio for 84 mutual fund and ETF share classes in 53 different index products that include U.S. and international stock and bond vehicles, large- mid- and small-cap growth investments and blended strategies. All told, the estimated savings for investors in ETFs, investor, institutional or “Admiral” share classes, available to those investing at least $3,000, come to nearly $250 million — adding to the gains of $350 million worth of cheaper funds from Vanguard’s cost cuts at this time last year.
After those two cuts to 60% of Vanguard’s products, the asset-weighted expense ratio across every asset class and management style ticked down to 0.06% from 0.07% in September.
“These fee reductions — more than half a billion dollars over the past two years — are a clear expression of our purpose and commitment to our clients as owners,” Ramji, who took over as CEO in 2024, said in a statement. “When investors keep more of what they earn, the benefits compound over the long term, helping our clients achieve their most important financial goals.”
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The biggest losers (and therefore biggest winners)
As much as falling prices do produce those multiplying savings over years and decades, Vanguard’s tweaks to its fleet of 458 funds with over $12 trillion as one of the four dominant companies in asset management alongside Ramji’s former firm BlackRock, State Street and Fidelity Investments also displays the sheer force of its scale in a commodified industry. Average expense ratios have fallen by more than a half a percentage point across stock and bond mutual funds and ETFs since 2000. The Valley Forge Pennsylvania-based firm launched by investing legend John Bogle in 1975 has been leading that trend for its entire history.
Vanguard’s latest cuts this year ranged from 0.01% to 0.1%. The 10 funds that received the largest cuts to their expense ratios were:
International High Dividend Yield ETF (Ticker: VYMI; share class: ETF; asset type: stocks): New expense ratio down to 0.07% from 0.17% for a reduction of 0.1%Total Stock Market Index Fund (Ticker: VTSMX; share class: investor; asset type: stocks): New expense ratio down to 0.06% from 0.14% for a reduction of 0.08%Emerging Markets Government Bond Index Fund (Ticker: VGIVX; share class: institutional; asset type: bonds ; *Product comes with a purchase fee of 0.75%): New expense ratio down to 0.08% from 0.13% for a reduction of 0.05% FTSE Social Index Fund (Ticker: VFTNX; share class: institutional; asset type: stocks): New expense ratio down to 0.03% from 0.07% for a reduction of 0.04%LifeStrategy Growth Fund (Ticker: VASGX; share class: investor; asset type: balanced/diversified): New expense ratio down to 0.1% from 0.14% for a reduction of 0.04%Russell 2000 Growth ETF (Ticker: VTWG; share class: ETF; asset type: stocks): New expense ratio down to 0.06% from 0.1% for a reduction of 0.04%Russell 2000 Value ETF (Ticker: VTWV; share class: ETF; asset type: stocks): New expense ratio down to 0.06% from 0.1% for a reduction of 0.04%Tax-Managed Balanced Fund (Ticker: VTMFX; share class: admiral; asset type: balanced/diversified): New expense ratio down to 0.05% from 0.09% for a reduction of 0.04%Tax-Managed Capital Appreciation Fund (Ticker: VTCLX; share class: admiral; asset type: stocks): New expense ratio down to 0.05% from 0.09% for a reduction of 0.04%Tax-Managed Small-Cap Fund (Ticker: VTMSX; share class: admiral; asset type: stocks): New expense ratio down to 0.05% from 0.09% for a reduction of 0.04%
