Vanguard Slashes Investment Costs to Save Investors $350 Million
In a historic move, asset manager Vanguard has announced the largest fee reduction in its history. Effective February 1, expense ratios for 87 funds will be lowered by 1-6 basis points, resulting in projected savings of over $350 million for investors in 2025.
The cuts encompass bond mutual funds, ETFs, US and international equity funds, and money market funds. "These reductions will save Vanguard's investors more than $350 million in 2025 alone," the company stated.
"Lower fees allow investors to maximize returns and maintain a competitive edge for our funds," said Greg Davis, Vanguard's chief investment officer. CEO Salim Ramji emphasized the importance of low costs for investors, stating that "savings compound over time."
Davis noted the crucial role of bonds in investment portfolios. As of November 30, 2024, Vanguard managed approximately $10.4 trillion in assets. Along with BlackRock, the company is the world's top provider of ETFs, catering to retail investors seeking affordable investment options.
Vanguard has reduced investment costs over 2,000 times since its inception. As of December 31, 2024, it offered 428 funds globally, with 212 based in the United States.