Vanguard Lowers Expense Ratios Across 53 ETFs and Mutual Funds

Core Insights - Vanguard has announced a reduction in expense ratios across 53 funds, amounting to nearly $250 million in fee reductions for 2026, affecting 84 mutual fund and ETF share classes with an average fee cut of 27% [1] - The firm previously cut $350 million in expense ratios in 2025, impacting 43% of its U.S.-based mutual fund and ETF share classes, bringing the total fee reductions over the last two years to nearly $600 million, marking its largest two-year cost cut [2] - Vanguard's CEO emphasized that these fee reductions reflect the company's commitment to its investor-owners, stating that keeping more earnings benefits clients in the long term [3] Fee Reduction Details - The current fee reductions will impact several of Vanguard's equity 9-box funds, including flagship products like the Growth ETF (VUG) and Value ETF (VTV), among others [4] - Vanguard's investment products now have an average expense ratio of 0.06%, with 85% of its ETFs priced in the lowest decile for their respective categories [4] Market Context - A research paper by Morningstar indicated that over the past decade, the cheapest stock and bond funds delivered average returns of 10.3%, outperforming more expensive funds by over 2 percentage points [3] - Despite a general slowdown in fee-cutting among asset managers, Vanguard maintained a competitive edge with an average fee of 0.007% compared to the equal-weighted average fund fee of 0.34% in 2024 [3]