Core Insights - Vanguard plans to reduce expense ratios on 84 mutual fund and exchange-traded share classes across 53 funds, estimating approximately $250 million in fee reductions for investors by 2026 [1] - Over the past two years, Vanguard has implemented significant fee decreases, resulting in nearly $600 million in cumulative savings for investors, marking the largest cost reduction in the firm's history [1] Expense Ratios and Performance - Following the fee reductions, the average expense ratio for Vanguard's product range across all asset categories and investment styles is now at 0.06% [2] - A significant proportion of Vanguard's funds have outperformed their peer group averages over the past decade, with 84% of mutual funds and 88% of active fixed income funds meeting this performance criterion [2] Affected Products - The fee reductions will impact various products, including US equity 9-box funds such as the Growth ETF (VUG) and Value ETF (VTV), as well as large-, mid-, and small-cap growth, value, and blend funds [3] - Other affected products include the FTSE Emerging Markets ETF (VWO) and dividend-oriented ETFs like the Dividend Appreciation ETF (VIG) and High Dividend Yield ETF (VYM) [3] Company Commitment and Expansion Plans - Vanguard's CEO Salim Ramji emphasized that the fee reductions reflect the company's commitment to its investor-owners, aiming to deliver over half a billion dollars in savings across 2025 and 2026 [4] - The company is also planning to expand its Miami team from five to 15 over the next five years and is considering expanding offshore services in US locations such as California and Houston [5]

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]