Vanguard announced it has lowered expense ratios across 53 funds, totaling nearly $250 million in fee reductions for 2026. The cost reductions affect 84 mutual fund and ETF share classes, resulting in an average fee cut of 27% for the funds involved.
Vanguard has long focused on reducing fees for its fund line-up, including cutting $350 million in expense ratio reductions in 2025 in a move that affected 43% of its U.S.-based mutual fund and ETF share classes. The firm claims the last two rounds of fee reductions totaled almost $600 million—its largest ever two-year cost cut.
“Vanguard is investor-owned—we have no outside stockholders or private owners profiting from our clients. These fee reductions—set to deliver more than half a billion dollars in savings across 2025 and 2026—are a clear expression of our purpose and commitment to our clients as owners,” Vanguard CEO Salim Ramji 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.”
A research paper published last year by Morningstar found that over the last decade, the cheapest stock and bond funds in their categories delivered average returns of 10.3%, which were over 2 percentage points higher than those of the most expensive funds. Nevertheless, as a group, asset managers slowed their fee-cutting campaigns in recent years, with the average fund fee declining just two basis points in 2024. Vanguard, however, maintained the edge on fees, with an average fee of 0.007% compared with the equal-weighted average fund fee of 0.34% in 2024. That was before last year’s fee reductions were accounted for.
The current reductions will impact Vanguard’s equity 9-box funds, including its flagship Growth ETF (VUG) and Value ETF (VTV), its FTSE Emerging Market ETF (VWO), its Dividend Appreciation ETF (VIG) and its High Dividend Yield ETF (VYM), among others.
Vanguard’s investment products now carry an average expense ratio of 0.06%. Over three-fourths of Vanguard ETFs (85%) are priced in the lowest decile for their category.