Vanguard Cuts Fees on Nearly 90 Funds and ETFs

Vanguard has announced the broadest round of fee cuts in its 50-year history. It reduced the expense ratios on a total of 168 share classes across 87 funds by 0.01% to 0.06%, as of today, Feb. 3, 2025. This collection of funds represented about one fourth of the $9.2 trillion in Vanguard’s US mutual funds, exchange-traded funds, and money market funds at the end of 2024.

Although the median fee reduction was about 0.01%, the cuts are still an investor-friendly move. All else equal, lower fees directly improve total returns. Vanguard has historically cut the expense ratios on its mutual funds and ETFs as they grow larger. Fee reductions are a way that it passes along the additional revenue generated from the growth of its funds to its clients. Vanguard said the cuts will save its investors more than $350 million in 2025.

Vanguard has grown enormously over the past three years. The money in its mutual funds and ETFs had swelled to more than $9.2 trillion at the end of 2024 from about $7.8 trillion in December 2021. A little more than one third of that increase came from net new inflows.

The fee reductions are timely. Some clients criticized Vanguard’s decision to raise certain brokerage fees last year. And last month, it settled with the SEC for not disclosing risks related to high capital gains distributions from its target retirement funds. Furthermore, Vanguard appointed Salim Ramji as its new CEO last May, who came from its largest competitor: BlackRock. In doing so, Vanguard deviated from its own practice of promoting from within to fill the CEO position.

Vanguard hasn’t pleased everyone as it has grown, and it has been a long time since it was the industry’s crusading upstart. This round of fee reductions, however, shows it remains committed to low-cost investing and sharing the benefits of its growth with investors.

Vanguard's Fee Cuts