02.04.2025

Vanguard Announces Largest Fee Cuts in its History

02.04.2025
Vanguard Announces Largest Fee Cuts in its History

Once again, Vanguard is lowering the cost of investing. Effective February 1, 2025, the firm reduced fees on 168 share classes across 87 funds. The fee reductions are expected to save investors more than $350 million this year alone.1

Why investment costs matter

Vanguard Founder John C. Bogle explained why investment costs matter this way:

In investing, realize that you get what you don’t pay for. Whatever future returns the markets are generous enough to deliver, few investors will succeed in capturing 100% of those returns, simply because of the high costs of investing—all those commissions, management fees, investment expenses, yes, even taxes—so pare them to the bone.2

May 1 will mark Vanguard’s 50th anniversary. All along, we have emphasized the importance of limiting the cost of investing. Lower costs leave more money in investors’ funds and raise their potential returns. Indeed, across the industry, lower-cost funds have historically outperformed higher-cost funds on a net-of-expenses basis.3

Lower-cost portfolios tend to outperform higher-cost ones

At Vanguard, we believe our funds’ impressive long-term performance owes much to their low costs. For the 10 years ended December 31, 2024, 84% of our funds outpaced the average results of competing funds. The performance of our actively managed fixed income funds has been especially strong: 91% of our active bond funds and 100% of our money market funds have outpaced their peers’ average results.4

Source: Vanguard

Related articles

  1. They will roll out a comprehensive, end-to-end order & processing solution for retail & institutional funds.

  2. The client base has increased by nearly 17% from year-end 2023 to the end of the first quarter of 2025.

  3. This is Galaxy's first underwritten public offering of its common stock as a listed company on Nasdaq.

  4. finaXai will explore integrating machine learning and large language models into asset servicing workflows.

  5. Shanghai Stock Exchange will expand products under the China-Brazil ETF connectivity scheme.