Vanguard Just Cut Fees, Again 

How about we take a little bit off the top?

Vanguard unveiled its latest round of expense ratio cuts on Monday, estimating that the reductions across 53 passively managed funds will save customers a total of about $250 million this year. It’s becoming something like an annual event, as the company a year ago made a similar round of cuts, to the tune of about $350 million in investor savings among 87 funds. With the newest reductions, the average fund fee at the investor-owned financial giant is just 0.06%, according to the company.

What’s Left to Cut? 

It’s like maintaining a buzz cut, going to the barber and having millimeters shaved off the top. Vanguard built its empire by being a low-cost investment shop, and it has routinely cut fees to keep that status, so much so that competitors appear to be tired of trying to keep up. “They don’t have to do this. They’re still providing very low-cost investments at the end of the day,” said Dan Sotiroff, associate director of US passive strategies at Morningstar. “Last year when they did this, there was almost no response … Nobody else was really willing to play the game.” Most of the cuts apply to institutional share classes and ETFs, suggesting that the company may be giving an incentive for many investors to choose ETFs over its Admiral mutual-fund share class, he noted.

Here’s an overview of the changes:

• The company lowered expense ratios on 84 mutual fund and exchange-traded fund share classes across the 53 products.
• Many of the reductions are 1 or 2 basis points, though they range from as little as half a basis point to as many as 10.
• All of the affected funds are index-based, mostly with prior costs of under 10 basis points.

“I don’t think you’re ever going to get their clients to complain if they’re reducing fees in their investments,” said Craig Kilgallen, relationship manager at Fuse Research Network. “That’s what they built their business on.”

Service and Tech: Somewhat ironically, one of the biggest problems Vanguard has now is its growth, Sotiroff noted. At $35 trillion, the firm represents 28% of assets in US mutual funds and ETFs, and it took in $240 billion in 2025, the second-largest haul in the industry, per Morningstar. While the fee cuts are welcomed, “I suspect many Vanguard investors would happily let Vanguard keep that extra basis point if it meant better technology and service,” Jeff DeMaso, editor of The Independent Vanguard Adviser, wrote in a response to the news.

The company has been hammered for years over client experience issues, but it has been investing heavily in technology to address them, with over 90% of its personal investor business now being on the cloud, rather than server-based, CEO Salim Ramji said last year in an interview with Morningstar. “We’re turning the corner, but this isn’t a destination. This is a constant journey,” he said, adding that last March, Vanguard got a top ranking from JD Power for its DIY investor client experience. “[O]ur tech stack is now modernized in a way that just wouldn’t have been possible two years ago or three years ago.”