Vanguard Cuts Fees Again, Lowers Average Expense Ratio to 0.06%
Vanguard today announced significant and wide-ranging cost reductions across its investment lineup which the company says will amount to nearly $250 million in fee reductions in 2026.
As of Feb. 1, Vanguard lowered expense ratios for 84 mutual fund and exchange-traded share classes across 53 funds. The fee cuts average 27% across impacted funds, and mean Vanguard’s product lineup across all asset classes and styles now has an average expense ratio of 0.06%.
Over the past two years, Vanguard has reduced fees on most of its fund lineup totaling nearly$600 million in savings for investors—the firm’s largest-ever two-year combined cost reduction. More than 60% of Vanguard’s funds have had an expense ratio reduction in 2025 or 2026.
“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,” said Vanguard CEO Salim Ramji. “When investors keep more of what they earn, the benefits compound over the long term, helping our clients achieve their most important financial goals.”
Vanguard’s wide-ranging cost reductions include the firm’s suite of U.S. equity 9-box funds, including the flagship Growth ETF (VUG) and Value ETF (VTV) along with its other large-, mid-, and small-cap growth, value, and blend funds. Vanguard has also lowered fees on the FTSE Emerging Markets ETF (VWO), and Vanguard’s dividend-focused U.S. equity ETFs, Dividend Appreciation ETF (VIG) and High Dividend Yield ETF (VYM).
A full list of expense ratio reductions can be found here. The expense ratio reductions are effective immediately.
“Vanguard helped pioneer the modern index fund, and the principles behind that innovation remain core to our approach today: broad diversification, transparency, and disciplined, long-term investing,” said Greg Davis, Vanguard President and Chief Investment Officer. “Indexing was once considered unconventional—now it’s an indispensable tool for millions of investors. We’re proud to have played a role in demonstrating how simple, low-cost active and index strategies can drive durable outcomes for investors.”
A press release today announcing the fee reductions noted that 84% of Vanguard funds have outperformed their peer group averages over the past decade, including 88% of its active fixed income funds.
The company added that this latest expense ratio reduction enables clients to retain an even greater share of their returns, and those savings will continue to compound over time.
Vanguard is well known for innovating low-cost investing—especially through index funds and ETFs with very low expense ratios—and for its client-owned structure, which it says helps keep fees among the lowest in the industry.
The company in February 2025 announced that it was lowering expense ratios across more than 40% of its funds across share classes—meaning reductions to 168 mutual fund and exchange-traded share classes across 87 funds. Those reductions—averaging 20%—were projected to save Vanguard’s investors more than $350 million in 2025, with the fee cuts marking the largest annual expense ratio reduction in Vanguard’s 50-year history.
Established in 1975 by John C. Bogle, Valley Forge, Pa.-based-based Vanguard introduced the pioneering investor-owned structure and launched the first index mutual fund a year later.
SEE ALSO:
• Vanguard Launches Fixed Income Offering
• Vanguard, TIAA Team Up to Launch Target-Date CIT with Built-In Annuity
• Vanguard Marks 50th Anniversary by Celebrating Milestone Achievements
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.