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Vanguard reports lower expense ratios for 53 mutual fund and ETF shares


Vanguard clients saved a total of USD12.4 million as a result of lower expense ratios for 53 individual mutual fund shares, including 21 exchange-traded fund shares (ETFs).

“Vanguard continues to set the standard as the industry’s low-cost leader, reducing costs not just on a subset of products, but across our funds and ETFs,” says Vanguard CEO Bill McNabb (pictured). “We have a track record of nearly 40 years of lowering the cost of investing for our clients and we have every intention of continuing to lower the cost of investing.” 

Vanguard reported expense ratio reductions for the 12 months ended August 2015 for a range of fund share classes (Investor, Admiral, ETF, Institutional, and Institutional Plus) in five fund categories.

Twenty-four Vanguard bond index fund shares reported lower expense ratios. For example, the USD13.2 billion Vanguard Short-Term Corporate Bond Index Fund reported the following reductions: Admiral Shares, 2 basis points to 0.10 per cent; ETF Shares, 2 basis points to 0.10 per cent; and Institutional Shares, 2 basis points to 0.07 per cent. A basis point is one-hundredth of 1 per cent. 

Twenty equity sector index fund shares also reported lower expense ratios. The largest of these funds, the USD8.7 billion Vanguard Information Technology Index Fund, reported reductions on Admiral and ETF Shares of 2 basis points to 0.10 per cent. 

A total of six size/style index fund shares that seek to track CRSP benchmarks reported lower expense ratios. The largest of these funds, the USD2.2 billion Vanguard Mega Cap Growth Index Fund, reported that the expense ratios of its Institutional and ETF Shares declined by 2 basis points to 0.08 per cent and 0.09 per cent, respectively. 

Two social index fund shares also reported lower expense ratios. The USD2 billion Vanguard FTSE Social Index Fund reported expense ratio reductions on Investor Shares of 2 basis points to 0.25 per cent and Institutional Shares of 1 basis point to 0.15 per cent. 

In addition, one actively managed fund reported a lower expense ratio. The USD307.6 million Vanguard Explorer Value Fund reported an expense ratio of 0.65 per cent, a drop of 1 basis point from the 2014 figure.

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