Vanguard Slashes Fees Again: Investors to Save Nearly $250 Million in 2026
Original reporting by WealthManagement. Subscribe to their free daily newsletters for more insights.
In a significant move for cost-conscious investors, Vanguard announced a new round of expense ratio reductions across 53 of its mutual funds and ETFs. The cuts, effective for the 2026 fiscal year, are projected to save investors close to $250 million and represent an average fee reduction of 27% for the affected share classes.
This latest action continues Vanguard's aggressive fee-cutting strategy. Just last year, the firm trimmed $350 million in costs, impacting 43% of its U.S. fund lineup. Combined, the two rounds of reductions over 2025 and 2026 total nearly $600 million in savings—the largest such two-year initiative in the company's history.
"Our structure is our advantage," said Vanguard CEO Salim Ramji in a statement. "Being investor-owned means every dollar saved is a dollar that compounds for our clients, not outside shareholders. Returning more than half a billion dollars over two years directly supports their long-term financial goals."
The decision underscores a persistent trend in the fund industry: lower costs are strongly correlated with better net returns for investors. A 2023 Morningstar study highlighted that the cheapest funds in their categories outperformed the most expensive by over 2 percentage points annually over the past decade. While the broader asset management industry has slowed its pace of fee reductions recently, Vanguard has pressed its advantage. Even before these latest cuts, its average fund fee stood at a razor-thin 0.007%, compared to an industry average of 0.34%.
Among the funds seeing lower costs are several core equity offerings, including the flagship Growth ETF (VUG) and Value ETF (VTV), the FTSE Emerging Markets ETF (VWO), and popular dividend strategies like the Dividend Appreciation ETF (VIG) and High Dividend Yield ETF (VYM).
Following these reductions, Vanguard's investment products now carry an average expense ratio of just 0.06%. Notably, 85% of its ETFs are priced in the lowest-cost decile of their respective categories, reinforcing its position as a low-cost leader.
Investor Reactions
Michael Chen, Retirement Planner: "This is textbook Vanguard. They're using their scale to relentlessly drive down costs, which is a massive win for the everyday investor building a portfolio. It puts enormous pressure on competitors."
Sarah Johnson, Long-term Vanguard Client: "As someone who's been with them for 20 years, I see these consistent cuts as a dividend paid in trust. It validates why I chose a client-owned structure. That's real money staying in my account."
David Reeves, Financial Analyst & Critic: "Let's not throw a parade just yet. This is a defensive move in a brutal price war. They're protecting market share, not acting out of pure benevolence. Also, where's the innovation? Cutting fees on old index funds is easy; creating real value is harder."
Priya Mehta, Millennial Investor: "For my generation, fees are the first thing we look at. This news makes Vanguard's core funds almost impossible to ignore for a starter portfolio. It's a powerful signal in a noisy market."