Vanguard rolls out funds with 0.01% expense ratio

Vanguard rolls out funds with 0.01% expense ratio
The minimum investment is $5 billion for the stock fund, and $3 billion for the bond fund.
MAR 17, 2016
Vanguard just squeezed its fees a little tighter — a move that could prompt further fee reductions by other fund companies. The biggest eye-opener: A new share class of Vanguard Total Stock Market Index and Total Bond Market Index with operating expenses of 0.01%. But the minimum investment is $5 billion for the stock fund and $3 billion for the bond fund. “Essentially, Vanguard wants to run institutional money for free,” said Dan Wiener, editor of The Independent Adviser for Vanguard Funds. “Pension funds will love this.” Vanguard also lowered expenses on all of its target-date funds by 0.02 percentage points, and its Target Retirement 2035 fund by 0.03 percentage points. The $41.2 billion Vanguard Wellesley Income Fund's expense ratio dropped 0.02 percentage points to 0.23%, and its Admiral Shares fell 0.02 percentage points to 0.16%. All told, Vanguard dropped expenses on 35 individual mutual fund shares. “We strongly believe in setting our investors up for success, and one of the best ways to do that is to keep the cost of investing low, enabling them to keep more of what they earn,” said Vanguard CEO Bill McNabb. “The compounding effect of high costs is especially corrosive to the returns of retirement investors — those saving over 30 to 40 years in a 401(k) plan or through an IRA. As a result, low costs, along with high savings rates, are critical to the retirement readiness of millions of Americans.”

Latest News

SEC bars ex-broker who sold clients phony private equity fund
SEC bars ex-broker who sold clients phony private equity fund

Rajesh Markan earlier this year pleaded guilty to one count of criminal fraud related to his sale of fake investments to 10 clients totaling $2.9 million.

The key to attracting and retaining the next generation of advisors? Client-focused training
The key to attracting and retaining the next generation of advisors? Client-focused training

From building trust to steering through emotions and responding to client challenges, new advisors need human skills to shape the future of the advice industry.

Chuck Roberts, ex-star at Stifel, barred from the securities industry
Chuck Roberts, ex-star at Stifel, barred from the securities industry

"The outcome is correct, but it's disappointing that FINRA had ample opportunity to investigate the merits of clients' allegations in these claims, including the testimony in the three investor arbitrations with hearings," Jeff Erez, a plaintiff's attorney representing a large portion of the Stifel clients, said.

SEC to weigh ‘innovation exception’ tied to crypto, Atkins says
SEC to weigh ‘innovation exception’ tied to crypto, Atkins says

Chair also praised the passage of stablecoin legislation this week.

Brooklyn-based Maridea snaps up former LPL affiliate to expand in the Midwest
Brooklyn-based Maridea snaps up former LPL affiliate to expand in the Midwest

Maridea Wealth Management's deal in Chicago, Illinois is its first after securing a strategic investment in April.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.