Vanguard shareholders in 15 funds get fee break

Lower expenses of from one to three basis points in 15 Vanguard mutual funds saved investors $23 million last year, the fund giant said Tuesday. Expenses at seven of the firm's actively managed state municipal bond funds whose fiscal year ended in November were lowered by one basis point on Investor-class shares and three basis points on Admiral-class shares to 0.19% and 0.09%, respectively. These funds were Vanguard's: California Intermediate-Term Tax-Exempt Fund, California Long-Term Tax-Exempt Fund, New Jersey Long-Term Tax-Exempt Fund, New York Long-Term Tax-Exempt Fund, and Pennsylvania Long-Term Tax-Exempt Fund. Expenses were lowered by one basis point to 0.15% on the Ohio Long-Term Tax-Exempt Fund and the Massachusetts Tax-Exempt Fund. Lower expenses also were reported in the actively managed Vanguard Wellington Fund, where Investor-class share fees fell by one basis point to 0.25% and in Admiral shares to 0.16%. The expense ratio of the actively managed Vanguard Convertible Securities Fund declined four basis points to 0.34%. In a release, Vanguard said the lower expenses are the result of an incentive/penalty arrangement in place with its external investment advisory firms. Those firms adjust their base advisory fee up or down to reflect a fund's investment performance relative to its benchmark over a three- or five-year period. Vanguard said it will announce expense changes for funds with fiscal years ending in December and January in the coming months. ​