Vanguard simply introduced a brand new spherical of expense ratio drops spanning 53 funds (roughly 25% of them), totaling near $250 million in charge reductions in 2026. See their press launch and full checklist of modifications. This comes virtually precisely a 12 months after their February 2025 cuts which spanned 87 funds with an estimated $350 in charge reductions that 12 months.
Over the previous two years, Vanguard has decreased charges on most of its fund lineup totaling practically $600 million in financial savings for buyers—Vanguard’s largest-ever two-year mixed value discount. Vanguard’s product lineup throughout all asset courses and types now has a median expense ratio of 0.06%, reinforcing the agency’s longstanding value management place. These persistently low prices assist buyers preserve extra of their returns, contributing to stronger long-term efficiency.
Extra media protection on the Wall Avenue Journal (present article) and Morningstar.
At this level, most of their expense ratios are so low on their large funds that the majority particular person buyers gained’t discover a lot of a distinction. The most important index funds VTI, VXUS, BND are unchanged. Goal Retirement funds are additionally unchanged. Nevertheless, I do imagine it is a vital indicator that Vanguard remains to be reducing prices as their property below administration proceed to develop.
As a person investor, it’s additionally essential to keep in mind that prices matter and people prices instantly have an effect on efficiency. Jack Bogle was proper in his previous skepticism of ETFs in that over time, the group has grown to incorporate quite a lot of complicated, costly choices. Whereas the general, asset-weighted common expense ratio for ETFs has declined over time, the typical charge of newly launched ETFs has really elevated. Be cautious of all these new, fancy ETFs that make engaging guarantees like restricted draw back and very excessive dividend revenue. This “Boomer sweet” virtually all the time comes with a better expense ratio, and I’m keen to wager it’s going to additionally find yourself with decrease long-term returns. New tips, standard story.
Personally, I observe that the Vanguard 0–3 Month Treasury Invoice ETF (VBIL) lowered its expense ratio from 0.07% to 0.06%. My present go-to is iShares 0-3 Month Treasury Bond ETF (SGOV), which is at 0.09%.
The 30-day median bid/ask unfold on VBIL is now 0.01% of market value, which means its liquidity is now mainly on the identical stage as SGOV (additionally at 0.01%). I’ll most likely begin utilizing VBIL as a substitute of SGOV for the occasions once I desire a short-term money equal in a brokerage account. 0.03% is a small distinction, however I gotta preserve incentivizing these decrease prices. Lengthy stay the Vanguard Impact!