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AUTHOR: Jonathan Clements on 2/03/2025

Throughout my career, I’ve always worried about coming across as too much of a cheerleader for Vanguard Group. Still, it’s hard to argue that this morning’s press release is anything but good news: Vanguard announced fee reductions affecting 168 share classes across 87 funds. I imagine most HumbleDollar readers stand to benefit.

A few examples:

  • Vanguard Total Bond Market Index Fund-Admiral Shares drops from 0.05% to 0.04%
  • Vanguard Treasury Money Market Fund-Investor Shares falls from 0.09% to 0.07%
  • Vanguard International High Dividend Yield Index Fund-Admiral Shares drops from 0.22% to 0.17%
  • Vanguard Total International Stock ETF declines from 0.08% to 0.05%
  • Vanguard Total World Stock ETF dips from 0.07% to 0.06%
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Scott Dichter
5 days ago

I like the fee reductions but I wish they’d hire someone to do a complete revamp of their online tech, figure out if they really want to be a brokerage or are they just a mutual fund family with ETFs?

Kevin Lynch
6 days ago

Good news for sure.

Although my primary holding, VTI didn’t get an ER reduction, it is already at .03.

VXUS, my other holding, got a .03 reduction from .08 to .05. I will take it and say, Thank You Vanguard!

My money market fund, VXFXX didn’t get an ER reduction either, remaining at .11, and although VUSXX has a lower ER at .07, VMFXX out performed it’s lesser ER fund

Kevin Lynch
6 days ago

These days my Vanguard Holdings are concentrated in two ETFs…VTI and VXUS. VTI was not one of the funds effected, but it already has a ER or .03

I appreciate the .03 ER reduction on my XVUS however. Thank you Vanguard.

My Money Market Fund VMFXX was unchanged. It has a higher ER than VUSXX but still outperformed it.

The good news just keeps a coming!

John Enright
6 days ago

I’m a big Vanguard fan and am happy about this announcement. However, I have a question on it. Since Vanguard returns profits to its funds, does this really have the full $350 million of annual impact as noted by Vanguard of dollars flowing to fund-holders? It would seem to reduce income going to Vanguard upfront to spend on salaries and technology (!) for example, but weren’t some of these dollars coming back to us anyway?

stelea99
6 days ago

I would never argue that higher expenses for index ETFs are better than lower expenses. And, any lowering of expenses for investors is wonderful. That being said, a .01% reduction in an expense ratio is de minimis. On a million, it is $500. For someone investing $1000, it is fifty cents. Vanguard already had better expense ratios in comparison to most other fund families but it is only when compared to active management that the difference is really motivating.

The real importance of this kind of move is that it continues the pressure on other fund families to reduce expenses, and it provided Vanguard an opportunity to demonstrate their commitment to the idea.

David Lancaster
5 days ago
Reply to  stelea99

That being said, a .01% reduction in an expense ratio is de minimis.

I’m not very good at math, but I believe 0.01% of 10 trillion dollars (although fees were not reduced on all AUM) is still a lot of money.

David Powell
6 days ago
Reply to  stelea99

In investing little savings or gains compound. I’m happy to accept a free $500/year for the next 30-40 years, which amounts to $15-20k without investment gains.

Our portfolio has an international tilt so this change actually represents an even bigger savings. It means I might be able to somewhat shrink our Roth tax reserve for conversions we’re planning to start soon.

David Powell
6 days ago

The lower costs, particularly on ex-U.S. funds, are very nice!

I also appreciate the investments Vanguard has made over the past two years to build out the mobile app and to improve the web site. There’s still more work needed on both, which continues, but I’ve never been unable to complete a change or transaction in a timely way. I love that they support FIDO security keys. I wish Fidelity did the same.

jerry pinkard
6 days ago

I would rather Vanguard have used that money to improve their website and fix their awful customer service. I was a Vanguard customer for 30 years and was able to do most transactions online. I was forced to use their customer service on a transaction 2 years ago and they messed it up, which cost me money. A few months later I had to use their customer service and it was another mess. I became convinced Vanguard really did not care about their customer service.

I switched to Fidelity and could not be happier. I still have my Vanguard etf’s but I get great customer service, and their staff are very competent and are US based, thus no language barrier like I encountered at Vanguard with their Philippines” staff. They also work weekends.

mytimetotravel
7 days ago

Thanks, Jonathan. Good news is always welcome.

David Lancaster
7 days ago

And once again the continued Vanguard advantage continues

Rick Connor
7 days ago

Thanks Jonathan. That’s a big drop on the International Stock ETF.

Andrew Forsythe
7 days ago

Jonathan, thanks for the heads up. I own several of these funds/ETFs and this is good news indeed.

There’s much to love about Vanguard: their history, their philosophy, their wide range of funds and ETFs, and now more than ever, their rock bottom fees. I wish I could include their customer service in this list, but I guess you can’t have everything….

1PF
7 days ago

I’m not sure why the prevailing opinion of Vanguard’s customer service is low. The one time I needed to contact Vanguard on the phone, to transfer my investments from TIAA to Vanguard upon retirement, the rep helped seamlessly. For everything else, I’ve been able to do all transactions via the Vanguard website with no trouble. So for me, it’s been fine. Maybe lucky?

mytimetotravel
7 days ago
Reply to  1PF

I, too, have always had good service on the rare occasions I have needed to call. Now I have figured out how to do QCDs and RMDs on the website, I’m not sure what future service I might need.

Larry Hoel
5 days ago
Reply to  mytimetotravel

I have always appreciated and still do Vanguard and it’s app and have never had a customer service problem

Andrew Forsythe
7 days ago
Reply to  1PF

I’m glad Vanguard’s customer service has worked for you. I’ve had fairly regular problems with it for the last several years and it seems to be getting a bit worse. Often, but not always, it’s some technical problem and they promise to refer it to the IT team, but it usually remains unaddressed.

My other brokerage account is with Schwab. As I said, there’s a lot to love about Vanguard, but its customer service, in my experience at least, pales in comparison to Schwab’s.

When I call Schwab I get a competent and courteous rep on the phone in short order, and they always want to actually solve the problem rather than referring it out or directing me elsewhere. And if they can’t solve it right then they’ll promise to do so and then follow up with me.

I hadn’t intended to hijack this thread, which is about Vanguard’s lowering their already low fees, so apologies for that. And I’ll add that it’s probably Vanguard’s leadership role when it comes to low fees that has kept the pressure on Schwab and all the other brokers to lower theirs as well.

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