Value of ownership
Vanguard delivers landmark cost savings
February 02, 2026
Vanguard begins 2026 with a major milestone: Since February 1, 2025, our expense ratio reductions are on track to deliver more than half a billion dollars to investors—the largest period of cost savings in our history. In 2026 alone, Vanguard expects to deliver nearly $250 million1 in savings, once again setting the standard for low-cost, high-performing funds for investors. Building on this momentum, our 0.06% asset-weighted average expense ratio2 ranks among the lowest in the industry, underscoring Vanguard’s longstanding cost leadership across asset classes and investment styles.
Over the past 50 years, Vanguard has consistently lowered costs for investors, and that focus supports better long-term outcomes for the people we serve. It reflects Vanguard’s investor-owned structure—unique among our direct competitors—where the funds own Vanguard and investors own the funds. Vanguard is focused on delivering value to those who trust us with their savings, rather than to outside shareholders. The latest reductions continue this decades-long tradition.
A historic achievement
The reductions over the last year reflect a disciplined approach to scale and efficiency. These actions represent one of the most meaningful periods of value delivered in our history. Every basis point matters, and the ongoing commitment to lowering costs reinforces our long-held belief that investors deserve to keep more of what they earn.
“Vanguard is investor-owned3—we have no outside stockholders or private owners profiting from our clients. These fee reductions—set to deliver more than half a billion dollars in savings across 2025 and 2026—are a clear expression of our purpose and commitment to our clients as owners,” said Salim Ramji, Vanguard’s Chief Executive Officer. “When investors keep more of what they earn, the benefits compound over the long term, helping our clients achieve their most important financial goals.”
Source: Morningstar Direct, US-domiciled mutual funds and ETFs (excluding fund of funds) as of December 2025.
Reductions that reach across markets
The 2026 updates apply to 84 mutual fund and ETF share classes across 53 funds, spanning equity, fixed income, and multi-asset solutions. The cost reductions are strategically implemented where they can have the greatest long‑term impact.
Fixed income cost advantage
Cost efficiency is especially important in fixed income, where even small differences can influence outcomes over time. With the 2026 reductions, our fixed income lineup reflects that strength: 89% of Vanguard fixed income ETFs now rank in the lowest-cost deciles of their peer groups and 100% of active fixed income ETFs are still priced in the lowest-cost decile4, demonstrating exceptional cost leadership across the category.
Equity cost improvements
The latest updates reach across our U.S. and international equity strategies, covering large-, mid-, and small-cap funds. Lower costs across core strategies like Vanguard Growth, Vanguard Value, FTSE Emerging Markets, Vanguard Dividend Appreciation, and Vanguard High Dividend Yield enhance the value we deliver to investors. With the 2026 reductions, our equity lineup reflects that strength and its impact with 83% of Vanguard equity ETFs now ranking in the lowest-cost deciles of their peer groups5.
Why lower costs matter
Lower expenses help investors keep a greater share of their returns, and the benefits of lower costs can compound year after year. This improves long-term outcomes for investors across different market environments, investment goals, and time horizons. Whether someone is saving for retirement, managing a pension plan, building global diversification, or seeking reliable income, lower costs help investors keep more of their money working for their future.
A legacy of industry leadership
Since our founding more than 50 years ago, Vanguard has set the standard for driving down the cost of investing, lowering expense ratios more than 2,100 times. This influence is widely known as the “Vanguard effect,” where our industry presence often encourages other firms to reduce their fees, resulting in lower costs for all investors.
The 2026 reductions extend this legacy and demonstrate how disciplined cost management and strong performance continue to create broad, lasting value for investors. At Vanguard, lowering costs is not a one-time initiative. It is part of who we are, and we hope to continue doing so as we serve investors today and in the future.
1 Savings due to the reduction in expense ratios were calculated on a share class basis for each fund for which there is a Vanguard-initiated reduction. To estimate 2026 savings, 2025 year-end AUM was multiplied by the 2026 reduced expense ratio.
2 Asset-weighted average U.S. fund expenses, as a share of 2025 average net U.S. assets. Figures as of December 31, 2025.
3 Vanguard is owned by its funds, which are owned by Vanguard's fund shareholder clients.
4 All competitor fund data sourced from Morningstar Direct as of November 2025. The combination of Morningstar Category, Investment Type, and Management Style define Vanguard’s “peer group.” Lowest decile expense ratios are calculated excluding Vanguard funds. Vanguard’s updated expense ratios (effective February 2, 2026) were compared to the lowest decile expense ratios in each “peer group.” Summing all that were less than or equal to the lowest decile expense ratio and dividing by total resulted in the percentage of funds in the lowest cost decile.
5 All competitor fund data sourced from Morningstar Direct as of November 2025. The combination of Morningstar Category, Investment Type, and Management Style define Vanguard’s “peer group.” Lowest decile expense ratios are calculated excluding Vanguard funds. Vanguard’s updated expense ratios (effective February 2, 2026) were compared to the lowest decile expense ratios in each “peer group.” Summing all that were less than or equal to the lowest decile expense ratio and dividing by total resulted in the percentage of funds in the lowest cost decile.
Notes:
Vanguard is reducing expense ratios for certain share classes of some funds. There is no guarantee that any individual investor will save money due to the reductions in fund expense ratios. Not all fund share classes will have a reduced expense ratio and therefore not all investors will experience the estimated savings. Investors that purchase the relevant funds after the expense ratios have been reduced will not experience savings. Savings means future money not spent on expense ratios, and does not entail a rebate or deposit of any sort. Savings figures are estimates and should not be relied upon. Savings is based on data as of December 31, 2025; if other data is used, savings may differ. Estimated savings accrue to existing investors holding relevant share classes for 2025 and 2026. For illustrative purposes only. Past performance is not indicative of future results.
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