(Reuters) – Asset manager Vanguard said on Monday it was lowering the cost of investing across its fund lineup in its largest cut ever and estimated that this would translate into savings of more than $350 million for its investors this year.
Valley Forge, Pennsylvania-based Vanguard slashed the expense ratio, or the cost of owning a mutual fund or exchange-traded fund, between one and six basis points across 87 of its funds, effective Feb. 1.
The fee cut will lower costs across its bond mutual funds, ETFs, U.S. equity, international equity and money market funds.
“The reductions will save Vanguard’s investors more than $350 million in 2025 alone, the largest annual expense ratio reduction in Vanguard’s nearly 50-year history,” the company said.
“Lower fees mean fund investors can keep more of their returns and a competitive edge for our funds,” said Greg Davis, Vanguard’s chief investment officer.
Chief Executive Officer Salim Ramji, who took over the mantle in July, laid out plans last year to expand the firm’s fixed-income offering, given the market’s size and opportunities.
“Lower costs enable investors to keep more of their returns, and those savings compound over time,” Ramji said.
Bonds were poised to play a crucial role in investors’ portfolios, according to Davis.
Founded by Jack Bogle in 1975, the company has about $10.4 trillion in assets under management as of Nov. 30, 2024.
Vanguard and larger rival BlackRock are the world’s largest providers of ETFs – low-cost products aimed at retail investors looking for an inexpensive way to invest in the biggest global markets.
Vanguard offered 428 funds worldwide as of Dec. 31, 2024, with 212 of these in the United States.
It has lowered investing costs more than 2,000 times since its founding, the company said.
(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Pooja Desai)
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