February may very well be an opportune month for investors that are interested in Vanguard’s funds. Today, Vanguard announced that it has lowered the fees for 168 share classes. This includes 87 funds, giving investors a lower barrier of entry for a variety of different Vanguard strategies.
According to Vanguard, this event marks the largest fee cut in the firm’s history. In total, Vanguard asserts that the fee cuts amount to over $350 million in savings for 2025.
“Jack Bogle founded Vanguard in 1975 with a simple purpose—to design an investor-owned company that would serve a single constituency, our clients,” added Salim Ramji, Vanguard’s chief executive officer. “At Vanguard, we’re focused on creating value for our investors, not extracting value from them. We’re proud to build on Vanguard’s legacy of lowering the costs of investing—which we have done more than 2,000 times since our founding—by announcing our largest ever set of expense ratio reductions. Lower costs enable investors to keep more of their returns, and those savings compound over time.”
Fixed Income Experience at a Discount
Among the Vanguard funds that are now available at reduced fees are some of the firm’s tried-and-tested fixed income ETFs. This includes the Vanguard Intermediate-Term Corporate Bond ETF (VCIT ).
VCIT taps into Vanguard’s fixed income experience to give investors access to a portfolio of corporate bonds with intermediate maturities. This strategy remains a highly popular choice, with VCIT holding over $48 billion in assets under management. VCIT has offered compelling returns, with the fund having a 30-day SEC yield of 5.36%, as of January 30, 2025.
Previously, VCIT’s fees sat at four basis points. However, the fund now only has a net expense ratio of three basis points.
Much like VCIT, the Vanguard Intermediate-Term Treasury ETF (VGIT ) has seen its expense ratio lowered to three basis points. This fund also provides intermediate-duration bond exposure, though it focuses on Treasuries instead.
With over $30 billion in assets under management, VGIT remains a highly sought-after means for building intermediate Treasury exposure. The fund has a 30-day SEC yield of 4.45%, as of January 30, 2025.
“It’s heartening to see Vanguard continue to carry out its legacy of low-cost, client-first investing," added Kirsten Chang, senior industry analyst at VettaFi. "This monumental fee cut will further cement the company’s dominance in the asset management space, and draw in even more investor loyalty with its reputation for stability and quality client service.”
Vanguard currently offers an extensive library of funds, many of which have been posting highly competitive results. The firm has more than 80 ETFs listed in the United States, accounting for over $3 trillion in assets under management.
For more news, information, and analysis, visit the Fixed Income Channel.
