Vanguard Drops Its Average Fee to Just 0.06% With Latest Cuts

(Bloomberg) — Vanguard Group has unleashed another round of fee cuts across its lineup of mutual funds and exchange-traded funds, further tightening the screws on an industry already known for its low costs.

The Jack Bogle-founded asset manager, which oversees about $12 trillion, is lowering costs for 84 share classes of mutual funds and ETFs across 53 funds in total, Vanguard said in a press release Monday. The reductions bring Vanguard’s average asset-weighted expense ratio to 0.06%, shaving one basis point from last year’s record fee cut.

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Monday’s fee cuts are par for the course for Vanguard, which has reshaped the asset management world over the past 50 years with its low-cost index funds — pressuring its peers to drop their own costs to rock-bottom levels in order to compete. Now, as that race-to-the-bottom seemingly hits its limit with the average fee on new funds beginning to rise, Vanguard is sticking to its blueprint of steadily lowering fees.

“Vanguard is investor-owned — we have no outside stockholders or inside owners profiting from our clients,” Vanguard chief executive officer Salim Ramji said in Monday’s release. “These fee reductions — more than half a billion dollars over the past two years — are a clear expression of our purpose and commitment to our clients as owners.”

Between last year and this year’s cost cuts, Vanguard estimates its investors have saved about $600 million, according to the release.

Vanguard’s unique ownership structure blunts some of the margin-pressure that its competitors feel from low costs. Fund shareholders elect its board members, who in turn funnel extra cash or assets generated by its products toward lowering costs.

Nonetheless, Vanguard pulls in much less fee revenue from its $12 trillion in assets than its peers. Despite ranking second in overall ETF assets, the Valley Forge, Pennsylvania-based firm generated about $1.5 billion in fee revenue last year from its US-listed ETFs, trailing issuers with smaller AUM levels, Bloomberg Intelligence data shows. That compares to a $5.4 billion haul for BlackRock’s US-listed ETF lineup, which is only 6% larger than Vanguard’s at the end of 2025.

Vanguard’s average fees are continuing to drift lower even as the asset manager stages a push into actively-managed funds, which tend to command higher expense ratios. The firm launched its first traditional stockpicking ETFs last year, a trio which includes the Vanguard Wellington Dividend Growth Active ETF (ticker VDIG), which ranks as its costliest ETF with a 0.40% fee.