For decades, Vanguard’s reputation has been built on ultra-low cost, shareholder-friendly investment strategies. Many of Vanguard’s ETFs and mutual funds are among the cheapest in the category, including the Vanguard S&P 500 ETF (VOO) and the Vanguard Total Stock Market ETF (VTI), both priced at just 0.03% annually.
Despite this, Vanguard is looking for opportunities to go even lower. In February 2025, Vanguard announced one of the biggest fee-cutting sprees in its history.
It reduced the expense ratio on 87 of its funds, saving investors an estimated $350 million in fees annually.
For years, the fee war has been a competitive battleground for issuers. Investors generally migrate toward cheaper options, and issuers have responded by making their funds less expensive to own.
Competing with Vanguard on cost, however, isn’t easy. The decision to slash the fees on six more of its ETFs just made it more difficult.
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Jack Bogle’s take on keeping Vanguard’s fees low
Vanguard’s choice to keep fees as low as possible originates from its legendary founder, Jack Bogle.
At an investor conference in 2025, he said:
In investing, realize that you get what you don’t pay for. Whatever future returns the markets are generous enough to deliver, few investors will succeed in capturing 100% of those returns, simply because of the high costs of investing — all those commissions, management fees, investment expenses, yes, even taxes — so pare them to the bone.
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The justification is simple — lower fees equal more money that investors can keep for themselves. That philosophy has helped make Vanguard one of the biggest money managers in the world and one that focuses on investor success perhaps more than any other.
The recent step to cut fees again on several of its ETFs reinforces that notion.
Vanguard lowers the expense ratio on 6 European ETFs
The half-dozen ETFs that are getting their expense ratio cut in this round come from the company’s European market.
These funds are domiciled in Europe and primarily trade on the European exchanges, but can potentially be cross-listed and available on other international exchanges.
Vanguard ETFs for which expense ratios will be reduced:
- Vanguard FTSE All World UCITS ETF: 0.22% to 0.19%
- Vanguard FTSE North America UCITS ETF: 0.10% to 0.08%
- Vanguard FTSE Emerging Markets UCITS ETF: 0.22% to 0.17%
- Vanguard FTSE Emerging Markets All Cap UCITS ETF: 0.24% to 0.19%
- Vanguard FTSE Japan UCITS ETF: 0.15% to 0.10%
- Vanguard Germany All Cap UCITS ETF: 0.10% to 0.07%
The Vanguard FTSE All World UCITS ETF is easily the largest of the bunch, with assets of more than $21 billion. According to Vanguard, the fee cuts are expected to save investors a total of $18.5 million annually.
Added to the fee reduction on seven fixed income ETFs completed earlier this year, the number rises to around $22 million.
Key Takeaways:
- Vanguard is cutting the expense ratio on six European-listed ETFs on October 7.
- The move is estimated to save investors $22 million in fees annually.
- This follows a fee cut executed in February on 87 U.S.-listed Vanguard ETFs.
- Fee cuts are shareholder-friendly and create an opportunity for improved investor returns.
Final thoughts: Vanguard continues to reward its shareholders
Vanguard is already the ETF industry’s low-cost leader and continues to lower fees on many of its products today.
This reinforces Jack Bogle’s original vision that the investment-fund industry should focus more on delivering superior returns for investors instead of fat fees for the issuers.
Looking at some of these expense ratios, the fee reductions may seem small, but they can still add up over time.
Vanguard continues to set the industry standard as one of the most shareholder-friendly investment companies.
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