--- title: Vanguard Slashes Investing Costs With 'Largest Fee Cut' in Company History description: Vanguard announced it was slashing fees on 87 ETFs and mutual funds on Monday. authors: - name: Martha C. White role: Writer url: https://money.com/author/martha-c-white/ education: BA, English, Princeton University at_money_since: 2015 articles: 349 covers: - Investing - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Federal Reserve Rate Cuts - Health and Wellness - Housing - Identity Theft - Insurance - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Retirement - Shopping - Taxes - Technology editors: - name: Katherine Peach role: Associate Editor url: https://money.com/author/katherine-peach/ bio: Katherine Peach is an associate editor with a focus on news and email at Money. She didn’t always intend to write about money. She’s a classically trained pianist who dreamed of becoming an archaeologist. However, in 2007 Katherine began working in financial publishing as an editor for Agora Inc. (Apparently, unearthing ideas about improving your personal finances isn’t such a bad career alternative!) Katherine’s writing and editing work has been featured in Investing Daily, Clever, Investor Junkie, The Palm Beach Letter, Truth & Plenty, Independence Monthly, NICHE, AmericanStyle, AntiqueWeek, Millennial Money, Money Done Right, TheStreet, Sure Dividend and many others. Katherine holds a Bachelor of Arts in Ancient Studies with concentrations in Archaeology and Ancient Languages and a minor in Literature from the University of Maryland, Baltimore County. She is a member of Phi Beta Kappa. education: University of Maryland, Baltimore County at_money_since: 2025 articles: 14 covers: - Investing - Banking - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Federal Reserve Rate Cuts - Health and Wellness - Housing - Identity Theft - Insurance - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Retirement - Shopping - Taxes published: '2025-02-05T14:13:06.000Z' modified: '2025-02-05T14:13:06.000Z' section: Investing tags: - News word_count: 591 canonical: https://money.com/vanguard-cuts-fund-fees/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Vanguard sign](https://img.money.com/2025/02/News-Vanguard-Investing-Fees.jpg) Brokerage giant [Vanguard](https://money.com/pr/u2d3b15bcef0?ap_referrer=https%253A%252F%252Fmoney.com%252Fvanguard-cuts-fund-fees%252F) announced on Monday that it is slashing expense-ratio fees on dozens of its funds, a move the company said will save investors $350 million this year. In a news release, Vanguard said it was dropping these fees on 87 mutual funds and exchange-traded funds (ETFs), an action the company called "the largest fee cut in Vanguard history." Even before this announcement, Vanguard had lower average expense fees than its peers, the annual [US Fund Fee Study](https://www.morningstar.com/business/insights/blog/funds/us-fund-fee-study) from Morningstar found. In 2023, Vanguard had an average 0.08% fee. With the new announcement, its asset-weighted average fee has dropped to just 0.07%, versus 0.44% across the industry, according to [Bloomberg](https://www.bloomberg.com/news/articles/2025-02-03/vanguard-s-average-fee-is-now-just-0-07-after-biggest-ever-cut). ## SoFi® is for everyone, including new and seasoned investors ### With SoFi®, you can build a balanced portfolio and trade stocks, ETFs and options as frequently as you want, commission-free. Click your state to start investing today! [Start Investing](https://money.com/pr/kaca5eee7c9d?ap_referrer=%2Fvanguard-cuts-fund-fees%2F) INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE. Brokerage and Active investing products offered through SoFi Securities LLC, member FINRA / SIPC. The push to lower expense ratios is a continuation of a long trend that makes investing cheaper for the average American. Morningstar noted that expense ratios have lowered considerably over the last two decades, industrywide: It found that the asset-weighted average fee fell from 0.87% in 2004 and to 0.36% in 2023, and it calculated that lower investing fees saved investors a total of $6 billion in 2019 alone. The fees go toward covering the costs of administering, managing and other services. Although investors might not notice expense-ratio fees because they’re deducted from a fund’s total value, they can add up over time and weigh on returns. Funds that aren't actively managed have considerably lower expense ratios because they don't have to spend money on portfolio managers to research and select trades. (As it turns out, they often [perform better](https://executiveeducation.wharton.upenn.edu/thought-leadership/wharton-wealth-management-initiative/wmi-thought-leadership/active-vs-passive-investing-which-approach-offers-better-returns/), particularly over an extended period of time.) ## Will other firms also cut fees? If history is any guide, Vanguard’s announcement could put pressure on its competitors to follow suit. The economics of online brokerages underwent a major shift in 2019 when online stock-trading platform Interactive Brokers rolled out IBKR Lite, which took the then-radical step of eliminating commissions on all trades of U.S.-listed stocks and ETFs. The action triggered a price war among big brokerage firms like [E-Trade](https://money.com/pr/xece06caa21b?ap_referrer=https%253A%252F%252Fmoney.com%252Fvanguard-cuts-fund-fees%252F), [Schwab](https://money.com/pr/nb48fc0bd567?ap_referrer=https%253A%252F%252Fmoney.com%252Fvanguard-cuts-fund-fees%252F), [TD Ameritrade](https://money.com/pr/e591894840b4?ap_referrer=https%253A%252F%252Fmoney.com%252Fvanguard-cuts-fund-fees%252F) and [Fidelity](https://money.com/pr/v3fdf8429a68?ap_referrer=https%253A%252F%252Fmoney.com%252Fvanguard-cuts-fund-fees%252F). All followed suit, announcing in subsequent months that they also would cut trading commission fees on common investment instruments to zero. (Vanguard joined them in early 2020.) Some market observers put the start of the shift further back, pinpointing trading app [Robinhood’s](https://money.com/pr/p44f1c8c6654?ap_referrer=https%253A%252F%252Fmoney.com%252Fvanguard-cuts-fund-fees%252F) 2013 debut. The start-up gained notoriety by offering free trades at a time when typical commissions ranged between $7 and $10. At those prices, institutional investors could make money trading, but average Joes and Janes would have to get lucky — repeatedly — just to keep breaking even on their trades, never mind turn a profit. Robinhood's success proved that, even after eliminating fees on trades for domestic stocks and ETFs, online brokers still could make money. They did this, in part, by retaining trading commissions for most mutual funds as well as more complex trading instruments like futures and options (although a number of brokerages now offer free options trading, as well). As the barrier to trading lowered, many platforms also added higher tiers or products offering educational insight and advice for novice investors. Lower investing costs are democratizing investing more broadly. The Federal Reserve [found](https://www.federalreserve.gov/publications/october-2023-changes-in-us-family-finances-from-2019-to-2022.htm) that the number of families who directly own stock has jumped even more since then, rising from 15% in 2019 to 21% in 2022 — the largest change on record, according to the central bank. ## It's never too late to start investing ![START INVESTING](https://s3.consumersadvocate.org/prd/image/image/20107/medium_fab74697-be3e-49a4-8040-ea434cb0e5c3.png) Our Partner [START INVESTING](https://money.com/go/fed32aef0f27?bidid=4031023044&pmeta=p129-c537-u36516&ptid=662468356&ptoken=17886fefc22204b64f1778e108430202) ![START INVESTING](https://s3.consumersadvocate.org/prd/image/image/37704/medium_bb9499f2-9b69-44d9-930a-d80a69dc114d.webp) Our Partner [START INVESTING](https://money.com/go/67671d67568d?bidid=4031023051&pmeta=p129-c537-u36516&ptid=662468356&ptoken=d397ca349e12fd32fdfb057029c37ce0) ![START INVESTING](https://s3.consumersadvocate.org/prd/image/image/20399/medium_4774dcec-4aba-4810-85b3-843773401646.png) Our Partner [START INVESTING](https://money.com/go/66a4478dd019?bidid=4031023047&pmeta=p129-c537-u36516&ptid=662468356&ptoken=1693dc40926dafa99b7ee4afaa5f8c99) ![START INVESTING](https://s3.consumersadvocate.org/prd/image/image/16291/medium_00c49a6e-a3eb-40b2-b805-13b4258cd431.png) Our Partner [START INVESTING](https://money.com/go/2e131ebf7f43?bidid=4031023040&pmeta=p129-c537-u36516&ptid=662468356&ptoken=da24ddd6869326e5224311fd8549e7dd) ![START INVESTING](https://s3.consumersadvocate.org/prd/image/image/38704/medium_33d1fef9-951f-43b5-a923-54259b40e275.webp) Our Partner [START INVESTING](https://money.com/go/7a791bae8248?bidid=4031023054&pmeta=p129-c537-u36516&ptid=662468356&ptoken=e0adf132fbc76696525378e50f72c8e0) ![](https://s3.consumersadvocate.org/prd/image/image/20107/medium_fab74697-be3e-49a4-8040-ea434cb0e5c3.png) Become a better investor with SoFi® [Start Investing](https://money.com/pr/v42ab7f4acf9?ap_referrer=%2Fvanguard-cuts-fund-fees%2F) ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/vanguard-cuts-fund-fees/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Investing", "item": "https://money.com/investing/" }, { "@type": "ListItem", "position": 3, "name": "Brokers", "item": "https://money.com/brokers/" }, { "@type": "ListItem", "position": 4, "name": "Vanguard Slashes Investing Costs With 'Largest Fee Cut' in Company History" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/vanguard-cuts-fund-fees/#webpage", "url": "https://money.com/vanguard-cuts-fund-fees/", "name": "Vanguard Slashes Investing Costs With 'Largest Fee Cut' in Company History", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2025-02-05T14:13:06.000Z", "mainEntity": { "@id": "https://money.com/vanguard-cuts-fund-fees/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/vanguard-cuts-fund-fees/#breadcrumb" }, "dateModified": "2025-02-05T14:13:06.000Z" }, { "@type": "NewsArticle", "headline": "Vanguard Slashes Investing Costs With 'Largest Fee Cut' in Company History", "articleSection": "Investing", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2025/02/News-Vanguard-Investing-Fees.jpg", "width": 2880, "height": 1920, "caption": "News-Vanguard-Investing-Fees" } ], "author": [ { "@type": "Person", "name": "Martha C. 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