16 May 2012
Vanguard ETFs expense ratios are low
Vanguard reports expense ratio changes April 27, 2012
Because your investment costs directly affect your net returns, Vanguard believes it's important for you to be aware of your mutual funds' expense ratios—in essence, the portions of the funds' operating expenses passed on to you and other shareholders, expressed as a percentage of their total assets. A fund's expense ratio may change from year to year in response to changes in its assets and/or changes in the cost of managing it. For example, economies of scale resulting from an increase in assets due to market appreciation or investor cash flow can result in a reduction, while a decline in assets can cause the expense ratio to rise.
In April 2012, updated prospectuses for certain Vanguard mutual funds and exchange-traded funds (ETFs) reported expense ratio changes, as noted in the table below. Other funds reported no changes.
Vanguard fund Share class Old expense ratio New expense ratio* Effective date Vanguard Inflation-Protected Securities Fund Investor 0.22% 0.20% 04/25/2012 Vanguard Total Bond Market Index Fund Admiral 0.11% 0.10% 04/25/2012 Vanguard Total Bond Market Index Fund ETF 0.11% 0.10% 04/25/2012 Vanguard 500 Index Fund Admiral 0.06% 0.05% 04/26/2012 Vanguard 500 Index Fund ETF 0.06% 0.05% 04/26/2012 Vanguard Balanced Index Fund Admiral 0.12% 0.10% 04/26/2012 Vanguard Balanced Index Fund Investor 0.26% 0.24% 04/26/2012 Vanguard Extended Market Index Fund Admiral 0.16% 0.14% 04/26/2012 Vanguard Extended Market Index Fund ETF 0.16% 0.14% 04/26/2012 Vanguard Extended Market Index Fund Investor 0.30% 0.28% 04/26/2012 Vanguard Growth Index Fund Admiral 0.12% 0.10% 04/26/2012 Vanguard Growth Index Fund ETF 0.12% 0.10% 04/26/2012 Vanguard Growth Index Fund Investor 0.26% 0.24% 04/26/2012 Vanguard Large-Cap Index Fund Admiral 0.12% 0.10% 04/26/2012 Vanguard Large-Cap Index Fund ETF 0.12% 0.10% 04/26/2012 Vanguard Large-Cap Index Fund Investor 0.26% 0.24% 04/26/2012 Vanguard Mid-Cap Growth Index Fund ETF 0.12% 0.10% 04/26/2012 Vanguard Mid-Cap Growth Index Fund Investor 0.26% 0.24% 04/26/2012 Vanguard Mid-Cap Index Fund Admiral 0.12% 0.10% 04/26/2012 Vanguard Mid-Cap Index Fund ETF 0.12% 0.10% 04/26/2012 Vanguard Mid-Cap Index Fund Investor 0.26% 0.24% 04/26/2012 Vanguard Mid-Cap Value Index Fund ETF 0.12% 0.10% 04/26/2012 Vanguard Mid-Cap Value Index Fund Investor 0.26% 0.24% 04/26/2012 Vanguard Small-Cap Growth Index Fund ETF 0.12% 0.10% 04/26/2012 Vanguard Small-Cap Growth Index Fund Investor 0.26% 0.24% 04/26/2012 Vanguard Small-Cap Index Fund Admiral 0.17% 0.16% 04/26/2012 Vanguard Small-Cap Index Fund ETF 0.17% 0.16% 04/26/2012 Vanguard Small-Cap Index Fund Investor 0.31% 0.30% 04/26/2012 Vanguard Small-Cap Value Index Fund ETF 0.23% 0.21% 04/26/2012 Vanguard Small-Cap Value Index Fund Investor 0.37% 0.35% 04/26/2012 Vanguard Tax-Managed Balanced Fund Admiral 0.15% 0.12% 04/26/2012 Vanguard Tax-Managed International Fund Admiral 0.18% 0.12% 04/26/2012 Vanguard Tax-Managed Small-Cap Fund Admiral 0.18% 0.13% 04/26/2012 Vanguard Total Stock Market Index Fund Admiral 0.07% 0.06% 04/26/2012 Vanguard Total Stock Market Index Fund ETF 0.07% 0.06% 04/26/2012 Vanguard Value Index Fund Admiral 0.12% 0.10% 04/26/2012 Vanguard Value Index Fund ETF 0.12% 0.10% 04/26/2012 Vanguard Value Index Fund Investor 0.26% 0.24% 04/26/2012 VVIF Balanced Portfolio — 0.30% 0.29% 04/27/2012 VVIF Capital Growth Portfolio — 0.44% 0.42% 04/27/2012 VVIF Conservative Allocation Portfolio — 0.20% 0.25% 04/27/2012 VVIF Diversified Value Portfolio — 0.40% 0.39% 04/27/2012 VVIF Equity Income Portfolio — 0.35% 0.33% 04/27/2012 VVIF Equity Index Portfolio — 0.19% 0.17% 04/27/2012 VVIF Mid-Cap Index Portfolio — 0.28% 0.26% 04/27/2012 VVIF REIT Index Portfolio — 0.30% 0.28% 04/27/2012 VVIF Total Stock Market Index Portfolio — 0.20% 0.18% 04/27/2012 Vanguard Market Neutral Fund Investor 1.80% 1.71% 04/27/2012 *As of the fund's most recent prospectus. What expense ratio changes mean for you It's fairly easy to determine how you're affected by changes like the ones we're reporting today. Each percentage point in an expense ratio represents an annual charge of $100 against every $10,000 you invest in that fund. A hypothetical fund with a 0.50% expense ratio charges its shareholders $50 for every $10,000 invested, so a reduction from 0.50% to 0.25% would represent a savings of $25 for every $10,000 you've invested. An increase from 0.25% to 0.35% would represent an additional charge of $10 for every $10,000 invested.
Because your investment costs directly affect your net returns, Vanguard believes it's important for you to be aware of your mutual funds' expense ratios—in essence, the portions of the funds' operating expenses passed on to you and other shareholders, expressed as a percentage of their total assets. A fund's expense ratio may change from year to year in response to changes in its assets and/or changes in the cost of managing it. For example, economies of scale resulting from an increase in assets due to market appreciation or investor cash flow can result in a reduction, while a decline in assets can cause the expense ratio to rise.
In April 2012, updated prospectuses for certain Vanguard mutual funds and exchange-traded funds (ETFs) reported expense ratio changes, as noted in the table below. Other funds reported no changes.
Vanguard fund Share class Old expense ratio New expense ratio* Effective date Vanguard Inflation-Protected Securities Fund Investor 0.22% 0.20% 04/25/2012 Vanguard Total Bond Market Index Fund Admiral 0.11% 0.10% 04/25/2012 Vanguard Total Bond Market Index Fund ETF 0.11% 0.10% 04/25/2012 Vanguard 500 Index Fund Admiral 0.06% 0.05% 04/26/2012 Vanguard 500 Index Fund ETF 0.06% 0.05% 04/26/2012 Vanguard Balanced Index Fund Admiral 0.12% 0.10% 04/26/2012 Vanguard Balanced Index Fund Investor 0.26% 0.24% 04/26/2012 Vanguard Extended Market Index Fund Admiral 0.16% 0.14% 04/26/2012 Vanguard Extended Market Index Fund ETF 0.16% 0.14% 04/26/2012 Vanguard Extended Market Index Fund Investor 0.30% 0.28% 04/26/2012 Vanguard Growth Index Fund Admiral 0.12% 0.10% 04/26/2012 Vanguard Growth Index Fund ETF 0.12% 0.10% 04/26/2012 Vanguard Growth Index Fund Investor 0.26% 0.24% 04/26/2012 Vanguard Large-Cap Index Fund Admiral 0.12% 0.10% 04/26/2012 Vanguard Large-Cap Index Fund ETF 0.12% 0.10% 04/26/2012 Vanguard Large-Cap Index Fund Investor 0.26% 0.24% 04/26/2012 Vanguard Mid-Cap Growth Index Fund ETF 0.12% 0.10% 04/26/2012 Vanguard Mid-Cap Growth Index Fund Investor 0.26% 0.24% 04/26/2012 Vanguard Mid-Cap Index Fund Admiral 0.12% 0.10% 04/26/2012 Vanguard Mid-Cap Index Fund ETF 0.12% 0.10% 04/26/2012 Vanguard Mid-Cap Index Fund Investor 0.26% 0.24% 04/26/2012 Vanguard Mid-Cap Value Index Fund ETF 0.12% 0.10% 04/26/2012 Vanguard Mid-Cap Value Index Fund Investor 0.26% 0.24% 04/26/2012 Vanguard Small-Cap Growth Index Fund ETF 0.12% 0.10% 04/26/2012 Vanguard Small-Cap Growth Index Fund Investor 0.26% 0.24% 04/26/2012 Vanguard Small-Cap Index Fund Admiral 0.17% 0.16% 04/26/2012 Vanguard Small-Cap Index Fund ETF 0.17% 0.16% 04/26/2012 Vanguard Small-Cap Index Fund Investor 0.31% 0.30% 04/26/2012 Vanguard Small-Cap Value Index Fund ETF 0.23% 0.21% 04/26/2012 Vanguard Small-Cap Value Index Fund Investor 0.37% 0.35% 04/26/2012 Vanguard Tax-Managed Balanced Fund Admiral 0.15% 0.12% 04/26/2012 Vanguard Tax-Managed International Fund Admiral 0.18% 0.12% 04/26/2012 Vanguard Tax-Managed Small-Cap Fund Admiral 0.18% 0.13% 04/26/2012 Vanguard Total Stock Market Index Fund Admiral 0.07% 0.06% 04/26/2012 Vanguard Total Stock Market Index Fund ETF 0.07% 0.06% 04/26/2012 Vanguard Value Index Fund Admiral 0.12% 0.10% 04/26/2012 Vanguard Value Index Fund ETF 0.12% 0.10% 04/26/2012 Vanguard Value Index Fund Investor 0.26% 0.24% 04/26/2012 VVIF Balanced Portfolio — 0.30% 0.29% 04/27/2012 VVIF Capital Growth Portfolio — 0.44% 0.42% 04/27/2012 VVIF Conservative Allocation Portfolio — 0.20% 0.25% 04/27/2012 VVIF Diversified Value Portfolio — 0.40% 0.39% 04/27/2012 VVIF Equity Income Portfolio — 0.35% 0.33% 04/27/2012 VVIF Equity Index Portfolio — 0.19% 0.17% 04/27/2012 VVIF Mid-Cap Index Portfolio — 0.28% 0.26% 04/27/2012 VVIF REIT Index Portfolio — 0.30% 0.28% 04/27/2012 VVIF Total Stock Market Index Portfolio — 0.20% 0.18% 04/27/2012 Vanguard Market Neutral Fund Investor 1.80% 1.71% 04/27/2012 *As of the fund's most recent prospectus. What expense ratio changes mean for you It's fairly easy to determine how you're affected by changes like the ones we're reporting today. Each percentage point in an expense ratio represents an annual charge of $100 against every $10,000 you invest in that fund. A hypothetical fund with a 0.50% expense ratio charges its shareholders $50 for every $10,000 invested, so a reduction from 0.50% to 0.25% would represent a savings of $25 for every $10,000 you've invested. An increase from 0.25% to 0.35% would represent an additional charge of $10 for every $10,000 invested.
