Vanguard Announces Fee Reductions Across 108 ETFs

The Vanguard Group Inc. announced Monday that it has reduced fees on 168 share classes, including 108 ETF share classes, of 87 investment funds in what the firm called its largest fee cut to date. Vanguard offered 428 funds worldwide—212 in the U.S.—as of the end of 2023, according to its website.

The firm projects that the overall fee reductions will save investors of all kinds more than $350 million this year alone. Of the mutual funds with reduced fees, 48 include institutional or institutional plus share classes. The fee reductions for these share classes ranged from one to five basis points.

Over the past 10 years, ETF usage by pension funds, endowments, foundations and sovereign wealth funds has increased fourfold, with most of that growth coming in the three years through 2024, according to data from S&P Dow Jones Indices. As of the end of 2023, institutional asset owners had $56 billion invested in ETFs, the firm reported.

“Lower fees mean fund investors can keep more of their returns and a competitive edge for our funds,” said Greg Davis, Vanguard’s president and chief investment officer, in a press release. “When you think about our actively managed funds, our managers don’t have to take unnecessary risk to earn back our fees. Our financial model and structure [create] a virtuous cycle of economies of scale, where we can continue to reduce fees and invest in things like technology and talent.”

The prospectuses of all affected funds were updated Monday in filings with the Securities and Exchange Commission, according to Vanguard’s announcement.

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Expense ratios may cover investment advisory fees, marketing and distribution expenses, brokerage fees and custodial, transfer agency, legal and accounting fees, according to Vanguard. The full list of funds with reduced fees can be found here.

The company had about $10.4 trillion in assets under management, as of November 30, 2024. At the end of 2023, it had approximately $8.6 trillion in assets under management worldwide.

The move to lower fees come less than one year after Vanguard announced that Salim Ramji, the former head of BlackRock Inc. iShares, would take over as the firm’s CEO, succeeding Tim Buckley, who retired at the end of 2024.

Tags: ETFs, exchange-traded funds, fees, S&P Dow Jones Indices, Salim Ramji, Vanguard Group

January was a busy month for the Canada Pension Plan, which signed two real estate deals at the end of the month, on top of others announced by the pension giant earlier this year. The two new deals involve joint ventures in Brazil and South Korea.

CPPIB signed a 50-50 joint venture agreement with Brazil’s largest residential real estate developer, Cyrela Brazil Realty. In São Paulo, the two will invest 1.7 billion reais ($287.4 million) to build residential condominiums, which they expect to bring in more than 6 billion reais in potential sales over the next several years. Cy.Capital, Cyrela’s fund management subsidiary, will manage the investment vehicle.

“The residential market in São Paulo has strong fundamentals, supported by favorable demographics, [a] low unemployment level and resilient household income growth in the city,” Ricardo Szlejf, CPP Investments’ head of real assets for Latin America, said in a statement.

The pension fund also announced a joint venture worth 500 billion South Korean won ($350 million) with South Korean rental housing provider MGRV Inc. to develop rental housing projects. CPPIB, which announced the deal as its first direct investment in Korea’s residential sector, will own 95% of the operation, with MGRV owing the remaining 5%. According to the companies, they plan to develop properties in the Korean capital, Seoul, and target areas near major business districts and universities. As part of the joint venture, CPPIB has committed to invest up to 133 billion South Korean won ($91.14 million) to seed projects in Seoul.

“This joint venture offers an excellent opportunity to enter the residential sector in Korea and meet the strong demand for high-quality rental housing in the greater Seoul area, where half of Korea’s population resides,” Sophie van Oosterom, CPPIB’s head of real estate, said in a statement.

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The deals in Brazil and Korea are in addition to a joint venture CPPIB formed with real estate firm Bridge Industrial and a deal announced in early January to sell its 49% stake in four real estate joint venture projects with Chinese real estate firm Longfor Group to an affiliate of Dajia Insurance Group. The pension fund estimated that the net proceeds from the sale would be approximately C$235 million ($163.3 million) before closing adjustments.

In addition to the real estate deals during the month, CPPIB also sold its 15.75% stake in U.S. power producer Calpine to Constellation Energy for net proceeds of approximately $700 million in cash and $1.9 billion in Constellation stock. The pension fund announced in 2017 an initial investment of $750 million in Calpine that it made along with a consortium of investors. The sale is expected to close in the second half of 2025.

“We are pleased by the success of our investment in Calpine and view this transaction as an excellent opportunity to realize strong returns for the CPP Fund,” Bill Rogers, CPPIB’s head of sustainable energies, said in a statement.