Vanguard is expanding access to lower investments fees from Wall Street to Main Street with its latest move.
Vanguard’s latest salvo in an ongoing fee battle
Effective immediately, the Malvern, Pennsylvania-based investment giant is lowering the investment minimum from $10,000 to $3,000 for its so-called “Admiral Shares” on 38 index funds.
That move, which will give smaller investors access to lower costs, is expected to save customers some $71 million vs. existing fees.
In addition, Vanguard has petitioned the Securities and Exchange Commission to launch Admiral Shares of another five index funds, including the Vanguard High Dividend Yield Index Fund and Vanguard Total World Stock Index Fund.
If approved, such a move would broaden the range of Vanguard products with new, lower fees, creating an additional $10 million in savings.
All in all, these latest moves will give retail investors (aka mom and pop investors) access to the same kinds of low fees long enjoyed by large institutional investors like hedge funds, endowments and pensions.
Vanguard’s low-fee offensive is being widely seen as a response to what’s going on at investment arch rival Fidelity Investments.
In August 2018, Fidelity introduced an industry first — a suite of groundbreaking no-fee index funds including:
- Fidelity ZERO Total Market Index Fund (FZROX)
- Fidelity ZERO International Index Fund (FZILX)
- Fidelity ZERO Large Cap Index Fund (FNILX)
- Fidelity ZERO Extended Market Index Fund (FZIPX)
It’s hard to be zero minimums for account opening, zero investment minimums, zero account fees and zero domestic money movement fees!