Costs matter. They eat into your mutual fund's returns before you earn a penny. The average Vanguard fund expense ratio is 82% less than the industry average. Compare our expense ratio of 0.18% with the industry average of 1.01%.*
A striking cost advantage
"If there's anything in the whole world of mutual funds that you can take to the bank, it's that expense ratios help you make a better decision."
"In every single time period and data point tested, low-cost funds beat high-cost funds."
Do you know why costs matter? No one can predict the market, but the study by Morningstar, the independent research firm, concluded that expense ratios were the most dependable predictor of performance.
This hypothetical illustration does not represent any particular investment. The potential savings that could be obtained are based on our average fund expenses. Actual savings will vary by fund, depending on the fund's expense ratio.
At Vanguard, you keep more of what you earn because we manage our funds at cost—they cost you what they cost us to run them.
How Vanguard keeps your costs low
No sales loads
No 12b-1 distribution or marketing fees
No account service fees†
All investments are subject to risk.
*Sources: Vanguard and Lipper, a Thomson Reuters Company, as of December 31, 2015.
The expense ratio is a mutual fund's operating expenses expressed as a percentage of average net assets. The expense ratio includes management, administrative, marketing, and distribution fees. It is calculated annually and directly reduces the fund's returns to shareholders.