Vanguard announced reductions in management fees for 53 mutual funds on Feb. 2, continuing the industry trend toward lower administrative costs for mutual funds and ETFs.

The fee reductions will save investors nearly $250 million by 2026, according to the investment firm.

In the past two years, Vanguard has cut fees and generated nearly $600 million in savings for investors, the company said. The average “expense ratio” for a Vanguard fund is now 0.06%, or six cents on every $100.

A year ago, Vanguard cut management fees for 87 mutual funds and said the reductions were the largest in the firm’s history.

Vanguard is the second largest asset manager, after BlackRock, according to the Institute of the Sovereign Heritage Fund. Vanguard has 12 trillion dollars in managed assets.

In the investment industry, an expense ratio is the annual cost of owning a mutual fund or exchange-traded fund. Basically it is a management fee, paid by the investor to the management company.

The fee is expressed as a percentage of your investment. Fees are typically higher in actively managed funds and lower in “passive” funds, which track the performance of a market index.

Any fee higher than 1% “is high and should be avoided,” Bankrate told a June 2025 report.

Expense ratios have been falling. The average fee for a stock mutual fund has declined from 0.99% in 2000 to 0.4% in 2024 on an asset-weighted basis, a calculation that favors the largest funds, according to Bankrate.

Many passive funds now have expense ratios of less than 0.1%, or 10 cents for every $100.

The gradual decline in expense ratios reflects a shift toward no-load funds, which typically charge no fees or commission when you buy or sell stocks, according to a March 2025 report. report from the non-profit Investment Company Institute.

Between 1996 and 2024, the institute said, expense ratios for stock mutual funds declined by 62%. Bond fund expense ratios fell 55%.

Here are some examples of recently reduced fees for Vanguard funds:

• For the Vanguard Total Stock Market Index Fund, the expense ratio decreased from 0.14% to 0.06%.

• For the Vanguard Total International Bond Index Fund, the expense ratio fell from 0.06% to 0.03%.

• For the Vanguard International High Dividend Yield ETF, the expense ratio fell from 0.17% to 0.07%.

Vanguard owns the funds it manages, company officials said, a structure that allows it to return value to investors.

“Vanguard is investor-owned – we have no outside shareholders or inside owners who benefit from our clients,” Vanguard CEO Salim Ramji said in a statement. “These rate reductions, more than half a million dollars over the past two years, are a clear expression of our purpose and commitment to our customers as landlords.”

This article originally appeared in USA TODAY: Vanguard is cutting many mutual fund and ETF fees, reflecting the industry trend