MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication
an InvestmentWires' Publication
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MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication |
|
Thursday, April 21, 2005 Vanguard Fee Cuts Will Hit of Quarter of AUM Vanguard's latest round of fee cuts will lower the fees charged on approximately 27 percent, or $225 billion of the firm's $825 billion in assets under management, reports the Wall Street Journal. Vanguard is lowering the requirements for shareholders to qualify for its low cost Admiral shares on 63 funds. Previously, investors qualified for the Admiral shares if they had an account of at least $250,000 or $150,000 in a Vanguard account for at least three years. Investors with at least $50,000 who have been customers for at least ten years (and who register for online account access) are also eligible for the lower priced shares. On May 10, investors with only $100,000 with Vanguard will be eligible for the Admiral shares, with all eligible investors automatically converted to the new share class in July. The change will make 700,000 accounts eligible for the lower fees. According to the WSJ, Admiral share fees are typically half of the cost of Vanguard's Investor class shares. For instance, fees for Admiral shares of the Vanguard 500 Index are nine basis points, compared to 18 basis points for Investor class shares. Likewise, fees for Vanguard's Total Stock Index are nine basis points for Admiral class and 19 basis points for Investor class. Vanguard introduced the Admiral share system in 2000 in order to retain and reward long-term investors with sizeable accounts, as well as bring in new money. But with Fidelity and American Funds also on the low-fee warpath, it remains to be seen whether Vanguard will not only be able to hold on to existing investors, but make up for the fee cuts by attracting new money. Printed from: MFWire.com/story.asp?s=9538 Copyright 2005, InvestmentWires, Inc. All Rights Reserved |