Vanguard ETF & Mutual Fund Fee Cuts (February 2026)

Vanguard just announced a new round of expense ratio drops spanning 53 funds (roughly 25% of them), totaling close to $250 million in fee reductions in 2026. See their press release and full list of changes. This comes almost exactly a year after their February 2025 cuts which spanned 87 funds with an estimated $350 in fee reductions that year.

Over the past two years, Vanguard has reduced fees on most of its fund lineup totaling nearly $600 million in savings for investors—Vanguard’s largest-ever two-year combined cost reduction. Vanguard’s product lineup across all asset classes and styles now has an average expense ratio of 0.06%, reinforcing the firm’s longstanding cost leadership position. These consistently low costs help investors keep more of their returns, contributing to stronger long-term performance.

Additional media coverage at the Wall Street Journal (gift article) and Morningstar.

At this point, most of their expense ratios are so low on their big funds that most individual investors won’t notice much of a difference. The largest index funds VTI, VXUS, BND are unchanged. Target Retirement funds are also unchanged. However, I do believe it is an important indicator that Vanguard is still lowering costs as their assets under management continue to grow.

As an individual investor, it’s also important to remember that costs matter and those costs directly affect performance. Jack Bogle was right in his past skepticism of ETFs in that over time, the group has grown to include a lot of complex, expensive options. While the overall, asset-weighted average expense ratio for ETFs has declined over time, the average fee of newly launched ETFs has actually increased. Be wary of all those new, fancy ETFs that make attractive promises like limited downside and extremely high dividend income. This “Boomer candy” almost always comes with a higher expense ratio, and I am willing to bet it will also end up with lower long-term returns. New tricks, same old story.

Personally, I note that the Vanguard 0–3 Month Treasury Bill ETF (VBIL) lowered its expense ratio from 0.07% to 0.06%. My current go-to is iShares 0-3 Month Treasury Bond ETF (SGOV), which is at 0.09%.

The 30-day median bid/ask spread on VBIL is now 0.01% of market price, meaning its liquidity is now basically on the same level as SGOV (also at 0.01%). I will probably start using VBIL instead of SGOV for the times when I want a short-term cash equivalent in a brokerage account. 0.03% is a small difference, but I gotta keep incentivizing those lower costs. Long live the Vanguard Effect!