We aim to keep costs low
Some funds cost significantly more to own than others. That can be true even when holdings are similar. Our funds, on average, have an expense ratio one-sixth the industry average.
Use the tool below to compare the potential effect of different expense ratios on an account’s balance. (An expense ratio is the percentage of a fund’s assets used to pay to run the fund.)
Note that the average expense ratio for Vanguard funds in 2008 was 0.20%. The average expense ratio for all industry funds was 1.19%. The average expense ratio for TIAA-CREF funds in 2008 was 0.34% and the average expense ratio for Fidelity funds in 2008 was 1.03%.
Source: Lipper Inc.
The performance data shown represent past performance, which is not a guarantee of future results. Unlike stocks and bonds, U.S. Treasury bills are guaranteed as to the timely payment of principal and interest. U.S. government backing of Treasury or agency securities applies only to the underlying securities and does not prevent share-price fluctuations. Index performance is not illustrative of any particular investment because you cannot invest in an index. All funds are subject to risks. Investments in bond funds are subject to interest rate, credit, and inflation risk.
*From 1926 through 2008, the average annual return for stocks was 9.7%, the average annual return for bonds was 5.5%, and the average annual return for short-term reserves was 3.8%. Returns for stocks are based on the Standard & Poor’s 500 Index from 1926 to 1970, the Dow Jones Wilshire 5000 Index from 1971 to April 22, 2005, and the MSCI US Broad Market Index thereafter. Returns for bonds are based on the Standard & Poor’s High Grade Corporate Index from 1926 to 1968, the Citigroup High Grade Index from 1969 to 1972, the Lehman Long-Term A Corporate Index from 1973 to 1975, and the Barclays U.S. Aggregate Bond Index thereafter. Returns for short-term reserves are based on the Citigroup 3-Month Treasury Bill Index.
Results are hypothetical and do not represent the return on any particular investment.
Source: The Vanguard Group.