Vanguard’s USD22.8bn Vanguard Dividend Appreciation Index Fund is now offering Admiral Shares, expanding to 84 the number of Vanguard funds that offer these ultra-low-cost shares.
The estimated expense ratio for Admiral Shares of the Dividend Appreciation Index Fund is 0.10 per cent, which is less than one-tenth of the 1.15 per cent expense ratio of the average large-cap core fund.
Vanguard chief executive Bill McNabb says the increased availability of Admiral Shares has helped bring down the cost of investing for millions of Vanguard shareholders.
“With Admiral Shares, investors are paying mutual fund fees that are among the lowest available,” he says. “Making this share class an option for more than half of our fund family demonstrates our commitment to reducing the cost of investing for our clients whenever possible.”
More than USD700bn – about one-third of Vanguard’s more than USD2.4trn in US fund assets under management – is currently held in Admiral Shares.
Vanguard introduced Admiral Shares in November 2000 to recognise and encourage the cost savings associated with large and long-tenured accounts by passing along these savings to shareholders in the form of lower fund expense ratios. Currently, 50 index funds and 34 actively managed funds offer Admiral Shares. The Admiral Shares of Vanguard’s largest fund, the USD296.3bn Vanguard Total Stock Market Index Fund, have an expense ratio of 0.05 per cent.
In October 2013, Vanguard expanded and simplified its share class line-up, making Admiral Shares available to more individual, advisor, and institutional clients. To qualify for Admiral Shares of Vanguard Dividend Appreciation Index Fund, retail investors are subject to a USD10,000 minimum investment requirement; advisors and institutions are not subject to a minimum.
