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I had also made a couple of posts in this thread that talks about Vanguard's unique structure --- the Mutual Fund investors collectively also make up Vanguard's ownership. Therefore why would you raise fees on yourself? They're not trying to raise profits for public shareholders nor a private management firm and so the idea is to run a good but lean operation and thus able to keep expense ratios down to razor thin levels to the benefit of Fund investors/Vanguard owners.
This is also why you have seen Vanguard continually trim expense ratios as assets rises. Over the past several years I've lost track how many times but many many of their funds have had their ERs trimmed multiple times as assets rose.
John Bogle has noted that while Vanguard's funds originally each charged fees equal to its expenses, this has changed. As I understand him, the Vanguard Group now charges fees that in the aggregate equal their costs. This allows Vanguard some flexibility in pricing, so that they can adjust to market conditions (i.e. compete against ultra low cost funds).
I suspect this doesn't amount to more than a couple of basis points one way or the other, but it does mean that owners of one fund are in a sense, and to a very small degree, subsidizing owners of other Vanguard funds.
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Regards,
Ted
http://www.kiplinger.com/printstory.php?pid=8103
This is also why you have seen Vanguard continually trim expense ratios as assets rises. Over the past several years I've lost track how many times but many many of their funds have had their ERs trimmed multiple times as assets rose.
http://www.mutualfundobserver.com/discussions-3/#/discussion/comment/28360
I suspect this doesn't amount to more than a couple of basis points one way or the other, but it does mean that owners of one fund are in a sense, and to a very small degree, subsidizing owners of other Vanguard funds.