Hey, thanks, Vanguard

I received the following letter from The Vanguard Group last Friday.  The first three paragraphs are quoted below.

As the only client-owned mutual fund company, we’re always looking for ways to pass cost savings on to you.  That’s why I’m pleased to let you know that one or more of your Vanguard funds now qualify to be promoted to Admiral Shares, a separate, lower-cost share class of your existing funds.  These lower-cost shares are available exclusively to investors who hold a minimum of $10,000 in certain broad-market index funds, $50,000 in certain actively managed funds, or $100,000 in certain sector index funds.  Nearly 75 funds now offer Admiral Shares, including six stock index funds that just added Admiral Shares in September.

Your savings from Admiral Shares could really add up

By switching from Investor Shares to Admiral Shares, you’ll remain invested in the same funds you’re in now, but you’ll enjoy much lower expense ratios, leaving you more money to invest-an advantage that can compound over time.  Note that promotions from Investor Shares to Admiral Shares of the same fund are tax-free.

For example, if you invest $50,000 in a fund’s Admiral Shares with a 0.07% expense ratio instead of its Investor Shares, with a 0.18% expense ratio, you could save approximately $1,200 more in your account over a ten-year period, assuming an average annual return of 8%.  (This hypothetical example doesn’t represent any particular investment.  Actual savings for your specific funds may be higher or lower.)

Boy, that’s sweet!  And I don’t have to do anything.  Vanguard will automatically transfer my funds from Investor Shares to Admiral Shares and the expenses charged will be a rock bottom 0.07% (hey, that’s the rock bottom rate of savings at a lot of banks – and that sucks!). 

 I selected Vanguard years ago thanks to Eric Tyson’s Personal Finance for Dummies and Bob Brinker’s Money Talk (radio program).  One of the wisest financial decisions I have ever made.  And that decision continues to pay dividends.

If you are looking for a mutual fund company to invest with, consider Vanguard.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: