News Column

Vanguard 529 College Savings Plan Passes Considerable Cost Savings to Investors for the Seventh Time

September 3, 2014

VALLEY FORGE, Pa.--(BUSINESS WIRE)-- Vanguard today announced expense ratio reductions on investments in The Vanguard 529 College Savings Plan, saving an estimated $2 million per year for the plan’s more than 250,000 beneficiaries. This is the seventh time that the plan, one of the largest plans available to college-oriented investors, has reduced costs since its introduction in 2002 and the second time in the past 12 months.

The reductions, which took effect on September 1, extend to all of the plan’s investment options, including its three popular age-based options, which experienced expense reductions from 0.21% to 0.19%. The plan’s 19 individual actively managed and index portfolios feature lower expenses now ranging from 0.19% to 0.49% (see accompanying chart).

“Vanguard is committed to providing a low-cost way to help investors save for the increasing cost of higher education,” said Daniel Reyes, principal and head of Vanguard’s Education Savings Group. “In addition to the plan’s low costs, The Vanguard 529 offers a broad range of investment options and significant tax advantages.”*

Vanguard partners with the State of Nevada as the plan sponsor and Ascensus Broker Dealer Services, Inc. as the program manager to make the Vanguard 529 Plan available to all investors in the United States. With approximately $10.3 billion in assets, the plan is the third largest 529 plan and the second largest direct-sold 529 plan in the country.

Vanguard is the largest 529 asset manager in the United States with nearly $58 billion in college savings assets across 29 college savings plans and five prepaid tuition plans in 30 states. Vanguard has been a leader in the 529 industry for nearly 15 years, offering low-cost investment management expertise and a broad range of age-based, index, and actively managed investment options.

     

Fee Reductions

           
Investment Options   Former Expense Ratio   New Expense Ratio   Savings (bps)
Age-Based Options            
Vanguard Aggressive Option   0.21%   0.19%   0.02%
Vanguard Moderate Option   0.21%   0.19%   0.02%
Vanguard Conservative Option   0.21%   0.19%   0.02%
Individual Portfolios            
Vanguard Total Stock Market Index   0.23%   0.21%   0.02%
Vanguard 500 Index   0.23%   0.21%   0.02%
Vanguard Total Bond Market Index   0.26%   0.24%   0.02%
Vanguard Growth Index   0.29%   0.28%   0.01%
Vanguard Value Index   0.29%   0.28%   0.01%
Vanguard Mid-Cap Index   0.27%   0.26%   0.01%
Vanguard Small-Cap Index   0.27%   0.26%   0.01%
Vanguard Inflation-Protected Securities   0.28%   0.27%   0.01%
Vanguard High-Yield Bond   0.35%   0.34%   0.01%
Vanguard Windsor   0.50%   0.46%   0.04%
Vanguard Morgan Growth   0.48%   0.47%   0.01%
Vanguard Total International Stock Index   0.39%   0.37%   0.02%
Vanguard STAR   0.50%   0.49%   0.01%
Vanguard Income   0.21%   0.19%   0.02%
Vanguard Growth   0.21%   0.19%   0.02%
Vanguard Aggressive Growth   0.21%   0.19%   0.02%
Vanguard Moderate Growth   0.21%   0.19%   0.02%
Vanguard Conservative Growth   0.21%   0.19%   0.02%
Vanguard Interest Accumulation   0.21%   0.19%   0.02%
 


About Vanguard

Vanguard, headquartered in Valley Forge, Pennsylvania, is one of the world’s largest investment management companies. Vanguard manages nearly $2.7 trillion in U.S. mutual fund assets, including more than $384 billion in ETF assets. The firm offers more than 160 index and actively managed funds to U.S. investors and more than 120 additional funds in non-U.S. markets. For more information, visit vanguard.com.

All asset figures are as of July 31, 2014, unless otherwise noted.

*Please see Program Description for more information.

For more information about Vanguard funds and ETFs, visit vanguard.com or call 800-662-7447 to obtain a prospectus. Investment objectives, risks, charges, expenses, and other important information about a fund are contained in the prospectus; read and consider it carefully before investing.

For more information about The Vanguard 529 College Savings Plan, call 866-734-4530 or visit www.vanguard.com to obtain a Program Description, which includes investment objectives, risks, charges, expenses, and other information; read and consider it carefully before investing. Vanguard Marketing Corporation, Distributor and Underwriter.

If you are not a Nevada taxpayer, consider before investing whether your or the designated beneficiary’s home state offers any state tax or other benefits that are only available for investments in such state's qualified tuition program.

The Vanguard 529 College Savings Plan is a Nevada Trust administered by the Board of Trustees of the College Savings Plans of Nevada, chaired by the Nevada State Treasurer.

The Vanguard Group, Inc., serves as the Investment Manager and through its affiliate, Vanguard Marketing Corporation, markets and distributes the Plan. Ascensus Broker Dealer Services, Inc. serves as Program Manager and has overall responsibility for the day-to-day operations. The Plan’s portfolios, although they invest in Vanguard mutual funds, are not mutual funds. Investment returns are not guaranteed and you could lose money by investing in the plan.

Vanguard ETF Shares are not redeemable with the issuing Fund other than in Creation Unit aggregations. Instead, investors must buy or sell Vanguard ETF Shares in the secondary market with the assistance of a stockbroker. In doing so, the investor may incur brokerage commissions and may pay more than net asset value when buying and receive less than net asset value when selling.

All investments are subject to risk, including the possible loss of the money you invest.

Vanguard Marketing Corporation, Distributor and Underwriter.

© 2014 The Vanguard Group, Inc. All rights reserved.

U.S. Patent Nos. 6,879,964; 7,337,138; 7,720,749; 7,925,573; 8,090,646; and 8,417,623.




For more information, contact the Vanguard PR Hotline at 610-669-5002, vanguard_media_relations@vanguard.com, or @Vanguard_PR

Source: Vanguard


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