Vanguard 2015 brokerage commission expense

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Mutual funds that buy and sell stock incur brokerage commissions on these transactions. This transactional cost is not included in a fund's expense ratio, but the cost is reported in a fund's annual statement of additional information to the fund prospectus. Additional fund transactions costs, such as spread costs and market impact costs can be much higher than brokerage expense, but these costs are not reported and can only be estimated.

Brokerage commission expense

The tables below provide Vanguard passive and active fund brokerage expense for 2015, both in absolute dollars and as a "commission ratio" (brokerage commission divided by average net assets). The tables are divided among index and passive tax-managed stock funds and actively managed stock funds. In 2015 passive funds brokerage expense averaged nil (range: nil to .021%), compared to active expense of 0.05% (range nil to 0.11%). [note 1] Note that the data spreadsheets below include tabs with charts providing annual Vanguard index fund commission ratios over the 1994 - 2015 period and Vanguard active fund commission ratios over the 1994 - 2015 period.

Vanguard Fund Brokerage Commission Expense (2015)
Passive Funds [1]
Fund Brokerage commission
$
Commission ratio
Pct.
Annual change
Vanguard 500 Index[note 2] $1,122,000 .000% .000%
Vanguard Dividend Appreciation Index $300,000 .001% .000%
Vanguard Extended Market Index $1,126,000 .003% .000%
Vanguard FTSE Social Index[note 3] $41,000 .003% +.002%
Vanguard Growth Index $352,000 .001% .000%
Vanguard High Yield Dividend Index $167,000 .001% .000%
Vanguard Large-Cap[note 4] $54,000 .001% +.001%
Vanguard Mid-Cap Index[note 5] $1,465,000 .002% .000%
Vanguard Mid-Cap Growth Index[note 6] $149,000 .002% +.001%
Vanguard Mid-Cap Value Index[note 7] $272,000 .004% +.002%
Vanguard REIT Index $1,872,000 .004% .000%
Vanguard Small-Cap Index $1,959,000 .004% +0.01%
Vanguard Small-Cap Growth Index $352,000 .002% -.003%
Vanguard Small-Cap Value[note 8] $673,000 .004% +.001%
Vanguard Tax-Managed Capital Appreciation $328,000 .017% -.012%
Vanguard Tax-Managed Small-Cap $732,000 .021% +.017%
Vanguard Total Stock Market Index $5,634,000 .001% .-001%
Vanguard Value Index[note 9] $294,000 .001% .000%
Vanguard Developed Market Index $1,833,000 .004% .000%
Vanguard Emerging Markets Stock Index $5,199,000 .008% -.001%
Vanguard European Stock Index[note 10] $1,188,000 .006% +.003%
Vanguard FTSE All-World ex-US Index $1,062,000 .004% .000%
Vanguard FTSE All-World ex-US Small Cap [note 11] $252,000 .009% -.003%
Vanguard Global ex-US Real Estate[note 12] $400,000 .012% -.005%
Vanguard Pacific Stock Index[note 13] $370,000 .007% +.005%
Vanguard Total International Stock Index:[note 14] $20,237,000 .013% +.005%
Vanguard Total World Stock Index[note 15] $257,000 .004% -.013%


Vanguard Fund Brokerage Commission Expense (2015)
Active Funds [1]
Fund Brokerage commission
$
Commission ratio
Pct.
Annual change
Vanguard Capital Opportunity $1,332,000 0.01% 0.00%
Vanguard Capital Value $1,424,000 0.10% 0.00%
Vanguard Dividend Growth $2,043,000 0.10% +0.09%
Vanguard Energy[note 16] $5,408,000 0.04% +0.01%
Vanguard Equity Income $2,286,000 0.01% 0.00%
Vanguard Explorer $11,042,000 0.09% 0.00%
Vanguard Explorer Value $314,000 0.10% -0.01%
Vanguard Growth & Income $825,000 0.01% 0.00%
Vanguard Health Care $6,118,000 0.02% 0.00%
Vanguard Mid Cap Growth $4,208,000 0.11% 0.00%
Vanguard Morgan Growth $1,996,000 0.02% -0.01%
Vanguard Precious Metals & Mining $2,480,000 0.10% +0.03%
Vanguard Primecap Core $1,021,000 0.01% -0.01%
Vanguard Primecap $5,367,000 0.01% 0.0%
Vanguard Selected Value $3,432,000 0.01% -0.02%
Vanguard Strategic Equity $528,000 0.03% 0.00%
Vanguard Strategic Small Cap[note 17] $182,000 0.1% +.01%
Vanguard U.S. Growth $1,159,000 0.01% 0.00%
Vanguard U.S. Value $100,000 0.00% 0.00%
Vanguard Windsor $4,538,000 0.03% -0.01%
Vanguard Windsor ll $15,297,000 0.03% 0.00%
Vanguard Emerging Market Select Stock $357,000 0.10% -0.07%
Vanguard Global Equity $1,787,000 0.10% +0.05%
Vanguard Global Minimum Volatility[note 18] $359,000 0.04% -0.01%
Vanguard International Explorer $2,372,000 0.09% -0.02%
Vanguard International Growth $10,415,000 0.05% +0.01%
Vanguard International Value $5,031,000 0.06% -0.01%

Balanced funds and fund of funds

Main article: Balanced fund

Balanced mutual funds which buy and sell individual stocks pay brokerage commissions on the stock portion of the portfolio. A fund of funds does not ordinarily pay brokerage commissions on its buys and sells of the underlying mutual fund portfolios; but a fund of funds does incur brokerage expense for its purchases or sales of an ETF. Balanced fund commission expense in 2015 was very low (ranging from nil to .020%). Keep in mind that a fund of funds will also bear the commission brokerage costs of the underlying portfolios.

Vanguard balanced fund of funds include the series of Lifestrategy funds; the series of target retirement funds; the of Managed Payout fund; and the STAR fund. The majority of Vanguard balanced funds are indexed, or mostly indexed. Active balanced funds include the STAR, Wellesley, and Wellington funds.


Vanguard Fund Brokerage Commission Expense (2015)
Balanced Funds [1]
Fund Brokerage commission
$
Commission ratio
Pct.
Annual change
Vanguard Balanced Index[note 19] $351,000 .001% .000%
Vanguard LifeStrategy Conservative $0 .000% .000%
Vanguard LifeStrategy Growth $0 .000% .000%
Vanguard LifeStrategy Income $0 .000% .000%
Vanguard LifeStrategy Moderate $0 .000% .000%
Vanguard Managed Payout Fund $49,000 .003% -.001%
Vanguard STAR $0 .000% .000%
Vanguard Target Retirement 2010 $999 .000% .000%
Vanguard Target Retirement 2015 $3000 .000% .000%
Vanguard Target Retirement 2020[note 20] $17,000 .000% .000%
Vanguard Target Retirement 2025[note 21] $17,000 .000% .000%
Vanguard Target Retirement 2030[note 22] $10,000 .000% .000%
Vanguard Target Retirement 2035[note 23] $130.000 .001% +.001%
Vanguard Target Retirement 2040 $999 .000% .000%
Vanguard Target Retirement 2045 $999 .000% .000%
Vanguard Target Retirement 2050 $999 .000% .000%
Vanguard Target Retirement 2055 $2000 .000% .000%
Vanguard Target Retirement 2060 $0 .000% .000%
Vanguard Target Retirement Income $999 .000% .000%
Vanguard Tax- Managed Balanced $18,000 .001% .000%
Vanguard Wellesley $2,861,000 .007% .001%
Vanguard Wellington $17,582,000 .020% +.008%

Factors determining brokerage expense

Vanguard provides notes in the statement of additional information that attribute reasons behind higher and lower levels of brokerage expense for a given fund[/s]. Factors can include:

  • An increase or decrease in fund turnover;
  • An increase in shareholder flows into or out of the portfolio
  • An increase or decrease in market volatility.

A new fund, with low net assets, will often have a higher than average "commission ratio" than similar funds with higher asset bases.

Data spreadsheets

Multiple year brokerage expense data is available in the spreadsheet tables below.

Passive table

(View Google Spreadsheet in browser, then File --> Download as to download the file.)
Active table

(View Google Spreadsheet in browser, then File --> Download as to download the file.)
Balanced table

(View Google Spreadsheet in browser, then File --> Download as to download the file.)

Notes

  1. Chart: Average Commission Expense Ratio

    google drive spreadsheet
  2. Vanguard 500 Index: Increased trading activity as the result of positive cash flow resulted in higher brokerage commissions for the most recent fiscal year.
  3. Vanguard FTSE Social Index:The changes in brokerage commissions in the Fund’s most recent fiscal years are the result of changes in portfolio turnover. The Fund’s turnover rate will vary as stocks pass or fail the social screening polices employed by the benchmark index, resulting in changes to the stocks that make up the benchmark index.
  4. Vanguard Large Cap Index: Increased trading activity as the result of positive cash flow resulted in higher brokerage commissions for the most recent fiscal year.
  5. Vanguard Mid-Cap Index: Increased trading activity as the result of positive cash flow resulted in higher brokerage commissions for the most recent fiscal year.
  6. Vanguard Mid-Cap Growth Index: Increased trading activity as the result of positive cash flow resulted in higher brokerage commissions for the most recent fiscal year.
  7. Vanguard Mid-Cap Value Index: Increased trading activity as the result of positive cash flow resulted in higher brokerage commissions for the most recent fiscal year.
  8. Vanguard Small-Cap Value Index: Increased trading activity as the result of positive cash flow resulted in higher brokerage commissions for the most recent fiscal year.
  9. Vanguard Value Index:Increased trading activity as the result of positive cash flow resulted in higher brokerage commissions for the most recent fiscal year.
  10. Vanguard European Index:Portfolio rebalancing in response to the benchmark index change for the Fund resulted in an increase in brokerage commissions for the Fund during the fiscal year ended October 31, 2015.
  11. Vanguard FTSE All-World-ex US:Portfolio turnover and cash flows into the Fund, which impact the frequency of the Fund’s portfolio transactions, were factors during the Fund’s recent fiscal years and resulted in higher or lower brokerage commissions.
  12. Vanguard Global-ex US-Real Estate:Portfolio turnover and cash flows into the Fund, which impact the frequency of the Fund’s portfolio transactions, were factors during the Fund’s recent fiscal years and resulted in higher or lower brokerage commissions.
  13. Vanguard Pacific Stock Index:Portfolio rebalancing in response to the benchmark index change for the Fund resulted in an increase in brokerage commissions for the Fund during the fiscal year ended October 31, 2015.
  14. Vanguard Total International Stock Index:The increase of international equity exposure by certain Vanguard funds of funds in 2015 contributed to an increase in portfolio transactions and resulted in higher brokerage commissions for the Fund during to fiscal year ended October 31, 2015.
  15. Vanguard Total World:Portfolio turnover and cash flows into the Fund, which impact the frequency of the Fund’s portfolio transactions, were factors during the Fund’s recent fiscal years and resulted in higher or lower brokerage commissions.
  16. Vanguard Energy:An increase in trading activity due to changing market conditions resulted in a higher level of turnover, which caused an increase in brokerage commissions for the Fund during the fiscal year ended January 31, 2015.
  17. Vanguard Strategic Small Cap: Higher brokerage commissions paid during the fiscal year ended September 30, 2015, were a result of an increase in traded dollars by brokers acting as agent relative to transactions made on a principal basis.
  18. Vanguard Global Minimum Volatility: Increased trading activity as the result of large positive cash flow resulted in higher brokerage commissions for the most recent fiscal year.
  19. Vanguard Balanced Index:The brokerage commissions paid by the Fund during the past two fiscal years have increased proportionately with the growth of the Fund.
  20. Vanguard Target Retirement 2020:In 2015, the Fund increased its target international equity and international bond exposure. The reallocation of assets to meet the target allocation resulted in higher brokerage commissions for the fiscal year ended.
  21. Vanguard Target Retirement 2025:In 2015, the Fund increased its target international equity and international bond exposure. The reallocation of assets to meet the target allocation resulted in higher brokerage commissions for the fiscal year ended.
  22. Vanguard Target Retirement 2030:In 2015, the Fund increased its target international equity and international bond exposure. The reallocation of assets to meet the target allocation resulted in higher brokerage commissions for the fiscal year ended.
  23. Vanguard Target Retirement 2030:In 2015, the Fund increased its target international equity and international bond exposure. The reallocation of assets to meet the target allocation resulted in higher brokerage commissions for the fiscal year ended.

See also

References

  1. 1.0 1.1 1.2 Data sources: EDGAR, commission data from statements of additional information forms 485BPOS; average net asset data from forms NSAR.