Our unwavering commitment to you

An open letter to investors

May 01, 2026 Salim Ramji Chief Executive Officer of Vanguard

Vanguard investors are the "smart money" Stronger discipline, lower costs, and better performance Extending The Vanguard Effect into fixed income, savings, and advice Improving your experience and expanding your choice A revolutionary zeal for investors My fellow Vanguard investor-owners, The past year had more than its fair share of uncertainty—in markets, in the economy, and for many, in your household finances. But at least one thing remained steadfast: Vanguard is your firm. You are our owners, and Vanguard is unambiguously on your side, focused on your long‑term success.1 I wrote to you last May to mark Vanguard’s 50th anniversary. This year, I am writing to welcome millions of new investor-owners to Vanguard, to highlight the resilience of your disciplined approach, and to share our progress on our mission to give you the best chance for investment success.

Markets performed well this past year, but not without bouts of uncertainty, volatility, and temptation. Yet, you did something hopeful, hard, and wise: You stayed true to your investment principles. While I am of course biased, I believe your focus on goals, balance, discipline, and cost distinguished you as the ultimate smart money investors.

Clear goals anchor decisions when markets are full of sound and fury. Even as inflation and higher rates put pressure on household budgets, 45% of investors in Vanguard 401(k) plans increased their contribution rate, and most others held their contributions steady.2 As a result, the average rate of retirement savings in Vanguard plans rose to an all‑time high of 12% of income.3 In aggregate, you invested record levels of net new assets with Vanguard as you saw opportunities to get closer to your longer-term goals.

In 1976, Jack Bogle launched the first index fund for individual investors, now known as the Vanguard 500 Index Fund, taking the first step toward making diversified, tax-efficient investing accessible to millions. Had you invested $10,000 in the fund back then, it would be worth roughly $2 million today.4 Fifty years later, you continue to follow Bogle’s maxim to “buy the haystack,” with the greater choice we now offer across our stock, bond, and balanced funds. Last year, for example, you put roughly half of your new investments into fixed income, adding diversity to your portfolios. Many of you—including those who rely on us for advice and those who invest in our Target Retirement Funds—also benefited from diversification across global markets.

While all major asset classes delivered positive returns in 2025, market fluctuations felt much more choppy in any given week, including recently. Into this mix, the siren songs of speculation grew louder, providing ample opportunity for investors to flinch. You stayed the course and stayed invested, a time-tested way to build wealth for the long term. During tariff‑related volatility last April, 93% of Vanguard investors chose patience over panic and kept their portfolios unchanged. Among those who did trade, you chose to invest more rather than pull back by a factor of 5:1. This year, in the wake of stock, bond, and energy price volatility resulting from conflict in the Middle East, your steady, buy-and-hold behavior mirrored that of years past.

As we announced in February, we lowered fees again, trimming our average annual fund operating cost to 0.06%, or $6 per $10,000 invested. The rest of the fund industry still charges an average of 0.44%, pocketing more than seven times our fees.5 Combined with the fee cuts we announced in 2025, that’s an estimated $600 million dollars of savings for investors that will compound over time.6 Fee cuts are one way in which you, as owners, participate in our growing economies of scale. We are also making record levels of investment in our client experience as outlined later in this letter.

Lower fees reflect our belief that in investing you get what you don’t pay for. Costs matter, not just because of what you save but also in the performance of your funds. Low fees and strong performance aren’t opposites—they go together, as shown in the chart below. Morningstar recently estimated that Vanguard investors benefited from “nearly $5 trillion of income and gains” over the last decade, thanks largely to disciplined investing on your part that allowed you to “participate more fully” in your funds’ returns.7 Over the ten years ended March 31, 2026, the overwhelming majority of Vanguard funds outperformed their peer‑group averages. These strong results reflect our low operating costs, the expertise of our index and active portfolio managers, and your discipline in staying invested for the long term.

Ten years ended March 31, 2026 Sources: Vanguard calculations, based on data from LSEG Lipper and Morningstar.

We take pride in what we have helped you achieve with your investments, but we find purpose in finding additional areas where we can extend “The Vanguard Effect” to improve the quality of what the asset and wealth management industry offers while lowering the price and increasing access. We have been focused on three areas where we saw meaningful opportunity to improve your chances of investment success: getting better performance from your fixed income investments—particularly active fixed income; earning better yields from your cash savings; and increasing the accessibility, quality, and personalization of advice and guidance especially when aided by AI.

Fixed income is a critical part of your portfolio, providing stability and income that becomes more important as you approach retirement. Fixed income markets are also complex and inefficient, providing opportunities for active management to outperform. But for too long, Wall Street has been selling a narrative that to get the outperformance that active fixed income can deliver, investors need to pay much higher fees—exactly when retirees can least afford them. It’s a false dichotomy. We charge an average of 10 basis points for active fixed income management, while our peers charge four times that.9 Lower fees are a reason for our outperformance, because having a lower fee threshold allows our portfolio managers to be more disciplined about risk and generate better long-term outcomes. Case in point: 86% of Vanguard’s active fixed income funds have outperformed peers over the past decade, and 100% of them are priced in the lowest cost decile.10