Vanguard Cuts 529 Plan Expenses

November 9, 2006 ( -The Vanguard 529 College Savings Plan will reduce expenses across its lineup of investment options by 10 to 12 basis points, resulting in an annual participant savings of more than $2 million.

A Vanguard news release said that the cost reductions, which are effective December 1, 2006, will bring the all-in costs of 11 of the plan’s 22 investment choices to 0.50%. The plan is sponsored by the State of Nevada.

The all-in costs of two index portfolios – Vanguard 500 Index Portfolio and Vanguard Total Stock Market Index Portfolio – will decline 12 basis points to 0.50%. All remaining investment choices will decline 10 basis points, resulting in an investment lineup with expense ratios of 0.50% to 0.70%.

Also, the plan is also adding three actively managed portfolios to its lineup and closing one portfolio, bringing its total offerings to 22. The new portfolios are:  

  • Vanguard Windsor Portfolio
  • Vanguard Morgan Growth Portfolio, and
  • Vanguard STAR Portfolio.

Vanguard Balanced Index Portfolio will be closed and its assets will be transferred to the Vanguard Moderate Growth Portfolio, according to the announcement.

In addition, the asset allocation models of several offerings will change to provide increased exposure to equities over a longer period of time. The plan’s equity-oriented portfolios will also increase their exposure to international stocks by 5%.