Admiral shares at Vanguard have lower minimum balance requirements!
This is great news for all the investors at Vanguard, since the admiral shares have a lower expense ratio, which means you’ll keep more of your money in your own pocket.
Lower Minimums for Vanguard Admiral Funds
Vanguard lowered the minimum per fund for the admiral funds from $100,000 to $10,000 last week. The new minimum is for most of the index funds; actively managed admiral funds will now have a $50,000 minimum.
Vanguard Admiral Funds
Here are some of my favorite Vanguard index funds that we hold in our portfolio with their lower expense ratio admiral fund:
- Total Stock Market Admiral Index: 0.07%
- Vanguard 500 Admiral Index: 0.07%
- Emerging Markets Admiral Index: 0.27%
- REIT Index Admiral Shares: 0.13%
- Vanguard Total International Admiral Index (new): 0.20%
In addition, the Vanguard Total Bond Admiral Index, which we use to hold before we moved to 100 % in stocks is 0.12%. There is currently no small cap value admiral fund.
In addition, some other popular Vanguard funds (that I don’t use) that will lower their minimums to $50,000:
- Vanguard Admiral Wellington Fund: 0.23%
- Vanguard Admiral Windsor Fund: 0.20%
How to Qualify for Vanguard Admiral Shares
Unlike voyager and flagship status, which are determined on total account balances, qualifying for admiral shares is based on a per fund balance. Once you meet the $10,000 minimum, you’ll qualify.
Here’s where it might make some sense to look at your entire portfolio across your various accounts to reach the admiral fund minimums. If you have $5,000 in both the total stock market index and total bond index in both your IRA and your Roth IRA, you may want to reallocate to hold $10,000 of one admiral fund in each account, while still maintaining the same total overall asset allocation.
How to Convert to Vanguard Admiral Funds
With the new requirements, Vanguard will automatically convert your qualifying funds soon.
However, you can login to your account and select to manually convert to admiral shares Vanguard. I converted a few of our smaller funds last week with no problem.
Converting from the investor shares to the admiral shares is a tax free change.
With the changes, it may shift the index fund or etf argument more towards index funds for investors. I may be moving some of my ETFs at Schwab back to Vanguard!
I’m also considering switching some of the Vanguard ETFs in a Roth IRA for my younger family members.
I think this is a fantastic move for Vanguard investors… just one more reason I’m pleased that we moved our fidelity solo 401k to Vanguard!