A:

Admiral Shares represent a separate class of shares in Vanguard-administered mutual funds, offering lower fees compared to the standard Investor Share class. Vanguard offers Admiral Shares across a select group of mutual funds and requires investors to have a minimum investment in a particular mutual fund.

Admiral Shares Requirements

To qualify for Admiral Shares, investors in most index funds and tax-managed funds must maintain a minimum investment of $10,000. For actively managed funds, one must have at least $50,000 invested. For sector-specific index funds, you are qualified for Admiral Shares with an investment of $100,000 or more.

Vanguard evaluates its fund accounts to identify which are eligible for Admiral Shares. If an investor's account holdings become eligible, Vanguard can convert his or her mutual fund shares into the Admiral Shares class – typically tax-free and at no cost. Investors can determine their account eligibility by logging into their Vanguard accounts.

Mutual funds offering Admiral Shares may be found through the online fund's screener on the Vanguard website. Vanguard offers Admiral Shares mutual funds with a broad palette of investment objectives and holdings, such as Treasury bonds (T-bonds), tax-exempt municipal bonds, balanced holdings, domestic stocks, and international stocks.

Admiral Shares Cost Savings

Vanguard mutual funds already have expense ratios that undercut the mutual fund industry's average by a whopping 82%, yet Admiral Shares achieve further savings on the expense ratio for qualified Vanguard mutual funds. While typical Vanguard Investor shares have an expense ratio of 0.18%, Vanguard Admiral Shares' average expense ratio comes in at a feather-weight 0.15%. The 0.03% difference may not seem like much, but on a large initial investment it can add up to a substantial amount saved over the years.

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