IsVanguardengaged in a fee war in the mutual fund space? Not according to Vanguard ChairmanBill McNabb.

In fact, in hiscommentary, McNabb said that his firm has been lowering the cost on its products for more than 35 years and the fact that the firm exists “puts pressure on other providers to do likewise”.

“So despite the claims of some, we feel strongly that running an investment firm at-cost—where we provide the services it takes to run the funds and support our clients for the same cost we pay to do it—is a great thing for all investors,” he said.

Going forward, McNabb said that the firm will continue to look for ways to save its investors even more money across all of its funds and services.

Also, Vanguardannouncedlast month plans to change benchmarks for 22 index funds. McNabb noted that the “troubling trend” of benchmark providers charging increasingly higher fees to mutual fund firms (like Vanguard) is on the rise, resulting in a greater portion of firms’ investment dollars going toward index licensing fees.

Therefore, he said Vanguard saw an opportunity to reverse that trend for its investors, saving them “many millions of dollars” over the long run.

McNabb further explained that the firm has a long history of shaking things up, particularly in the index fund world. “When we introduced the first index fund for individual investors back in 1976, it was viewed by many as a curiosity—or even a foolish idea. But through the years, we pioneered many index "firsts" that would later become widely adopted (the first bond index fund, the first international stock index fund, the first balanced index fund, and others),” he said.

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