A new Morningstar article points out that between December 2016 and December 2025, Vanguard investors contributed about $2 trillion in net investment flows, while also gaining $5 trillion in market appreciation (income and gains). They listed two major reasons for this result.
- Stock returns averaged 12.6% a year annualized. On an asset-weighted basis, Vanguard’s equity funds returned 12.6% per year over the decade ending 12/31/2025.
- Vanguard investors mostly bought and held during this time, allowing them to capture the vast majority of the overall gains, more so than other fund families. Morningstar tracks something called the “timing gap”, which measures how the timing and size of investor trading affects their actual return vs. the overall fund returns. Vanguard investors don’t time the market very much.
I would also add a reminder about a third reason:
- Vanguard continues to not only offer low costs but encourage them across their platform, allowing investors to keep more of the market’s return. There are many new products out there (sometimes called “Boomer Candy” but really just “candy” for everyone) that dangle appealing features: Aggressive covered-call ETFs for high-income, buffer ETFs for downside protection, leveraged ETFs for boosted returns. These all have a common feature: much higher fees and lower expected long-term returns! Vanguard offers none of these products. That’s not an accident!
Here are historical average expense ratios, as of December 31, 2025 (source: ):
Vanguard isn’t perfect, but they are “staying the course” with enough of their core values that I am still keeping the majority of my assets with them.
Side note: In the M* article was a disclosure that back in February 2026, Morningstar bought the Center for Research in Security Prices (CRSP) from the University of Chicago. CRSP created many super low-cost indexes so that Vanguard could offer index funds at rock-bottom prices, not having to pay higher fee to track similar things like the S&P 500 index. CRSP indexes are why the Vanguard Total US Stock fund and similar are so cheap. Morningstar is a for-profit company, so that is a possible concern.
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