Vanguard Gives Loyal Fat Cats a Discount on Its Funds

The cheapest stock funds out there will soon be a little bit cheaper for buy-and-hold types with big balances.

On Wednesday Vanguard, the $570 billion fund titan best known for its ultra-cheap index funds, announced its plan to start launching a new and even-cheaper "Admiral" share class in the fourth quarter. The shares will be for investors with big and/or long-term stakes in Vanguard funds.

The move rewards moneyed and loyal shareholders -- the most lucrative fish in the mutual fund pool. One Vanguard watcher says it's also a public relations maneuver at a time when exchange-traded funds and a host of other new options for fund investors have made competition for new dollars tougher. ...