Vanguard has a policy of returning 100% of after expense security lending income to its mutual funds that lend securities. The Statement of Additional Information to a fund prospectus itemizes security lending income and expenses so that the net percentage of gross security lending can be determined.
The following table provides 2017 fiscal year gross income, aggregate expenses, net income and the percentage of income figures for the security lending income earned by Vanguard index funds.
For US stock index funds, the dominant expense items are administrative fees and rebates to borrowers. For international funds the dominant expense items are revenue split fees to the security lending agent, administrative fees and rebates to borrowers.
In aggregate, Vanguard index fund security lending returned 90.38% of gross security lending income to the funds. The percentage return ranged from a low of 59.98% for the Value Index Fund to 94.07% for the Extended Market Index Fund.
Vanguard index fund security lending (2017)
|FTSE all ex US||16,940,984||1,800,989||15,139,995||89.37%|
|FTSE all ex US small||12,969,731||1,087,440||11,882,291||91.62%|
|Global ex US real estate||5,037,305||459,498||4,577,807||90.88%|
Data derived from Statement of Additional Information segments of 2017 fund prospectuses.