Vanguard is lowering the purchase fee on its Emerging Markets Index Fund from .50 percent to .25 percent. The reduction in the purchase fee on Vanguard's Investor, Admiral, Signal, Institutional and Institutional Plus shares  was in response to Brazil's announcement that it is eliminating a tax on foreign investments in equities and certain fixed income securities.

The elimination of this tax, which has been in place since 2009, is expected to lower the transaction costs incurred by the fund.

Unlike loads or sales commissions, purchase fees are paid directly to a fund to cover the costs of purchasing securities, including brokerage commissions and market impact costs. The fees allocate the costs of investing new cash directly to the investors making the new share purchases. Without the fees, a fund's existing shareholders would have to bear the transaction costs, and the fund could experience reduced investment performance and increased tracking error with respect to its target benchmark.