In yet another aggressive move, Vanguard has announced that they're reducing the minimum amount required to qualify for Admiral shares. Admiral shares are a separate share class included for more than 50 funds that hold the same investments as the investor shares, but charge significantly lower expenses - typically about the same as the ETF class (in some cases even lower though). The minimums are now as follows:
$10,000 for most broad-market index funds;
$50,000 for actively managed funds
Previously, to qualify for this share class required a $100,000 investment, so this is quite a substantial change. This move makes sense in light of the fact that Vanguard ETFs now trade commission free through VBS, so those with smaller investments could previously get a lower expense by converting to the ETF class without any tax ramifications (due to Vanguard's unique fund/ETF structure). Now, that conversion may not be necessary since one can acquire Admiral shares for basically the same cost as the ETF. You can easily change the share class of your funds online by clicking on "Convert an Account" on the righthand side. The cost basis information from your investor shares are transferred automatically, so you don't have to worry about tax ramifications.
Vanguard's mutual funds may be more appealing than ETFs to those who want to set up an automatic investing plan, don't want to place limit orders during the work day, and want to purchase at the NAV. ETFs may appeal more to those who want the flexibility of intra-day trading and large lump-sum investors.
This is great news! The brokerage firms have really been pushing each other to improve their offerings with aggressive cost-cutting measures in the last couple years. In the end, it's the individual investor who wins.