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Vanguard's average fee is now 0.07% after biggest-ever cut

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Re: Vanguard's average fee is now 0.07% after biggest-ever cut

#121

Post by fallingknife »

wing-_-nuts wrote: post #7
ilamont wrote: post #3

Not mentioned in any of the coverage I've seen (or the interview with Vanguard's new CEO in the WSJ) is Fidelity. Fidelity used to be known for actively managed funds, but has been eating Vanguard's indexing lunch for the past 10 years or so. Part of this relates to its dominance in workplace accounts, but Vanguard hasn't helped itself with some bad customer-facing software updates and a perception that its service l…

TBH, I trust vanguard more, even if their website is absolutely worse. There's a saying, 'if you're not the customer, you're the product'. I expect trades on those index funds are getting 'front run' much like robinhood is getting front run. You might have a lower ER but your nav might effectively be higher when buying and lower when selling. Of course, I'm a 'buy and hold' investor so this doesn't really effect me m…

The pennies that they scalp off you on the trade by "front running" the order is much less cost than the annual fee if you are a long term investor.

Re: Vanguard's average fee is now 0.07% after biggest-ever cut

#122

Post by jliptzin »

wing-_-nuts wrote: post #7
ilamont wrote: post #3

Not mentioned in any of the coverage I've seen (or the interview with Vanguard's new CEO in the WSJ) is Fidelity. Fidelity used to be known for actively managed funds, but has been eating Vanguard's indexing lunch for the past 10 years or so. Part of this relates to its dominance in workplace accounts, but Vanguard hasn't helped itself with some bad customer-facing software updates and a perception that its service l…

TBH, I trust vanguard more, even if their website is absolutely worse. There's a saying, 'if you're not the customer, you're the product'. I expect trades on those index funds are getting 'front run' much like robinhood is getting front run. You might have a lower ER but your nav might effectively be higher when buying and lower when selling. Of course, I'm a 'buy and hold' investor so this doesn't really effect me m…

There’s not really much money to be made front running someone’s deposit into an index fund that’s gonna sit there for the next 40 years. It works on RH because generally those users are transacting much more frequently and in much less liquid things like options.

Re: Vanguard's average fee is now 0.07% after biggest-ever cut

#124

Post by b8 »

I switched from VTI to ITOT, because Vanguard's actions recently have been drifting away from it's founders. This inspires confidence, but I'm still wary. VTI is too expensive compared to ITOT. Fidelity doesn't have any ETFs listed on the Bogleheads website either [0].

0. https://www.bogleheads.org/wiki/Three-fund_portfolio

Re: Vanguard's average fee is now 0.07% after biggest-ever cut

#125

Post by loeg »

short_sells_poo wrote: post #48
2OEH8eoCRo0 wrote: post #18

Earlier quoted context omitted.

How do you front run a mutual fund? The price is the price.

If you know the index rules, it's fairly simple to calculate the turnover it is going to generate when it rebalances and subsequently the impact the rebalance is going to have on prices. This is a fairly well known behavior and a lot of players have been doing this for a long time. Basically every index of any significance is already being monitored and rebalancing effects are "front-run" this way. I put the word in…

This is not what "front running" means.

Re: Vanguard's average fee is now 0.07% after biggest-ever cut

#126

Post by bluGill »

latchkey wrote: post #87
recursive wrote: post #70

Earlier quoted context omitted.

And now I trust Vanguard just a little more.

I'd rather not have to "trust" any financial institution. https://www.cnbc.com/2025/01/17/vanguard-fined-more-than-100... https://asic.gov.au/about-asic/news-centre/find-a-media-rele... https://www.reuters.com/business/finance/vanguard-fined-prov...

You are likely to have to trust them eventually. SPIC insurance is $500,000. If you have more than that and it turns out instead of buying the investments you think they were a ponzi scheme that sent the money to the owners when it is discovered you get up to $500,000 of your money back, while the rest is your loss. You really should have more than that by age 40 if you want a comfortable retirement (that is todays dollars, if you are 18 now when you hit 40 inflation will have made the number bigger, while if you are 80 the number when you were 40 would have been lower)

Re: Vanguard's average fee is now 0.07% after biggest-ever cut

#127

Post by sega_sai »

cess11 wrote: post #31
sega_sai wrote: post #11

That only applies to US funds, but not in the UK ones which continue to be significantly more expensive...

My broker doesn't show fee on some of the Vanguard instruments, but e.g. the S&P 500 UCITS ETF (USD) has 0.08 % listed as fee. Which ones are you looking at?

FTSE All-World UCITS ETF (VWRP) has 0.22%

Re: Vanguard's average fee is now 0.07% after biggest-ever cut

#128

Post by giantg2 »

dcrazy wrote: post #117
giantg2 wrote: post #61

Earlier quoted context omitted.

That's because Vanguard is a buy and hold philosophy. They have previously stated that they designed their site for the bulk of the users. Those users log in just to check their balances in the 5 or fewer funds/ETFs that they hold. So instead of building something that would be reasonably easy for everyone, they built something that was easy for their primary (aging) user base. It's the same sort of mentality how the…

At some point you need to realize your gains—perhaps to rebalance a portfolio, or to pay for an expense, or because you’re retiring and now it’s time to enjoy the profits of your buying and holding. And a lot of people elect specific-lot cost basis accounting to minimize tax burden.

Supposedly they have a tax loss harvesting and "min tax" tool for that.

Re: Vanguard's average fee is now 0.07% after biggest-ever cut

#129

Post by nineplay »

Enginerrrd wrote: post #112
nineplay wrote: post #97

Earlier quoted context omitted.

The idea of making financial decisions based on UI/UX is extraordinary to me.

It is to me too! I would never do that normally. It's just that it was THAT bad. It took me MONTHS to figure out how to sell a particular fund to buy another one. Somehow every time I tried to do it, it failed. I kept coming back to it over and over and different things went wrong. It was also very difficult to figure out the status of an order. It was literally that clunky, and I've been trading for decades. I run m…

Twice I've been unsure how to move move money with their site and twice I've contacted their customer service center who was more than happy to guide me through the process.

Re: Vanguard's average fee is now 0.07% after biggest-ever cut

#130

Post by loeg »

frognumber wrote: post #104

I'll be contrarian. The general wisdom is hold the fund with the lowest fee structure. However, if the fee structure is 0.07%, that's $70/year / 100k invested. Even if it's 0.44%, you're talking about $440. The fees on most funds are small enough now to not matter much. It's worth shopping for lower-fee funds, but the more you go below 0.5%, the less it matters. If I save $500 per year for 50 years, that's $25k+inter…

I agree that minute differences don't really matter. E.g., 0.09% vs 0.07%; who cares. Differences as large as 0.5% are much more material in the long term, though.
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