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

Post by boglethemind » Tue, Feb 04, 2025, 5:44 PM UTC

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…

Post by coldpie » Tue, Feb 04, 2025, 5:46 PM UTC

syspec wrote: post #57

Someone correct my math here, but if they have 10 trillion in assets under management and the management fee is 0.07% then that's still 7,000,000,000 or 7 billion in fees every year? Not bad

Post by wbl » Tue, Feb 04, 2025, 5:48 PM UTC

bombcar wrote: post #98

wing-_-nuts wrote: post #7

Earlier quoted context omitted.

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…

Fidelity uses those funds as marketing, and they make up for it with all the other services and funds they offer. It's intentional, and it's working. Vanguard is more and more becoming a group that just wants to run ETFs and if you want to use them, they're making it harder and harder. They recently dumped all their 401(k) and similar plans from being in-house to some other provider. Saves costs, makes support annoyi…

Post by ardit33 » Tue, Feb 04, 2025, 5:52 PM UTC

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…

Post by wbl » Tue, Feb 04, 2025, 5:56 PM UTC

toast0 wrote: post #96

latchkey wrote: post #85

Earlier quoted context omitted.

So then why reduce fees now? Why not years ago? Are they just suddenly feeling that generous?

Vanguard has been reducing fees on a pretty regular basis. My assumption is that the corporate leaders go for a dip in the McDuck money pond every year, and when the level is too high that it risks overflowing, they adjust the fees down.