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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

#151

Post by phil21 »

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…

Thanks for the reminder to move some old IRA accounts they dumped onto some random provider to Fidelity.

Horrible move on their part, if I didn't want some provider diversification I'd just move everything over entirely at this point.

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

#152

Post by gruez »

toast0 wrote: post #59
kasey_junk wrote: post #51

Earlier quoted context omitted.

That’s not front running! Front running requires a fiduciary obligation to who you are trading on behalf of.

Investopedia disagrees: > A form of front-running in index funds is common and isn't illegal. > Index funds track a financial index by mirroring the index's portfolio. The composition of the index changes periodically to balance it accurately as the stocks that make it up change dramatically in price or as stocks are added or removed from the index. That forces the fund's managers to buy or sell some components of th…

If we use that expansive definition of "front running", is it "front running" if I buy stocks trying to squeeze short sellers? What about if I thought people would buy/sell telsa stocks because of musk's role in the culture wars, and tried to get ahead of that? Is "front running" just buying low and selling high?

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

#153

Post by silisili »

nothercastle wrote: post #137
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…

It’s hard to beat Fidelitys offer right now. They give you a 2-3% checking account. A 2% cash back credit card, access to their low cost funds and a decent enough website. All in one place. Other brokerages are better at their niche but the fidelity package is quite competitive

Fidelity has great features, but is hamstrung by their awful execution.

The app is clunky, slow, and looks like something from the 90s. Just logging in takes an average of 10-15 seconds. The credit card is serviced by Elan, who is awful, but aside from that, the UX is abysmal. It feels like it redirects no less than 8 times to get to the credit card page. My phone won't even load it, so I have to do it on my computer.

It's so frustrating to me because I feel like they're 90% of the way there and just need a bit of UX work. But I've had that feeling for years now, with no real progress made, so am slowly moving away. If you don't touch your money often, it's probably fine - great even, but it became too frustrating for me in the end as an everyday use account.

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

#154

Post by yellowstuff »

kasey_junk wrote: post #15
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…

Front running is illegal.

There's a lot of confused comments on this thread. "Front running" in the strictest sense means illegal trading that involves taking advantage of trades that you know will happen and you have a responsibility not to exploit. "Front running" is also used informally to mean legally trading prior to trades that you anticipate happening. Studying the rules of an index and buy a stock just before its added to the index and index funds are required to buy it is "front running" in the second sense.

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

#155

Post by nothercastle »

BobaFloutist wrote: post #146
nothercastle wrote: post #139

Earlier quoted context omitted.

The illegal 1.5 is always the optimal game theory choice because the chance of getting caught is not 100%

To use an absurd example just to make it incredibly obvious why what you said doesn't make sense, would that hold up if the fine if caught was $10 trillion dollars?

Then shareholders would demand executives have skin in the game and suffer if a company got the death penalty like you describe. Would likely lead to a much better world. Golden parachutes would not be a thing if shareholders got liquidated like that.

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

#156

Post by phil21 »

wbl wrote: post #145
bombcar wrote: post #98

Earlier quoted context omitted.

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…

Vanguard is still offering IRAs last I checked.

It's not clear to me exactly what they have moved, but two of my (very old) Simple IRA accounts got forcefully moved without my approval, and a 401k rollover into a self-managed IRA is still around. Not sure what the difference was exactly.

https://www.ascensus.com/about-us/press-room/news/ascensus-t...

This post was a reminder to get those moved out of Ascensus into Fidelity if possible.

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

#157

Post by feoren »

londons_explore wrote: post #32
Gshaheen wrote: post #17

Earlier quoted context omitted.

One other differentiation that Vanguard has is that it is owned by the fund holders “Vanguard set out in 1975 under a radical ownership structure. Our company is owned by its funds, which in turn are owned by Vanguard’s fund shareholders. We focus on meeting the investment needs of our clients.” So in short, vanguard is customer-owned, where fidelity is owned by mostly the founding family (the Johnson’s). https://cor…

But does that structure confer any realistic chance of voting control by any real humans who aren't already employed by vanguard? Funds aren't known for being voting activists.

Would you rather be a dairy cow on a farm owned collectively by the dairy cows, or owned by one billionaire family? Is it that hard to see how that's immediately a huge positive even if you can't identify individual instances of the billionaire abusing their position?

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

#158

Post by pinkmuffinere »

guntars wrote: post #110
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…

With 7% interest it’s over 200k.

Sure but that’s an order of magnitude above the numbers the parent is comparing? A 7% fee is certainly crazy, agreed with you there

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

#159

Post by nothercastle »

silisili wrote: post #153
nothercastle wrote: post #137

Earlier quoted context omitted.

It’s hard to beat Fidelitys offer right now. They give you a 2-3% checking account. A 2% cash back credit card, access to their low cost funds and a decent enough website. All in one place. Other brokerages are better at their niche but the fidelity package is quite competitive

Fidelity has great features, but is hamstrung by their awful execution. The app is clunky, slow, and looks like something from the 90s. Just logging in takes an average of 10-15 seconds. The credit card is serviced by Elan, who is awful, but aside from that, the UX is abysmal. It feels like it redirects no less than 8 times to get to the credit card page. My phone won't even load it, so I have to do it on my computer…

Good to know that Elan services the card and is terrible. I’ll avoid

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

#160

Post by frognumber »

pinkmuffinere wrote: post #158
guntars wrote: post #110

Earlier quoted context omitted.

With 7% interest it’s over 200k.

Sure but that’s an order of magnitude above the numbers the parent is comparing? A 7% fee is certainly crazy, agreed with you there

guntars did the amortization on $25k growing with interest (not fees). In other words, the claim is that 0.5% can be significant. Which is true.

When I did the math with my life savings, 0.5% was about the breakpoint where things become significant. $200k would be more significant, so I suspect when I did the math properly, I was expecting to retire in less than 50 years. In 50 years, I'll likely be dead.

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