Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

bloomberg.com

Post reply on HN
Print view View original

161–170 of 279 posts

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

#161

Post by toast0 »

gruez wrote: post #152
toast0 wrote: post #59

Earlier quoted context omitted.

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?

Well, let's not call a short squeeze by another name.

Otherwise, I wouldn't call those things front running, as there's no indication of imminent activity.

If a material increase in lending rates on a heavily shorted stock was announced, and you bought because you were pretty sure the shorts would be buying to close, that could be front running, yeah.

I dunno about market moves based on Elon's role in the culture wars, but maybe if he did something in particular.

In general, buy on the rumor, sell on the news could qualify as front running under this definition, but I think I'd want to narrow it a bit to working to trade ahead of perceived imminent and definite trades. Most of the illegal front running is trading ahead of specific trades in response to seeing those orders.

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

#162

Post by wil421 »

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…

At %0.07 you would lose about 2% of your total value after 30 years.[1] No thanks.

[1]https://www.bogleheads.org/wiki/How_much_do_you_lose_to_annu...

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

#164

Post by echoangle »

aantix wrote: post #163

Feels so strange that the average investor can't outperform an index fund with low management fees. A small investor is so agile - they can move in and out of positions. Why that agility can't be utilized to outperform a slow moving index fund, long-term?

Probably because no matter how agile you are, you'll never be more agile than the market. And being much slower isn't worse than being a little slower.

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

#166

Post by sgerenser »

skeuomorphism wrote: post #116
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…

> 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. If this is true, then it must…

It was only for solo 401ks and small business with less than $20M in assets.

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

#167

Post by echoangle »

coldpie wrote: post #143
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

Indeed, that is about the stated revenue on their Wikipedia page. Divided equally among their 20,000 employees, that comes to $350,000 per employee. Expenses like office space, taxes, fines/fees, inflated executive compensation, etc will bring that down quite a bit; though other sources of income will bring it back up too. Sounds reasonable.

I wonder what 20,000 Employees are doing there though. I know saying "I could do that with 10 people, what are they even doing" is a meme here, but I really can't make a good guess what the employees are actually doing. Risk assessment, looking for new investment opportunities, regulatory paperwork, marketing? 20,000 is a lot of people.

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

#168

Post by Gshaheen »

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.

Starting end of Nov 2024, Vanguard is actually beginning to roll out proxy voting capabilities to fund holders (in the US). This looks to be the beginning of deeper proxy voting capabilities, but not much information out there yet.

https://corporate.vanguard.com/content/corporatesite/us/en/c...

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

#169

Post by giantg2 »

dcrazy wrote: post #150
giantg2 wrote: post #128

Earlier quoted context omitted.

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

The “tool” was sorting your lots by cost basis, which is what Enginerrrd is saying was taken away.

I would guess it's still there but buried in some UX hell hole

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

#170

Post by WXLCKNO »

aantix wrote: post #163

Feels so strange that the average investor can't outperform an index fund with low management fees. A small investor is so agile - they can move in and out of positions. Why that agility can't be utilized to outperform a slow moving index fund, long-term?

Does average investor here imply someone who's educated on the topic and knows what he's doing?

And you're also saying investor, not trader. So moving in and out quickly doesn't matter as much if we're talking about mid to long term holds.

It also makes sense that those with the largest edge in decision making for trades would collect most of the money.

Post reply on HN