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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

#171

Post by Animats »

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…

I trusted Vanguard more until they became a broker and forced all their fund customers to have a brokerage account with them.

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

#172

Post by francisofascii »

wil421 wrote: post #162
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...

That is the average. Many of them are just 0.03% or 0.04%

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

#173

Post by recursive »

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...

I'd rather not have to either. I'm going to be honest. I'm not a smart man. I don't understand the first link at all. The other two I don't care about.

However, to the extent that those things are bad, they are much less bad than my trust in myself to securely manage a crypto wallet key.

If there was some magic thing that just automatically worked and I could somehow trust it, I would be all in. That's not the case for any cryptocurrency I know of because you need to A) maintain access to your wallet key and B) prevent other people from getting it and C) don't inadvertantly click any of those links that drain your account that I've heard of (I don't understand the details)

If you can put in the research and discipline to satisfy those requirements, I'm certainly not going to try to talk you out of it, but they're way to steep for us normies.

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

#174

Post by dweez »

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…

Matt Levine has a bit about the best customer service your broker can provide is not picking up the phone in a crisis.

Bad UX is, intentionally or not, consistent with Vanguard's long-term index investing philosophy. Call us? Use our website? Whatever it is you are trying to do, you probably shouldn't be doing that.

I kid, but only a little.

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

#175

Post by gruez »

toast0 wrote: post #161
gruez wrote: post #152

Earlier quoted context omitted.

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 war…

>Most of the illegal front running is trading ahead of specific trades in response to seeing those orders.

Any evidence this is actually happening, rather than something like "this ETF rebalances every quarter, they're unbalanced, and are expected to rebalance in this way", or "this company is probably going to get included in the S&P 500 because it's doing really well"? What makes this sort of "front running" less acceptable than buying because "I like the stock", or trading on technical analysis?

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

#176

Post by Maxatar »

wil421 wrote: post #162
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...

2% over 30 years is inconsequential. At an average rate of 7%, that mean you'll grow your investment by 759% over 30 years instead of 761%.

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

#177

Post by tobiasdorge »

omgJustTest wrote: post #75

Unless you have some super special edge, Vanguard is really good IMO. Having a 0.01% or 0.05% fund is really as good as you can do and never pay attention. Vanguard also has things like the VIGAX (0.05%) and the VITAX (0.09%) with excellent returns over the past 20 years. You could also actively invest, where you can get lucky, but if you have a day job... it gets tougher. edit: also you could do "better" with lower…

actively investing is 1) hard and 2) really just a waste of time considering the amounts most people are dealing with. I think it may have been from A Random Walk Down Wall Street but the general notion is something like this:

You have a 500k portfolio, and you spend the average amount week managing your portfolio (12 hours). If you were to achieve a 2% alpha (which is considered insanely high for any actively managed fund, and almost impossible to replicate year after year), you have made an excess $10k over what you would have made investing your portfolio in a benchmark.

On an hourly basis that's about $16 per hour spent... you could get more reliable income working at a gas station in California. And of course, most people are not investing $500k, the vast majority of day traders are probably pulling their hair out managing <$100k...

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

#178

Post by latchkey »

recursive wrote: post #173
latchkey wrote: post #87

Earlier quoted context omitted.

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...

I'd rather not have to either. I'm going to be honest. I'm not a smart man. I don't understand the first link at all. The other two I don't care about. However , to the extent that those things are bad, they are much less bad than my trust in myself to securely manage a crypto wallet key. If there was some magic thing that just automatically worked and I could somehow trust it, I would be all in. That's not the case…

The internet was very confusing to most people before AOL came along and gave out free CD's with email addresses.

Just because the UX sucks today, doesn't mean the fundamental underlying technology isn't something worth building on.

By the way, if you think crypto UX is hard, try trading options with thinkorswim.

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

#179

Post by pembrook »

jliptzin wrote: post #122
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…

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.

Front running customer purchases is not the concern. In the running of an index fund there’s many levers you can pull to create revenue streams that don’t show up on expense ratios.

Funny business can absolutely be pulled during rebalancing.

Another big one is securities lending income. Vanguard pays that out to investors which effectively creates negative expense ratios in certain funds. Index funds from other issuers don’t necessarily share that securities lending income with customers.

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

#180

Post by latchkey »

bluGill wrote: post #126
latchkey wrote: post #87

Earlier quoted context omitted.

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 d…

I'd rather not have to trust a non-profit insurance company to keep a very small portion of my funds safe. This stuff should be in-code and immutable by any one individual or corporation.
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