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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

#191

Post by latchkey »

ch4s3 wrote: post #182
latchkey wrote: post #39

Let's not forget that Vanguard has taken a strong stance against crypto [0]. Claiming to significantly invest in technology while deliberately ignoring the latest advancements in financial technology, seems contradictory. If their business was doing so well, they wouldn't have to lower fees. [0] https://news.ycombinator.com/item?id=42832026

This is for the same reason they don't mix gold ETFs into their indexes. The point of their funds is to track companies that produce goods and services, not asserts and commodities.

Twist things around however you want, but VGPMX [0] invests in the companies producing precious metals. 1/4 of the portfolio is that.

[0] https://investor.vanguard.com/investment-products/mutual-fun...

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

#192

Post by thehappypm »

echoangle wrote: post #167
coldpie wrote: post #143

Earlier quoted context omitted.

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.

How many people is ideal to look after $10,000,000,000,000 in assets? Some bloat is definitely necessary at these mind-boggling numbers, and assets-per-employee is still half a billion.

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

#193

Post by lupire »

giantg2 wrote: post #61
Enginerrrd wrote: post #30

Earlier quoted context omitted.

We tried using vanguard. The UX/UI was so bad we went through the work of transferring everything to fidelity. They've got a pretty decent app. Vanguard has so much friction on what should be very simple and common tasks. There's no excuse for that. I can say pretty confidently that cutting fees won't be enough. They need a total rewrite of all their customer facing software and web stuff, and they probably need to r…

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…

They can't even correctly donate from a Vanguard brokerage account to a Vanguard DAF without breaking the cost basis.

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

#194

Post by hassleblad23 »

noveltyaccount wrote: post #188

I'm a big fan of Vanguard, but if anyone is looking for competitively-priced funds from other issuers, check out - iShares Core (Blackrock) https://www.ishares.com/us/strategies/core-etfs - SPDR Portfolio (State Street) https://www.ssga.com/us/en/individual/fund-finder - Schwab Select (includes in-house and third-party) https://www.schwab.com/research/etfs/tools/select-list

Which of these do you use personally?

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

#195

Post by datavirtue »

nfriedly wrote: post #24
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…

I have accounts at both, and my perception is that Vanguard is pretty much exclusively low cost, but Fidelity does have some very competitive options if you can find them. They just also have a lot of overpriced junk. Fidelity’s technology and customer service does generally seem better. Although they were completely baffled when their app refused to run on a rooted phone with an error message along the lines of “you…

The overpriced junk is wedged into bespoke employer 401k programs that are managed by the brokers. There is usually only one or two low fee options hiding in the list and you have to be savvy to find them. Most employer 401k programs suck because they (custodian) are agreeing to the fund composition based on price to them. If you are lucky you might not end up in John Hancock or Transamerica. Yuck!

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

#196

Post by echoangle »

lolc wrote: post #187
echoangle wrote: post #167

Earlier quoted context omitted.

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.

I imagine they have actual customer service. But maybe I'm naive?

In what situation would you contact them? Aren’t basically all possible problems you could have something you would contact your broker for?

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

#197

Post by echoangle »

coldpie wrote: post #183
echoangle wrote: post #167

Earlier quoted context omitted.

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.

One way to get a hint at what kind of work employees do is by looking at open job postings: https://www.vanguardjobs.com/job-search-results

Nice link, thank you!

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

#198

Post by jazzyjackson »

feoren wrote: post #157
londons_explore wrote: post #32

Earlier quoted context omitted.

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?

Bad analogy. There are many dimensions in which my experience as a dairy cow may be affected by ownership.

In the case of an investment fund, there's really just customer service and rate of return. If I have a good experience in those dimensions, why should I be concerned with ownership structure?

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

#199

Post by travisr »

websap wrote: post #181

What does this mean for folks like me who buy Vanguard ETFs through Robinhood. The Vanguard UI / UX is absolutely terrible. Opening the website instantly transports me to 2002.

The fees will be the same regardless of where you buy Vanguard funds.

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

#200

Post by pinkmuffinere »

frognumber wrote: post #160
pinkmuffinere wrote: post #158

Earlier quoted context omitted.

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.

Ah I see, the 7% yearly interest on the 0.5% fee can add up to be significant. That is a good point, good job @guntars
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