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Jack Bogle would hate what Vanguard has become

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Re: Jack Bogle would hate what Vanguard has become

#21

Post by ta9000 »

nly wrote: post #20
ta9000 wrote: post #19

Earlier quoted context omitted.

Do you have any evidence that they’re subsidizing US customers? It’s possible the fees are higher in the UK due to it being more expensive to operate the funds.

Most of their funds are incorporated in Ireland (the UK doesn't have native ETFs, they're all European but can be listed on the LSE) Investors in the UK are not partners in Vanguards mutual structure, and Vanguards UK platform ("Vanguard Investor") is not run by Vanguard but by a third party (FNZ, a New Zealand fintech). OCF for VT, a global equity index ETF in the US, is 0.06% UK equivalent (the Global All Cap Index…

Thanks. Are you sure the cost of the fund is higher because it’s a fund and not an ETF like VT? The platform fee seems strange, but I wonder if other companies collect that fee somewhere else?

Re: Jack Bogle would hate what Vanguard has become

#22

Post by nly »

ta9000 wrote: post #21
nly wrote: post #20

Earlier quoted context omitted.

Most of their funds are incorporated in Ireland (the UK doesn't have native ETFs, they're all European but can be listed on the LSE) Investors in the UK are not partners in Vanguards mutual structure, and Vanguards UK platform ("Vanguard Investor") is not run by Vanguard but by a third party (FNZ, a New Zealand fintech). OCF for VT, a global equity index ETF in the US, is 0.06% UK equivalent (the Global All Cap Index…

Thanks. Are you sure the cost of the fund is higher because it’s a fund and not an ETF like VT? The platform fee seems strange, but I wonder if other companies collect that fee somewhere else?

There are no practical differences between funds and ETFs in the UK, except the fact that the latter are live quoted.

Mutual funds are cheap and have no tax disadvantages for us. In fact, outside of tax sheltered accounts, mutual funds are a lot easier to manage for tax purposes.

No, Vanguard just think it's fine to charge us 4x as much

VWRP, which I mentioned, is also an ETF

Re: Jack Bogle would hate what Vanguard has become

#23

Post by UncleMeat »

benjaminklick wrote: post #8
ta9000 wrote: post #6

Earlier quoted context omitted.

3 bps instead of 4? That’s a savings of… $100 on a million annually.

I mean even $100 annually compounds to be tens of thousands over a lifetime. Furthermore, Vanguard manages like almost 10 trillion so that ends up being nearly a billion extra extracted per year. My main issue though is that Vanguard's brand is low-risk passive, but they are now selling high-risk active funds under that brand.

Vanguard's brand is "retirement management company." If you were to ask the vast majority of people with their retirement accounts managed by Vanguard who Jack Bogle was very few would be able to answer.

Quibbling over one basis point in fees just doesn't feel valuable. Tracking error will be larger than this.

Re: Jack Bogle would hate what Vanguard has become

#24

Post by gregw2 »

jglamine wrote: post #5

Fidelity has been killing it with their passive investing options. Zero expense ratio funds, cash management account. I am going to switch, will save perhaps 30k in fees over next few decades

Rather than switch completely, consider putting your eggs in two baskets?

Re: Jack Bogle would hate what Vanguard has become

#25

Post by gregw2 »

benjaminklick wrote: post #8
ta9000 wrote: post #6

Earlier quoted context omitted.

3 bps instead of 4? That’s a savings of… $100 on a million annually.

I mean even $100 annually compounds to be tens of thousands over a lifetime. Furthermore, Vanguard manages like almost 10 trillion so that ends up being nearly a billion extra extracted per year. My main issue though is that Vanguard's brand is low-risk passive, but they are now selling high-risk active funds under that brand.

You aren't wrong that Vanguard seems more active friendly these days.

But Vanguard under Bogle always played both sides of the fence at least to some extent. They have always had that actively managed Windsor fund, right? And Wellington?

I think your article headline shows you have a fair bit more to learn about Bogle. Or at least you haven't made your case on that front. Bogle was at least as much about low cost and aligning interests of the investment client as he was about passive indexing, though he is known more for the latter.

Here's a writeup with a couple pointers to more on the topic from Bogle: https://www.bogleheads.org/forum/viewtopic.php?t=388377

Re: Jack Bogle would hate what Vanguard has become

#26

Post by david-gpu »

benjaminklick wrote: post #13
no-name-here wrote: post #11

Earlier quoted context omitted.

Isn't it equally likely the opposite - your comment presumes that Vanguard is using money from passive to prop up active, whereas it could also be that money from active is already being used to lower fees on passive?

And what happens if active fails? Then passive would take the hit even though people go with Vanguard specifically for the low-risk passive.

> And what happens if active fails? Then passive would take the hit

What specific concern do you have in mind? Are you aware that the corporate structure of Vanguard is that it is the funds who own the company, not the other way around?

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

Re: Jack Bogle would hate what Vanguard has become

#28

Post by ta9000 »

nly wrote: post #22
ta9000 wrote: post #21

Earlier quoted context omitted.

Thanks. Are you sure the cost of the fund is higher because it’s a fund and not an ETF like VT? The platform fee seems strange, but I wonder if other companies collect that fee somewhere else?

There are no practical differences between funds and ETFs in the UK, except the fact that the latter are live quoted. Mutual funds are cheap and have no tax disadvantages for us. In fact, outside of tax sheltered accounts, mutual funds are a lot easier to manage for tax purposes. No, Vanguard just think it's fine to charge us 4x as much VWRP, which I mentioned, is also an ETF

Very interesting. Thanks for the information!

Re: Jack Bogle would hate what Vanguard has become

#29

Post by red-iron-pine »

benjaminklick wrote: post #13
no-name-here wrote: post #11

Earlier quoted context omitted.

Isn't it equally likely the opposite - your comment presumes that Vanguard is using money from passive to prop up active, whereas it could also be that money from active is already being used to lower fees on passive?

And what happens if active fails? Then passive would take the hit even though people go with Vanguard specifically for the low-risk passive.

why would the passive funds collapse? or the business?

why would the active funds fail?

if you have 1.1 million in the bank you can afford to take $500 to poker tables

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