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

bloomberg.com

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

#71

Post by cbg0 »

latchkey wrote: post #49
mdasen wrote: post #43

Earlier quoted context omitted.

Vanguard funds are owned by the investors in those funds. The fees that they charge are to cover the expenses, not make profit for a private company. If they're doing so well that the fees are brining in more money than they need, they lower the fees so that their owners (the investors in the funds) don't have to pay as much in fees. Their business is doing so well that they can lower fees.

> Their business is doing so well that they can lower fees. The counter to that is that they are not doing so well, that they need to attract more investors.

Your counter assumes that it's one or the other, but there could be more reasons, such as doing well but looking to steal even more market share.

At over $10 trillion AUM, it's hard to think that they're "not doing so well".

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

#72

Post by giantg2 »

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

Interesting. That would put their budget higher than the bottom 10% of state budgets.

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

#73

Post by baking »

robszumski wrote: post #54
whitepoplar wrote: post #23

Earlier quoted context omitted.

Fidelity's "Zero" funds are great, but only for specific scenarios IMO. They can't be held outside Fidelity accounts, so what happens if you get caught up in some KYC nonsense and Fidelity closes your account? Are you forced to liquidate and incur capital gains? There are also some embedded tax efficiencies inherent to ETFs, like 351 exchanges, which aren't popular now, but may become popular in the future. TBH, this…

The zero fund I am familiar with (FZILX) has a once-a-year dividend schedule which I'm sure nets them a lot of money, vs paying out more frequently. If you want to unload, you can only do it once a year without throwing away your earned dividend.

That's not how dividends work.

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

#75

Post by omgJustTest »

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 fee funds, but they typically dont match the performance over the time period, and fidelity is a recent entry for their funds.

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

#76

Post by im3w1l »

JKCalhoun wrote: post #8

Article mentions their bond funds getting the most dramatic cuts — they didn't list specific symbols though. Anyone know off the top of their heads which funds specifically? Thinking I need to move away from being so stock-heavy.

Bonds kind of fell of my radar for a while. What are yields like now?

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

#77

Post by toast0 »

FooBarBizBazz wrote: post #62
arielweisberg wrote: post #4

Earlier quoted context omitted.

I started using E-trade because of this instead of transferring my vested stock to Vanguard. Already had an account so it was zero effort to convert to my usual funds as ETFs which has the bonus of being transferable between brokerages unlike mutual funds.

> convert to my usual funds as ETFs Do you mean that you sold mutual funds at Vanguard, and used the cash to buy ETFs at eTrade? This means you had to pay tax on capital gains, right? Or is there some trick I don't know about, vis-a-vis converting mutual funds into equivalent ETFs, without a taxable event?

Many Vanguard mutual funds offer ETF as a share class of the fund. For those funds, shares in the traditional share classes can be exchanged for ETF shares, if you hold them at Vanguard.

But not all of the funds have an ETF share class. And if you hold Vanguard mutual funds elsewhere, you'd need to transfer them in-kind to Vanguard to convert.

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

#78

Post by turnsout »

recursive wrote: post #70
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

And now I trust Vanguard just a little more.

Agreed—this strengthens my feelings about the brand. And I write this as someone who also holds (a tiny amount of) crypto

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

#79

Post by baking »

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 really annoying that people here are talking about "Zero" fee funds as if they were zero-fee funds. As far as I can tell "Zero" means less than 0.05% fees.

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

#80

Post by zelon88 »

xadhominemx wrote: post #25
op00to wrote: post #16

Earlier quoted context omitted.

Only if you get caught. And the fine needs to be higher than the profit.

It’s pretty easy to learn how fidelity and others make money on fee-free index funds. Perhaps something to look into before accusing them of committing a crime.

Considering someone or some activity to be criminal, and accusing them of being a criminal, are two completely different things.

I consider most financial institutions to be criminal because it is always their clear intention to circumvent the spirit of the law as closely as possible. The intention is to reap the benefits of breaking the law, without the risk of consequence. When the pitchforks come, these are going to be the criminals being chased down the street.

By the same token, I do not consider a parent who writes a bad check for groceries to be a criminal.

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