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When you have 40 BILLION to invest, you can't just dump it into an index fund.
by machinshin_ 11y ago
When you have 40 BILLION to invest, you can't just dump it into an index fund.
- kchoudhu 11y agoI wonder what would happen if you did dump it into an index fund...
- desdiv 11y agoWhy not? Vanguard is managing $3 trillion just fine; an additional paltry $40 billion isn't going to tip the boat.
- saryant 11y agoOne Vanguard fund has $186 billion under management. The whole company manages $3 trillion. I think they'd be okay.
- tanderson92 11y agoI really shouldn't nitpick (so please do forgive me), but strictly speaking the whole company doesn't manage $3T. It is true that's the best number to compare to the rest of the industry, but Vanguard has a rather unique corporate structure. The end result is that each Vanguard fund is a company which owns part of the umbrella group. This inverted corporate structure is set up so that the fund-owners have direct stake in management 1) of the umbrella organization 2) only of each individual fund, not other "leaves" of the tree. It might seem like a distinction without a difference, but it's the single greatest reason their cost structure is so much more attractive.