5 ms·

I cannot imagine a headline that would make me more interested in investing with Vanguard.

dmoy 9y ago
0.005% lower expense ratios is what shifted my stuff from Fidelity to vanguard. Idk how much exposure they're putting into crypto currency based on this.
- dankohn1 9y ago
  Come for the lower expense ratios, stay for the focus on running low cost indexes mutual funds, as opposed to experimenting with cryptocurrencies.
  - SilasX 9y ago
    Okay, but keep in mind Vanguard does offer and promote actively managed funds; whatever focus they have falls short of a tunnel. https://personal.vanguard.com/us/insights/article/active-funds-manager-052016?link=topStories&linkLocation=Position2 https://personal.vanguard.com/us/insights/article/active-fun...
    - dankohn1 9y ago
      Yep, nobody's perfect.
    - daveguy 9y ago
      Active fund with an expense ratio of 0.27%? Well, at least they're doing it with expenses comparable to other robo/index funds.
  - meowface 9y ago
    What's wrong with experimenting with cryptocurrencies? It's not like they're taking away resources from their main business to blow on bitcoins. (Though Vanguard is probably still a better choice regardless.)
    - dankohn1 9y ago
      I want the CEO of my mutual fund company to be focused on how to index better, not on cryptocurrencies.
      - icelancer 9y ago
        God forbid they do both.
      - atomical 9y ago
        Why not just buy ETFs?
        dankohn1 9y ago
        Vanguard sells the very best ETFs (that are simply additional share classes of their mutual funds) exactly because they are so focused on indexing.
        astura 9y ago
        Schwab has the lowest cost index funds ETFs: https://www.schwab.com/public/schwab/investing/accounts_products/schwab_index_funds_etfs https://www.schwab.com/public/schwab/investing/accounts_prod... Additionally, Fidelity offers index funds at a lower cost than Vanguard: https://www.fidelity.com/mutual-funds/investing-ideas/index-funds https://www.fidelity.com/mutual-funds/investing-ideas/index-...
        toomuchtodo 9y ago
        Vanguard is a mutual company. Whatever savings that they can extract from efficiency gains they pass along to their customer base. Also, Fidelity's index funds are loss leaders to retain funds that were flowing out to Vanguard.
        srtjstjsj 9y ago
        > Vanguard is a mutual company. Whatever savings that they can extract from efficiency gains they pass along to their customer base. That's irrelevant if they those gains are less than a competitor's discounts. > Also, Fidelity's index funds are loss leaders to retain funds that were flowing out to Vanguard. So?
- sokoloff 9y ago
  The difference in fees is probably closer to 0.5% (50 basis points), not 0.5 basis points.
  - pgwhalen 9y ago
    This is not actually true anymore, Fidelity has responded. Their pure index funds are extremely competitive with Vanguard.
    - lyrrad 9y ago
      Most of the major players have funds with expense ratios within a couple basis points of each other. When they're that close, picking the fund with the lowest expense ratio may not result in the best performance and other factors can dominate: - How well the fund is run, and how representative it is of the index. A fund with high trading costs may underperform. - Securities Lending policy, how risky it is and how much of the income is returned to the fund - (In taxable accounts) Tax efficiency. Some funds from some vendors return a significant amount of capital gains and short-term dividends, which can cost several basis points in taxes a year. In general, the first two elements can be approximated by comparing the performance of the fund to its benchmark over the same time period, and tax efficiency can be estimated by looking at details of past distributions. In most cases, it wouldn't make sense to switch existing funds to another provider in a taxable account if switching would result in a large capital gain. I'd expect all providers to get better at indexing over time and their performance after taxes to converge.
      - desdiv 9y ago
        EDIT: I was wrong. Please ignore the below incorrect content. >In most cases, it wouldn't make sense to switch existing funds to another provider in a taxable account if switching would result in a large capital gain. As long as the the funds track the same index then it's a Section 1031 like-kind exchange which does not trigger capital gains. [0] https://www.irs.gov/newsroom/like-kind-exchanges-under-irc-code-section-1031 https://www.irs.gov/newsroom/like-kind-exchanges-under-irc-c...

dmoy 9y ago

0.005% lower expense ratios is what shifted my stuff from Fidelity to vanguard. Idk how much exposure they're putting into crypto currency based on this.

dankohn1 9y ago
Come for the lower expense ratios, stay for the focus on running low cost indexes mutual funds, as opposed to experimenting with cryptocurrencies.
- SilasX 9y ago
  Okay, but keep in mind Vanguard does offer and promote actively managed funds; whatever focus they have falls short of a tunnel. https://personal.vanguard.com/us/insights/article/active-funds-manager-052016?link=topStories&linkLocation=Position2 https://personal.vanguard.com/us/insights/article/active-fun...
  - dankohn1 9y ago
    Yep, nobody's perfect.
  - daveguy 9y ago
    Active fund with an expense ratio of 0.27%? Well, at least they're doing it with expenses comparable to other robo/index funds.
- meowface 9y ago
  What's wrong with experimenting with cryptocurrencies? It's not like they're taking away resources from their main business to blow on bitcoins. (Though Vanguard is probably still a better choice regardless.)
  - dankohn1 9y ago
    I want the CEO of my mutual fund company to be focused on how to index better, not on cryptocurrencies.
    - icelancer 9y ago
      God forbid they do both.
    - atomical 9y ago
      Why not just buy ETFs?
      - dankohn1 9y ago
        Vanguard sells the very best ETFs (that are simply additional share classes of their mutual funds) exactly because they are so focused on indexing.
        astura 9y ago
        Schwab has the lowest cost index funds ETFs: https://www.schwab.com/public/schwab/investing/accounts_products/schwab_index_funds_etfs https://www.schwab.com/public/schwab/investing/accounts_prod... Additionally, Fidelity offers index funds at a lower cost than Vanguard: https://www.fidelity.com/mutual-funds/investing-ideas/index-funds https://www.fidelity.com/mutual-funds/investing-ideas/index-...
        toomuchtodo 9y ago
        Vanguard is a mutual company. Whatever savings that they can extract from efficiency gains they pass along to their customer base. Also, Fidelity's index funds are loss leaders to retain funds that were flowing out to Vanguard.
        srtjstjsj 9y ago
        > Vanguard is a mutual company. Whatever savings that they can extract from efficiency gains they pass along to their customer base. That's irrelevant if they those gains are less than a competitor's discounts. > Also, Fidelity's index funds are loss leaders to retain funds that were flowing out to Vanguard. So?
sokoloff 9y ago
The difference in fees is probably closer to 0.5% (50 basis points), not 0.5 basis points.
- pgwhalen 9y ago
  This is not actually true anymore, Fidelity has responded. Their pure index funds are extremely competitive with Vanguard.
  - lyrrad 9y ago
    Most of the major players have funds with expense ratios within a couple basis points of each other. When they're that close, picking the fund with the lowest expense ratio may not result in the best performance and other factors can dominate: - How well the fund is run, and how representative it is of the index. A fund with high trading costs may underperform. - Securities Lending policy, how risky it is and how much of the income is returned to the fund - (In taxable accounts) Tax efficiency. Some funds from some vendors return a significant amount of capital gains and short-term dividends, which can cost several basis points in taxes a year. In general, the first two elements can be approximated by comparing the performance of the fund to its benchmark over the same time period, and tax efficiency can be estimated by looking at details of past distributions. In most cases, it wouldn't make sense to switch existing funds to another provider in a taxable account if switching would result in a large capital gain. I'd expect all providers to get better at indexing over time and their performance after taxes to converge.
    - desdiv 9y ago
      EDIT: I was wrong. Please ignore the below incorrect content. >In most cases, it wouldn't make sense to switch existing funds to another provider in a taxable account if switching would result in a large capital gain. As long as the the funds track the same index then it's a Section 1031 like-kind exchange which does not trigger capital gains. [0] https://www.irs.gov/newsroom/like-kind-exchanges-under-irc-code-section-1031 https://www.irs.gov/newsroom/like-kind-exchanges-under-irc-c...