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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?
    - desdiv 9y ago
      >So? Loss leaders are by their nature unprofitable and thus will go away as soon as they're not required. Suppose if Vanguard disappears, then Fidelity will hike their rates up. On the other hand, if Fidelity disappears, Vanguard won't hike their rates up because they won't bite the hand that feeds them since it's their own hand.
      - dx034 9y ago
        You can trade daily, why not keep the Fidelity ETF until they hike prices?
        jsoc815 9y ago
        https://www.bloomberg.com/news/features/2016-04-20/the-wine-mogul-vs-fidelity https://www.bloomberg.com/news/features/2016-04-20/the-wine-...
  - astura 9y ago
    If low cost index funds are unprofitable then please explain how BlackRock is making so much money off of them? https://www.forbes.com/sites/greatspeculations/2015/01/13/record-etf-inflows-likely-to-drive-blackrocks-profits-to-all-time-high/#57894f8d2c17 https://www.forbes.com/sites/greatspeculations/2015/01/13/re...
    - toomuchtodo 9y ago
      They're not unprofitable in general. They are for Fidelity, which is using it as a loss leader to keep their customer base from fleeing (Fidelity has a lot of overhead as a financial services firm).
      - astura 9y ago
        How do you know? Unless you have some actual evidence you're just making things up. Fidelity's largest fund is an index fund[1]. Do they make less money with index funds vs actively managed funds? Probably. I see no evidence that they are losing money on them and ample evidence they are profitable. [1] https://www.bloomberg.com/news/articles/2016-12-02/fidelity-investments-biggest-stock-fund-is-now-an-index-fund https://www.bloomberg.com/news/articles/2016-12-02/fidelity-...
        toomuchtodo 9y ago
        Because Vanguard expense ratios are run at-cost. Vanguard holds more funds in index funds then Fidelity; how could Fidelity have lower costs? > If Vanguard's index funds are run at-cost, then how does Fidelity make by undercutting Vanguard's rates? https://www.reddit.com/r/investing/comments/62fbk9/if_vanguards_index_funds_are_run_atcost_then_how/ https://www.reddit.com/r/investing/comments/62fbk9/if_vangua... https://www.fidelity.com/mutual-funds/investing-ideas/index-funds https://www.fidelity.com/mutual-funds/investing-ideas/index-... http://www.ft.com/cms/s/0/6663cd8c-410d-11e6-9b66-0712b3873ae1.html?ft_site=falcon&desktop=true#axzz4cpUUAU87 http://www.ft.com/cms/s/0/6663cd8c-410d-11e6-9b66-0712b3873a...
        9y ago

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?
  - desdiv 9y ago
    >So? Loss leaders are by their nature unprofitable and thus will go away as soon as they're not required. Suppose if Vanguard disappears, then Fidelity will hike their rates up. On the other hand, if Fidelity disappears, Vanguard won't hike their rates up because they won't bite the hand that feeds them since it's their own hand.
    - dx034 9y ago
      You can trade daily, why not keep the Fidelity ETF until they hike prices?
      - jsoc815 9y ago
        https://www.bloomberg.com/news/features/2016-04-20/the-wine-mogul-vs-fidelity https://www.bloomberg.com/news/features/2016-04-20/the-wine-...
- astura 9y ago
  If low cost index funds are unprofitable then please explain how BlackRock is making so much money off of them? https://www.forbes.com/sites/greatspeculations/2015/01/13/record-etf-inflows-likely-to-drive-blackrocks-profits-to-all-time-high/#57894f8d2c17 https://www.forbes.com/sites/greatspeculations/2015/01/13/re...
  - toomuchtodo 9y ago
    They're not unprofitable in general. They are for Fidelity, which is using it as a loss leader to keep their customer base from fleeing (Fidelity has a lot of overhead as a financial services firm).
    - astura 9y ago
      How do you know? Unless you have some actual evidence you're just making things up. Fidelity's largest fund is an index fund[1]. Do they make less money with index funds vs actively managed funds? Probably. I see no evidence that they are losing money on them and ample evidence they are profitable. [1] https://www.bloomberg.com/news/articles/2016-12-02/fidelity-investments-biggest-stock-fund-is-now-an-index-fund https://www.bloomberg.com/news/articles/2016-12-02/fidelity-...
      - toomuchtodo 9y ago
        Because Vanguard expense ratios are run at-cost. Vanguard holds more funds in index funds then Fidelity; how could Fidelity have lower costs? > If Vanguard's index funds are run at-cost, then how does Fidelity make by undercutting Vanguard's rates? https://www.reddit.com/r/investing/comments/62fbk9/if_vanguards_index_funds_are_run_atcost_then_how/ https://www.reddit.com/r/investing/comments/62fbk9/if_vangua... https://www.fidelity.com/mutual-funds/investing-ideas/index-funds https://www.fidelity.com/mutual-funds/investing-ideas/index-... http://www.ft.com/cms/s/0/6663cd8c-410d-11e6-9b66-0712b3873ae1.html?ft_site=falcon&desktop=true#axzz4cpUUAU87 http://www.ft.com/cms/s/0/6663cd8c-410d-11e6-9b66-0712b3873a...
        9y ago