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> 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
by 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.