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Vanguard's average fee is now 0.07% after biggest-ever cut
- cantaloupe 2y agohttps://archive.is/jigpT https://archive.is/jigpT
- ilamont 2y agoNot 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 levels are poor compared to Fidelity. Cutting fees helps, but Fidelity has shown its willing to do this, too, including no fee "Zero" index funds: https://www.fidelity.com/mutual-funds/investing-ideas/index-funds https://www.fidelity.com/mutual-funds/investing-ideas/index-... (note Fidelity is very clear about who it's competing with)
- tommiegannert 2y agoIsn't this about the funds, rather than using Vanguard as a broker? Can't you buy Vanguard funds while on Fidelity, or vice versa?
- angry_moose 2y agoYou can. There's usually a hefty transaction fee when purchasing a funds not managed by whichever service you're on ($49?). Might be manageable if you're purchasing in enormous quantities; but a 5% fee on $1000 hurts if you're in normal consumer purchase ranges.
- jhardy54 2y agoThis is true for mutual funds, but Vanguard ETFs are available on Fidelity with no fees.
- giantg2 2y agoAnd ETFs are generally more tax efficient anyways. I'm not sure what the benefit to funds are.
- matthewbauer 2y agoIt used to be you could buy fractions of a mutual fund, but not ETFs. Recently, brokerages have started allowed you to do fractional ETFs as well though.
- bombcar 2y agoThere are some minor advantages to funds left, especially in taxable. Some of the funds do their best to allocate certain costs to the ETFs so that ends up more favorable tax-wise. The real main advantage of funds vs ETFs is they don't bounce around in price every millisecond.
- everfree 2y agoJust because mutual funds are priced and traded daily doesn't mean their market value isn't still bouncing around every millisecond.
- tgarg01 2y agoOne benefit to Mutual Funds is that you can do things like reinvest dividends, or investment plans. It's not a fundamental advantage that a mutual fund has, but no brokers that I am aware of would let you do those things with an ETF. So if you have long term "forget it" account, with ETFs it will accumulate cash from dividends. And the tax benefit of ETFs doesn't really help in a tax advantaged account (e.g. retirement). Finally, theoretically at least, when you buy an ETF there is an explicit "transaction cost". Even when they don't charge you a commission, there's a bid ask spread. Mutual funds trade at NAV both ways (unless of course there's an external transaction cost separately disclosed).
- arielweisberg 2y agoI 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.
- kasey_junk 2y agoYou can frequently do in kind transfers of mutual funds, particularly between the big funds and brokers.
- arielweisberg 2y agoYou can’t for funds that are only available at a single brokerage. This describes a lot of index funds and wrapper funds.
- kasey_junk 2y agoThe big index and wrapper funds at vanguard you absolutely can.
- FooBarBizBazz 2y ago> 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?
- toast0 2y agoMany 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.
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- wing-_-nuts 2y agoTBH, I trust vanguard more, even if their website is absolutely worse. There's a saying, 'if you're not the customer, you're the product'. I expect trades on those index funds are getting 'front run' much like robinhood is getting front run. You might have a lower ER but your nav might effectively be higher when buying and lower when selling. Of course, I'm a 'buy and hold' investor so this doesn't really effect me much, but it's the principle of the matter.
- kasey_junk 2y agoFront running is illegal.
- op00to 2y agoOnly if you get caught. And the fine needs to be higher than the profit.
- xadhominemx 2y agoIt’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.
- zelon88 2y agoConsidering 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.
- xadhominemx 2y ago
- Gshaheen 2y agoOne other differentiation that Vanguard has is that it is owned by the fund holders “Vanguard set out in 1975 under a radical ownership structure. Our company is owned by its funds, which in turn are owned by Vanguard’s fund shareholders. We focus on meeting the investment needs of our clients.” So in short, vanguard is customer-owned, where fidelity is owned by mostly the founding family (the Johnson’s). https://corporate.vanguard.com/content/corporatesite/us/en/corp/who-we-are/sets-us-apart/index.html https://corporate.vanguard.com/content/corporatesite/us/en/c...
- londons_explore 2y agoBut does that structure confer any realistic chance of voting control by any real humans who aren't already employed by vanguard? Funds aren't known for being voting activists.
- ElevenLathe 2y agoEven so, I think the incentives are still for the Vanguard management to make as little profit as possible so that they can compete and have more funds under management. Controlling more billions of dollars of stock shares is kind of its own reward and brings many opportunities for enrichment, and if they don't have to worry about making money for shareholders, they can pretty much always engineer the lowest fees.
- anonymousDan 2y agoThis kind of thing makes me nervous. What kind of opportunities? Can they somehow loan out shares for example?
- recursivecaveat 2y agoEven if you don't touch a dime of it, "had $X million in funds under management" is good for your next job. In business better to be the CEO of an ailing billion dollar business and drive it into the ground than actually do a good job managing a firm 1/10th the size.
- yesimahuman 2y agoI don't think vanguard's core customer base cares about what hungry competitors are doing to entice them to move. Just look at Robinhood: they offered the biggest financial incentive for users to switch of any broker in the industry and I doubt many vanguard customers took them up on that. Stability, trust, and low fees are all buy and hold investors at Vanguard really care about.
- nothercastle 2y agoThey only offered it for a month or 2 and pulled it pretty quick
- deleted 2y ago[deleted]
- whitepoplar 2y agoFidelity'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 mainly applies to taxable accounts. For nontaxable accounts, Zero funds don't have much downside.
- robszumski 2y agoThe 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.
- baking 2y agoThat's not how dividends work.
- robszumski 2y agoYou have to hold the fund on the ex-dividend date... Pays out once in Dec. If you buy in Feb and sell in Oct, you're not getting your dividend although you earned most of it... If you had VTI, you'd get 3 of them.
- baking 2y agoDividends are built into the NAV price. It just becomes taxable income when it is paid out.
- robszumski 2y agoAh right
- nfriedly 2y agoI have accounts at both, and my perception is that Vanguard is pretty much exclusively low cost, but Fidelity does have some very competitive options if you can find them. They just also have a lot of overpriced junk. Fidelity’s technology and customer service does generally seem better. Although they were completely baffled when their app refused to run on a rooted phone with an error message along the lines of “your account is frozen” after I logged in. (It wasn’t, and worked fine after I realized that was the issue and put it on the deny list.) Overall, I trust Vanguard more, but both have their strong points.
- datavirtue 2y agoThe overpriced junk is wedged into bespoke employer 401k programs that are managed by the brokers. There is usually only one or two low fee options hiding in the list and you have to be savvy to find them. Most employer 401k programs suck because they (custodian) are agreeing to the fund composition based on price to them. If you are lucky you might not end up in John Hancock or Transamerica. Yuck!
- Enginerrrd 2y agoWe tried using vanguard. The UX/UI was so bad we went through the work of transferring everything to fidelity. They've got a pretty decent app. Vanguard has so much friction on what should be very simple and common tasks. There's no excuse for that. I can say pretty confidently that cutting fees won't be enough. They need a total rewrite of all their customer facing software and web stuff, and they probably need to revamp their customers service as well. They screwed up my wife's name and she tried for months and months to fix it before giving up.
- ryandrake 2y agoVanguard recently made two horrible mistakes: 1. a typical "Grand UI Redesign" that made the site worse and removed a bunch of previously working features, and 2. They made all their users "migrate" their accounts from one type to another, a process that I found to be error prone and clunky. For 1, all of us software people have seen companies do this over and over, and it always sucks. For 2, why they couldn't do whatever backend migration they needed to do without having it disrupting retail customers, I have no idea. Both of those point to a software organization way below where it needs to be competence-wise.
- ecshafer 2y agoVanguard's grand UI redesign was poorly done. At the time each team was responsible for some software product, and had a good ownership model. The issue imo was that the internal UI component library was poorly made and funded, and that the UX team was very old (most of the people were lifers that were hired in the 90s, no real experience in UI/UX,etc.) So people were just making the designs they were given. The Grand UI Redesign was a single new team that just made a heavy Angular UI application for the major areas, forcing product teams to be backend only. This caused discontinuity and didn't really fix the core issue.
- venusenvy47 2y agoI've had the same Vanguard accounts for 15 years (Rollover IRAs, Roth IRAs, non-retirement) and I don't remember having to migrate anything. If something was migrated, I wasn't even aware it happened.
- xhkkffbf 2y agoI'm waiting for negative fee funds that delivers better than indexed returns by loaning out the shares to shorts.
- toast0 2y agoMany funds do make revenue with share lending. I don't know that there's enough lending to get expenses below zero, at least as of yet, though. Also, sometimes the lending revenue is just added to the fund, rather than being used to offset expenses. The end result is the same, but the accounting numbers look different. As a result, when comparing two index funds that track the same index, you should look at actual total returns rather than quoted expense ratios.
- jhardy54 2y agoRE: Fidelity Zero The downside, as I understand it, is that Fidelity Zero doesn’t offer ETFs, and that the Fidelity Zero mutual funds can’t be transferred to other brokerages. Depending on your preferences their expense ratios might justify the vendor lock-in, but Vanguard ETFs are hard to beat IMO.
- giantg2 2y agoI wonder what the tax efficiency looks like when comparing a zero fee fund to its low fee ETF counterpart. Is it possible an ETF under 5 or even 10 basis points is still a better deal if it's tax efficient (taxable accounts only)?
- selykg 2y agoI tend to only use the zero funds in tax advantaged accounts. Primary example, I needed to move an HSA to avoid a $20/month fee from the idiots at Health Equity when I switched jobs. Moved it immediately to Fidelity since they offer an HSA account and used the zero funds. If I were to ever need to move the HSA money elsewhere, they can sell the funds to transfer, since it's not a taxable event, that's fine by me. I won't buy the zero funds for my brokerage account though, I stick with Vanguard ETFs.
- baking 2y agoIt'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.
- ak217 2y agoNo, zero means a 0% expense ratio and no minimums, as listed for the four funds at the top of https://www.fidelity.com/mutual-funds/investing-ideas/index-funds https://www.fidelity.com/mutual-funds/investing-ideas/index-.... Unlike most other funds, these are captive to Fidelity so if you ever do an ACATS transfer they have to be liquidated.
- bombcar 2y agoThat's the key, though if it's a tax-advantaged account it's not a major issue (as you can just transfer to an appropriate ETF and then ACATS that). In taxable it could cause you to have to stay with Fidelity or eat a tax bill.
- ak217 2y agoIt's an interesting reversal and highlights the power of competition - as a young part-time employee in college, my employer automatically contributed a few hundred dollars for me to a 403(b) type of retirement savings account. Fidelity was the custodian and after I left the job, it imposed a substantial monthly fee that eventually ate all of the money in the account, leaving me with zero. I always remember that episode when dealing with Fidelity.
- yieldcrv 2y agoand Vanguard keeps fading the crypto vote, and Fidelity is the exact opposite everyone can vote with their wallet
- nothercastle 2y agoIt’s hard to beat Fidelitys offer right now. They give you a 2-3% checking account. A 2% cash back credit card, access to their low cost funds and a decent enough website. All in one place. Other brokerages are better at their niche but the fidelity package is quite competitive
- silisili 2y agoFidelity has great features, but is hamstrung by their awful execution. The app is clunky, slow, and looks like something from the 90s. Just logging in takes an average of 10-15 seconds. The credit card is serviced by Elan, who is awful, but aside from that, the UX is abysmal. It feels like it redirects no less than 8 times to get to the credit card page. My phone won't even load it, so I have to do it on my computer. It's so frustrating to me because I feel like they're 90% of the way there and just need a bit of UX work. But I've had that feeling for years now, with no real progress made, so am slowly moving away. If you don't touch your money often, it's probably fine - great even, but it became too frustrating for me in the end as an everyday use account.
- nothercastle 2y agoGood to know that Elan services the card and is terrible. I’ll avoid
- js2 2y agoFWIW, I've been using the card since late 2019 and had zero issues with it. There aren't a lot of 2% cards that just straight give you 2% cash back w/o any hoops[1]. The Fidelity card is no muss no fuss for me. 2% just magically appears in my designated Fidelity account at the end of the month. I have not had to interact with Elan customer service, so I can't speak to that. I also don't care about the Fidelity mobile app (I use fidelty.com from my laptop). I haven't had any issues using fidelty.com to manage the card. [1] https://old.reddit.com/r/CreditCards/wiki/list_of_flat_cashback_cards_with_benefits https://old.reddit.com/r/CreditCards/wiki/list_of_flat_cashb...
- dweez 2y agoMatt Levine has a bit about the best customer service your broker can provide is not picking up the phone in a crisis. Bad UX is, intentionally or not, consistent with Vanguard's long-term index investing philosophy. Call us? Use our website? Whatever it is you are trying to do, you probably shouldn't be doing that. I kid, but only a little.
- noirbot 2y agoIt's interesting everyone's saying the UX is bad. I've had consistently good interactions with Vanguard's support over the years. I regularly get to talk to an actual human without waiting more than 10-20 minutes, and they're very helpful about getting things done and giving even basic advice about tradeoffs in different investing options. The website isn't amazing, but I don't feel like it's terrible either. There's much worse 401k/IRA providers out there.
- sockaddr 2y agoYeah, as a litmus test of how much they care about their customers try to call in and get something done. Vanguard will throw you into an automated labyrinth with the only exit being a poorly-trained rep in india or pakistan that has no real understanding of what you're trying to do. Their website is complete trash compared to the other big two. Often down, you can only check your balance, etc. Fidelity will within a matter of a couple of minutes connect you with someone that seems too good to be true. Knowledgeable, friendly, going out of their way to help you, they follow up on what they say (like calling you back, etc). Once I got a taste of how Fidelity treats people and their broader set of products I moved everything over. Vanguard is circling the drain if you ask me.
- noirbot 2y agoI'm wondering if I'm on some very different account/plan than everyone else. Any time I've ever called Vanguard, I've gotten a super well trained rep without much of a wait or a call tree. I also had good interactions with Fidelity when I used them. Were you on a plan run through an employer? Or individual?
- venusenvy47 2y agoIt might be related to how much money you have invested. They publish a list of levels that provide different levels of service. https://investor.vanguard.com/client-benefits https://investor.vanguard.com/client-benefits The breakpoints are $50k, $500k, $1M, $5M.
- sockaddr 2y agoEnough to not be treated like I was. Sorry that's vague.
- noirbot 2y agoAlso, that page seems to be talking about like... financial advisor services. Most of the time I was just calling in to ask for help rolling over a 401k or something. I don't think I've ever called for actual investment advice of the sort that they seem to gate behind certain account sizes. I'm wondering if it's something where company-sponsored plans sometimes have bad CS support because their support contracts are paid/arranged separately from if you just have a personal account. Or if some company plans have better support because they pay for it?
- mock-possum 2y agoFWIW, I’ve hd excellent customer service / support experiences with Vanguard - and the opposite with Fidelity.
- JKCalhoun 2y agoArticle 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.
- fred256 2y agoThe full list is at the bottom of their press release: https://corporate.vanguard.com/content/corporatesite/us/en/corp/articles/announcing-largest-fee-cut-vanguard-history.html https://corporate.vanguard.com/content/corporatesite/us/en/c...
- francisofascii 2y agoLots of small reductions to the specialty bond funds. VCIT and BIV (Intermediate Term bonds) moving from from 0.04% ==> 0.03%. One notable drop is with VWOB (Emerging Markets Government Bond) going from 0.15% to 0.1%.
- dinkblam 2y ago> they didn't list specific symbols though. rule of journalism: never quote the original news/article source rule of financial journalism: never list the ticker/wkn/isin that would make the article actually useful
- im3w1l 2y agoBonds kind of fell of my radar for a while. What are yields like now?
- JKCalhoun 2y agoI always upvote the archive link unless it is already the top comment, ha ha.
- dang 2y agoI've detached this comment from https://news.ycombinator.com/item?id=42933291 https://news.ycombinator.com/item?id=42933291 so I could move the latter to the top :)
- sega_sai 2y agoThat only applies to US funds, but not in the UK ones which continue to be significantly more expensive...
- cess11 2y agoMy broker doesn't show fee on some of the Vanguard instruments, but e.g. the S&P 500 UCITS ETF (USD) has 0.08 % listed as fee. Which ones are you looking at?
- giantg2 2y agoHow do those compare to average expense ratios and fees in that market?
- francisofascii 2y agoVanguard FTSE Europe ETF (VGK) is only 0.06%
- callamdelaney 2y agoDidn't they recently increase uk fees a tonne?
- manojlds 2y agoThat was the platform fees.
- andsoitis 2y agoStraight from the source: https://corporate.vanguard.com/content/corporatesite/us/en/corp/articles/announcing-largest-fee-cut-vanguard-history.html https://corporate.vanguard.com/content/corporatesite/us/en/c...
- latchkey 2y agoLet'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 https://news.ycombinator.com/item?id=42832026
- thorncorona 2y agocynically, crypto’s greatest achievement thus far has been speed running 200 years of financial mistakes and explaining why we need financial regulation.
- latchkey 2y agoIt is so predictable to get a straw man argument like this. https://news.ycombinator.com/item?id=26238410 https://news.ycombinator.com/item?id=26238410
- dsr_ 2y agoIt's not a straw man argument when the counterargument you propose is "actually, evading regulation is the point".
- deleted 2y ago[deleted]
- latchkey 2y agoIf a country does not have a functioning banking system, then it isn't evading regulation.
- akimbostrawman 2y agoForget evading regulation that has been possible with cash or gold since millennia. Its just sad that time and time again HN of all placed refuses to even consider that, yes magical p2p internet money does indeed have its uses outside of illegal activities.
- syspec 2y agoSomeone 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
- giantg2 2y agoInteresting. That would put their budget higher than the bottom 10% of state budgets.
- loeg 2y agoRevenue, not income.
- coldpie 2y agoIndeed, that is about the stated revenue on their Wikipedia page. Divided equally among their 20,000 employees, that comes to $350,000 per employee. Expenses like office space, taxes, fines/fees, inflated executive compensation, etc will bring that down quite a bit; though other sources of income will bring it back up too. Sounds reasonable.
- echoangle 2y agoI wonder what 20,000 Employees are doing there though. I know saying "I could do that with 10 people, what are they even doing" is a meme here, but I really can't make a good guess what the employees are actually doing. Risk assessment, looking for new investment opportunities, regulatory paperwork, marketing? 20,000 is a lot of people.
- omgJustTest 2y agoUnless 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.
- tobiasdorge 2y agoactively investing is 1) hard and 2) really just a waste of time considering the amounts most people are dealing with. I think it may have been from A Random Walk Down Wall Street but the general notion is something like this: You have a 500k portfolio, and you spend the average amount week managing your portfolio (12 hours). If you were to achieve a 2% alpha (which is considered insanely high for any actively managed fund, and almost impossible to replicate year after year), you have made an excess $10k over what you would have made investing your portfolio in a benchmark. On an hourly basis that's about $16 per hour spent... you could get more reliable income working at a gas station in California. And of course, most people are not investing $500k, the vast majority of day traders are probably pulling their hair out managing <$100k...
- bluGill 2y agoThe counter is smaller returns are easier for small investors. If you are a large investor just the act of buying stock changes the price.
- frognumber 2y agoI'll be contrarian. The general wisdom is hold the fund with the lowest fee structure. However, if the fee structure is 0.07%, that's $70/year / 100k invested. Even if it's 0.44%, you're talking about $440. The fees on most funds are small enough now to not matter much. It's worth shopping for lower-fee funds, but the more you go below 0.5%, the less it matters. If I save $500 per year for 50 years, that's $25k+interest, which is kind of the breakpoint of where it has practical impact on e.g. when I can retire.
- guntars 2y agoWith 7% interest it’s over 200k.
- pinkmuffinere 2y agoSure but that’s an order of magnitude above the numbers the parent is comparing? A 7% fee is certainly crazy, agreed with you there
- HDThoreaun 2y agoNo. https://www.wolframalpha.com/input?i=500*sum+1.07%5Ex+from+0+to+50 https://www.wolframalpha.com/input?i=500*sum+1.07%5Ex+from+0...
- frognumber 2y agoguntars did the amortization on $25k growing with interest (not fees). In other words, the claim is that 0.5% can be significant. Which is true. When I did the math with my life savings, 0.5% was about the breakpoint where things become significant. $200k would be more significant, so I suspect when I did the math properly, I was expecting to retire in less than 50 years. In 50 years, I'll likely be dead.
- pinkmuffinere 2y agoAh I see, the 7% yearly interest on the 0.5% fee can add up to be significant. That is a good point, good job @guntars
- Temporary_31337 2y agoThe only concern now is whether the indexes keep growing.
- b8 2y agoI switched from VTI to ITOT, because Vanguard's actions recently have been drifting away from it's founders. This inspires confidence, but I'm still wary. VTI is too expensive compared to ITOT. Fidelity doesn't have any ETFs listed on the Bogleheads website either [0]. 0. https://www.bogleheads.org/wiki/Three-fund_portfolio https://www.bogleheads.org/wiki/Three-fund_portfolio
- EVa5I7bHFq9mnYK 2y agoFees are good but I am concerned about too much correlation in the markets, caused by index funds. Basically everyone holds the same assets.
- layer8 2y agoAny imbalance should be easily exploitable by market players, so I would think it should be self-correcting. Also, worldwide there are quite different preferences in which indexes to hold, so there is some variation.
- aantix 2y agoFeels so strange that the average investor can't outperform an index fund with low management fees. A small investor is so agile - they can move in and out of positions. Why that agility can't be utilized to outperform a slow moving index fund, long-term?
- echoangle 2y agoProbably because no matter how agile you are, you'll never be more agile than the market. And being much slower isn't worse than being a little slower.
- WXLCKNO 2y agoDoes average investor here imply someone who's educated on the topic and knows what he's doing? And you're also saying investor, not trader. So moving in and out quickly doesn't matter as much if we're talking about mid to long term holds. It also makes sense that those with the largest edge in decision making for trades would collect most of the money.
- Maxatar 2y agoIt should not come as a surprise. While it's a bit of a simplification, index funds are effectively a representation of the average surviving investor...that is among all investors, index funds are the average of those who have not yet gone broke. The investors who have gone broke get culled out. So it should not at all be surprising that index funds perform better than the average investor. Furthermore, as far as agility is concerned, it doesn't play much of a role in the market. Almost all gains in the stock market over the course of a year come from a handful of days. For example in 2024, just 9 days account for the entire yearly gains.
- paulpauper 2y agoSome can. I have done well with leveraged tech funds.
- aantix 2y agoIs TQQQ a long-term holding? You could stomach the 80% draw down?
- websap 2y agoWhat does this mean for folks like me who buy Vanguard ETFs through Robinhood. The Vanguard UI / UX is absolutely terrible. Opening the website instantly transports me to 2002.
- qntty 2y agoI see several people complaining about this in this thread. Are you talking about their old interface or the new one they released a couple years ago? I find their new one to be decent. It's a little complicated sometimes, but I think it's hard to build a site that allows you to do so many things without being a little complicated.
- travisr 2y agoThe fees will be the same regardless of where you buy Vanguard funds.
- noveltyaccount 2y agoI'm a big fan of Vanguard, but if anyone is looking for competitively-priced funds from other issuers, check out - iShares Core (Blackrock) https://www.ishares.com/us/strategies/core-etfs https://www.ishares.com/us/strategies/core-etfs - SPDR Portfolio (State Street) https://www.ssga.com/us/en/individual/fund-finder https://www.ssga.com/us/en/individual/fund-finder - Schwab Select (includes in-house and third-party) https://www.schwab.com/research/etfs/tools/select-list https://www.schwab.com/research/etfs/tools/select-list
- hassleblad23 2y agoWhich of these do you use personally?
- noveltyaccount 2y agoA mix. For a given asset class I look at expense ratios and underlying indexes.
- vanrohan 2y agoI wish there can be more focus on the voting rights for passive funds. Investors are concentrating voting power with these fund managers, just giving away their voting rights for free. I'd like to see better investor voting management systems become more available for "pass through" voting for passive fund investors. [1] https://vanderwalt.de/blog/etf-vs-direct-indexing-investing-voting https://vanderwalt.de/blog/etf-vs-direct-indexing-investing-...
- bluGill 2y agoIt isn't possible to have an informed vote for the 500 companies in a S&P index fund and still have a life. I probably have an informed opinion on the company I work for - but I don't have enough shares to matter. The other 499 I know nothing about.
- vanrohan 2y agoIndividually we don't have significant shares, but aggregate it up to BlackRock / Vanguard level, then there is real influence. What is that influence worth? that influence given to the fund manager should be priced correctly. I agree, you probably dont want to have to vote on 500 companies, but to start with it should be an "opt out" decision if you don't care. Alternatively you could allocate your votes to a proxy entity that aggregates like minded investors votes.
- samus 2y agoHaving voting rights kind of goes against the point of tracking an index though. Better invest in ESG funds or something like that. And for funds that use synthetic replication there is nothing to vote on in the first place.
- vanrohan 2y ago> Having voting rights kind of goes against the point of tracking an index though. Not sure I follow how voting rights goes against the point of tracking an index? I'd say the value of the index implicitly prices in the value of the voting rights in the constituents. So if your index does not contain the voting rights, should the index price not be different? > And for funds that use synthetic replication there is nothing to vote on in the first place. There are all kinds of funds, of course when it's 100% synthetic then so be it. But if it holds a representitive sample of Russell 3000, then those votes count.
- nly 2y agoNot for UK investors apparently.