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Vanguard funds are owned by the investors in those funds. The fees that they charge are to cover the expenses, not make profit for a private company. If they're
by mdasen 2y ago
Vanguard funds are owned by the investors in those funds. The fees that they charge are to cover the expenses, not make profit for a private company. If they're doing so well that the fees are brining in more money than they need, they lower the fees so that their owners (the investors in the funds) don't have to pay as much in fees.
Their business is doing so well that they can lower fees.
- latchkey 2y ago> Their business is doing so well that they can lower fees. The counter to that is that they are not doing so well, that they need to attract more investors.
- cbg0 2y agoYour counter assumes that it's one or the other, but there could be more reasons, such as doing well but looking to steal even more market share. At over $10 trillion AUM, it's hard to think that they're "not doing so well".
- latchkey 2y agoSo then why reduce fees now? Why not years ago? Are they just suddenly feeling that generous?
- toast0 2y agoVanguard has been reducing fees on a pretty regular basis. My assumption is that the corporate leaders go for a dip in the McDuck money pond every year, and when the level is too high that it risks overflowing, they adjust the fees down.
- wbl 2y agoI have heard from people who were contactors that everyone brings their lunch at Vanguard. No money pond here!
- giantg2 2y agoI doubt at that size you could attract enough new money to offset the reduced revenue from reducing fees on the existing $10T.