4 ms·

I hate the way Vanguard UK customers subsidize the US business (Fees are lower for US customers than UK ones on comparable funds) They aren't the cheapest anym

by nly 7mo ago

I hate the way Vanguard UK customers subsidize the US business (Fees are lower for US customers than UK ones on comparable funds) They aren't the cheapest anymore in almost every category, but their brand recognition has exploded here in recent years.

benjaminklick 7mo ago
Damn, what?! I didn't know the UK rates were higher. But yeah the old Vanguard brand that Bogle built is strong.
ta9000 7mo ago
Do you have any evidence that they’re subsidizing US customers? It’s possible the fees are higher in the UK due to it being more expensive to operate the funds.
- nly 7mo ago
  Most of their funds are incorporated in Ireland (the UK doesn't have native ETFs, they're all European but can be listed on the LSE) Investors in the UK are not partners in Vanguards mutual structure, and Vanguards UK platform ("Vanguard Investor") is not run by Vanguard but by a third party (FNZ, a New Zealand fintech). OCF for VT, a global equity index ETF in the US, is 0.06% UK equivalent (the Global All Cap Index Fund, or perhaps the VWRP All World ETF) is 0.23% and 0.19% respectively, and the latter excludes small caps and both have fewer holdings than VT Invesco's All World ETF in the UK, tracking the same index is 0.15% and HSBC have an index fund tracking the same index also at 0.13% Vanguard UK have a 0.15% platform fee whereas the best UK alternatives are completely free. Vanguard UK recently introduced a minimum nominal platform fee on top which screwed over small investors. Vanguard are no longer cheap and not on our side.
  - ta9000 7mo ago
    Thanks. Are you sure the cost of the fund is higher because it’s a fund and not an ETF like VT? The platform fee seems strange, but I wonder if other companies collect that fee somewhere else?
    - nly 7mo ago
      There are no practical differences between funds and ETFs in the UK, except the fact that the latter are live quoted. Mutual funds are cheap and have no tax disadvantages for us. In fact, outside of tax sheltered accounts, mutual funds are a lot easier to manage for tax purposes. No, Vanguard just think it's fine to charge us 4x as much VWRP, which I mentioned, is also an ETF
      - ta9000 7mo ago
        Very interesting. Thanks for the information!

by nly 7mo ago

benjaminklick 7mo ago

Damn, what?! I didn't know the UK rates were higher. But yeah the old Vanguard brand that Bogle built is strong.

ta9000 7mo ago

Do you have any evidence that they’re subsidizing US customers? It’s possible the fees are higher in the UK due to it being more expensive to operate the funds.

nly 7mo ago
Most of their funds are incorporated in Ireland (the UK doesn't have native ETFs, they're all European but can be listed on the LSE) Investors in the UK are not partners in Vanguards mutual structure, and Vanguards UK platform ("Vanguard Investor") is not run by Vanguard but by a third party (FNZ, a New Zealand fintech). OCF for VT, a global equity index ETF in the US, is 0.06% UK equivalent (the Global All Cap Index Fund, or perhaps the VWRP All World ETF) is 0.23% and 0.19% respectively, and the latter excludes small caps and both have fewer holdings than VT Invesco's All World ETF in the UK, tracking the same index is 0.15% and HSBC have an index fund tracking the same index also at 0.13% Vanguard UK have a 0.15% platform fee whereas the best UK alternatives are completely free. Vanguard UK recently introduced a minimum nominal platform fee on top which screwed over small investors. Vanguard are no longer cheap and not on our side.
- ta9000 7mo ago
  Thanks. Are you sure the cost of the fund is higher because it’s a fund and not an ETF like VT? The platform fee seems strange, but I wonder if other companies collect that fee somewhere else?
  - nly 7mo ago
    There are no practical differences between funds and ETFs in the UK, except the fact that the latter are live quoted. Mutual funds are cheap and have no tax disadvantages for us. In fact, outside of tax sheltered accounts, mutual funds are a lot easier to manage for tax purposes. No, Vanguard just think it's fine to charge us 4x as much VWRP, which I mentioned, is also an ETF
    - ta9000 7mo ago
      Very interesting. Thanks for the information!