Why no Admiral shares on all funds?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
ronin
Posts: 205
Joined: Wed Apr 22, 2009 9:17 pm

Why no Admiral shares on all funds?

Post by ronin »

Any idea why Vanguard doesn't offer Admiral shares on all their funds (at least not he funds-of-funds) especially when they offer an EFT class? Small Cap Value comes to mind as an example.

Cheers!
livesoft
Posts: 86076
Joined: Thu Mar 01, 2007 7:00 pm

Post by livesoft »

I don't know, but I would ask the question differently: Why does Vanguard even have Investor shares on any funds?

It must cost a ton of money to keep the share classes separated, to have multiple instances of the same fund on the web site, to have all that extra time, effort, and ink going into the prospectuses. They have to spend extra time training their Crew about the differences, the expense ratios, the minimums, blah, blah, blah, and train all their clients, too. And all the extra phone calls about "When are you going to switch my shares to Admiral?" Etc.

I'd ditch the Flapshig status as well.

Note to Vanguard folks: K.I.S.S.!!!
Wiki This signature message sponsored by sscritic: Learn to fish.
chipmonk
Posts: 635
Joined: Wed Mar 09, 2011 3:32 pm
Location: PDX

Post by chipmonk »

livesoft wrote:I don't know, but I would ask the question differently: Why does Vanguard even have Investor shares on any funds?

It must cost a ton of money to keep the share classes separated, to have multiple instances of the same fund on the web site, to have all that extra time, effort, and ink going into the prospectuses. They have to spend extra time training their Crew about the differences, the expense ratios, the minimums, blah, blah, blah, and train all their clients, too. And all the extra phone calls about "When are you going to switch my shares to Admiral?" Etc.

I'd ditch the Flapshig status as well.

Note to Vanguard folks: K.I.S.S.!!!
Interesting... I never thought of it like this. You make a good point!

Apparently, in the early 19th century in England the postal service charged different amounts to send letters to different parts of the country based on the geographic distance between the endpoints. Postal reformers realized that much of the cost of postage was going to the administrative nightmare of figuring out how much was owed for each piece of mail, rather than actually transporting it. After reforms, postage was based on weight rather than distance, and the price dramatically decreased. Rowland Hill led these reforms.

Maybe Vanguard could decrease expenses for *everyone* (both investor and admiral shareholders) by doing something similar. Then again, I'd guess they have some very smart people working there and have already done similar calculations :)
User avatar
pteam
Posts: 419
Joined: Wed Mar 17, 2010 2:27 am

Post by pteam »

chipmonk wrote:
Apparently, in the early 19th century in England the postal service charged different amounts to send letters to different parts of the country based on the geographic distance between the endpoints. Postal reformers realized that much of the cost of postage was going to the administrative nightmare of figuring out how much was owed for each piece of mail, rather than actually transporting it. After reforms, postage was based on weight rather than distance, and the price dramatically decreased. Rowland Hill led these reforms.
On another note, the postal service is now billions of dollars in debt...
RadAudit
Posts: 4387
Joined: Mon May 26, 2008 10:20 am
Location: Second star on the right and straight on 'til morning

Post by RadAudit »

I don't know either; but, I've got a few ideas.

I assume VG offers ETFs because it has some benefit to the fund - higher profitability and / or over all lowering of costs.

I would guess they don't offer Admiral shares on every fund because of the economies of scale of handling the necessary paperwork for the investor isn't justified by either / or the size of the individual account or the size of the fund.
FI is the best revenge. LBYM. Invest the rest. Stay the course. Die anyway. - PS: The cavalry isn't coming, kids. You are on your own.
Post Reply