Vanguard Selling Hits South Korean Stocks

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Vanguard Selling Hits South Korean Stocks

Postby NamedAfterThoreau » Fri Apr 05, 2013 4:50 pm

Interesting article about the state of the FTSE South Korea migration. I thought much of the migration would be in-house exchanges between the developed market indexes and the emerging market indexes.

Vanguard Selling Hits South Korean Stocks
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Another Total Market Index Fund advantage.

Postby Taylor Larimore » Fri Apr 05, 2013 5:13 pm

NamedAfterThoreau wrote:Interesting article about the state of the FTSE South Korea migration. I thought much of the migration would be in-house exchanges between the developed market indexes and the emerging market indexes.

Vanguard Selling Hits South Korean Stocks

NamedAfterThoreau:
This article illustrates three advantages of total market index funds: No "Market Impact" costs when securities are bought and sold in large quantities and also no unnecessary "Capital-Gain" or "Commission" costs.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
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Re: Vanguard Selling Hits South Korean Stocks

Postby gkaplan » Fri Apr 05, 2013 7:10 pm

Since presumably the Vanguard Pacific Stock Index Fund is buying Korean stocks, it seems like it's a wash.
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Re: Vanguard Selling Hits South Korean Stocks

Postby Scooter57 » Fri Apr 05, 2013 8:40 pm

The emerging markets fund is far larger than the other funds you cite. EM was very hot until very recently, while Developed Markets has been in the doldrums since 2008, driving away all but the most hardcore buy and hold types. Pacific Stock Index is full of Japanese stocks, again seen as poison. So there just isn't enough money to buy those stocks for the small funds.

EM has $76 billion in assets. DM $12 billion. Pacific Index has $4 billion.
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Re: Vanguard Selling Hits South Korean Stocks

Postby NamedAfterThoreau » Fri Apr 05, 2013 10:25 pm

Scooter57 wrote:The emerging markets fund is far larger than the other funds you cite. EM was very hot until very recently, while Developed Markets has been in the doldrums since 2008, driving away all but the most hardcore buy and hold types. Pacific Stock Index is full of Japanese stocks, again seen as poison. So there just isn't enough money to buy those stocks for the small funds.

EM has $76 billion in assets. DM $12 billion. Pacific Index has $4 billion.


I meant developed market "indexes" as a generic term, which would include Tax Managed International in there. But, you're right, for the funds that are undergoing conversion, there's less than half the assets on the developed market side as the EM side. Given South Korea is also a much bigger percentage of the EM fund than it will be in the developed market funds (about 14% vs. 4%), I guess that means a large amount of net sales.

By the way, you know Vanguard is doing well when $12 billion is a "small" fund :happy
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Re: Vanguard Selling Hits South Korean Stocks

Postby Scooter57 » Sat Apr 06, 2013 12:03 pm

This thread points up the huge impact that Vanguard's strategic moves have on the markets.

When I was researching individual small cap and mid cap stocks I was struck by how much of their stock was held by Vanguard's cap size funds.
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