Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Post Reply
Topic Author
cb474
Posts: 905
Joined: Tue Jan 19, 2010 5:32 am

Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by cb474 »

I just saw that the expense ratio on VBR/VSIAX, Vanguard's small cap value fund, has gone up from .10% to .12%. (Not sure what, if any, change there was for the investor shares.)

That surprised me. I haven't seen the ER on a Vanguard fund go up before. It's not much of a difference, but still not the direction one is looking for. I wonder what happened with the fund to cause this?
User avatar
JoMoney
Posts: 16260
Joined: Tue Jul 23, 2013 5:31 am

Re: Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by JoMoney »

Vanguard wrote: https://personal.vanguard.com/us/insigh ... ios-062013
Unlike other mutual fund providers, Vanguard offers its funds "at cost." That means shareholders pay Vanguard only what it costs to manage a fund. Nothing more.
It would not be the first time ER's have gone up. In 2009 ER's on the Vanguard 500 fund went from (0.15% Investor shares, .07% Admiral) to (.18% and .09%).
Vanguard wrote:...if fund assets decline—as they did during the bear market from late 2007 to March 2009—fixed costs represent a larger slice of fund assets, driving up the expense ratio.
Which explains the 2009 situation, and soon after they did reduce the minimum balance required for Admiral class shares to a $10k minimum, and eventually the ER started being reduced again.

But this doesn't seem to be the case with the VBR fund:
As of 03/31/2014 Fund total net assets = $12.9 billion
At December 31, 2012, net assets = $7.8 billion ... So I don't think it's a matter of fewer assets covering a larger chunk of fixed costs in this funds case.

Here's an article about various funds with ER changes in April, but the Small-Cap Value fund is not on the list:
https://personal.vanguard.com/us/insigh ... ges-042014
I would hope/expect Vanguard will make some statement as to why it changed in this fund shortly.
Last edited by JoMoney on Mon Apr 28, 2014 5:20 am, edited 2 times in total.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham
User avatar
in_reality
Posts: 4529
Joined: Fri Jul 12, 2013 6:13 am

Re: Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by in_reality »

cb474 wrote:I just saw that the expense ratio on VBR/VSIAX, Vanguard's small cap value fund, has gone up from .10% to .12%. (Not sure what, if any, change there was for the investor shares.)

That surprised me. I haven't seen the ER on a Vanguard fund go up before. It's not much of a difference, but still not the direction one is looking for. I wonder what happened with the fund to cause this?
In April 2013, they changed indexes from MSCI to CRSP. I believe the coverage is different and perhaps the resulting operating costs are too.

Hmmn, but well maybe that isn't it. I was thinking CRSP dipped further into infrequently traded stocks but that doesn't appear to be the case. Nor do there appear to be major style differences. http://www.forbes.com/sites/rickferri/2 ... p-shuffle/
Last edited by in_reality on Mon Apr 28, 2014 7:59 am, edited 1 time in total.
larryswedroe
Posts: 16022
Joined: Thu Feb 22, 2007 7:28 am
Location: St Louis MO

Re: Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by larryswedroe »

Trading costs should show up in returns, not fund expenses
Only thing I can think of is MSCI charges higher fees than CRSP does (if they charge anything) to use their indices
Larry
KyleAAA
Posts: 9498
Joined: Wed Jul 01, 2009 5:35 pm
Contact:

Re: Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by KyleAAA »

Maybe Vanguard just gave everybody a raise? Reported ERs are just a snapshot in time. I wouldn't read anything into such a small change.
User avatar
ResearchMed
Posts: 16795
Joined: Fri Dec 26, 2008 10:25 pm

Re: Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by ResearchMed »

The ER for the Small Cap ETF just went *down* today from .10% to .09%.

RM
User avatar
kenyan
Posts: 3015
Joined: Wed Jan 12, 2011 11:16 pm

Re: Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by kenyan »

cb474 wrote: (Not sure what, if any, change there was for the investor shares.)
Looks like Investor Shares went from 24 to 27 basis points. Does matter for those who don't have access to preferred share classes in due to retirement plan options.
Retirement investing is a marathon.
larryswedroe
Posts: 16022
Joined: Thu Feb 22, 2007 7:28 am
Location: St Louis MO

Re: Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by larryswedroe »

My colleague Kevin Grogan (and co author of my new book) added this when I asked him about it--he's our main contact with Vanguard
They switched to CRSP last year as a result of MSCI wanting to increase their fees. If I recall correctly, either one would've meant higher fees but CRSP was lower and was willing to sign a longer-term agreement.
berntson
Posts: 1366
Joined: Mon Oct 29, 2012 12:10 pm

Re: Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by berntson »

The ER went down to .09% for every Vanguard style fund, except Vanguard value, which went up to .12%. I can't believe that CSRP charges more for their small value index than for their small growth index.

I wonder if there is an error in Vanguard's system somewhere? Especially since no one has found an announcement about the higher fee.
User avatar
Ever Ready
Posts: 317
Joined: Sat Feb 24, 2007 2:21 pm
Location: DC metro

Re: Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by Ever Ready »

My account showed a note that VTSAX (TSM Admiral) went from .06% to .05%. I thought it was already .05%.
It also showed thew change in VSIAX from .10% to .12%

Their most recent article on 4/28/14 shows otherwise:
https://personal.vanguard.com/us/insigh ... ges-042014
Frans
Posts: 256
Joined: Wed Feb 12, 2014 5:25 pm

Re: Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by Frans »

It appears that there is no consistency to what Vanguard states the ER for small-cap value funds to be. Why is that?
Geologist
Posts: 3056
Joined: Fri Jan 02, 2009 6:35 pm

Re: Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by Geologist »

cb474 wrote:I just saw that the expense ratio on VBR/VSIAX, Vanguard's small cap value fund, has gone up from .10% to .12%. (Not sure what, if any, change there was for the investor shares.)

That surprised me. I haven't seen the ER on a Vanguard fund go up before. It's not much of a difference, but still not the direction one is looking for. I wonder what happened with the fund to cause this?
Let's not get carried away about the real cost in dollars and cents. This change amounts to 20 cents per $1000 per year and could be smaller (suppose the expense ratio was 0.1047% and is now 0.1151%). It is apparently larger than just a simple roundoff error (as could be for a change between 0.06% to 0.05%), but could still be some marginal change.

Once expense ratios get as small as some of Vanguard's, then changes are really not meaningful.
stlutz
Posts: 5585
Joined: Fri Jan 02, 2009 12:08 am

Re: Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by stlutz »

The prospectus actually says .09%. Once they fix their website, I assume we'll see a new thread tomorrow about how the ER went down. :D
User avatar
Kalo
Posts: 543
Joined: Sat May 25, 2013 1:01 pm

Re: Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by Kalo »

Ever Ready wrote:My account showed a note that VTSAX (TSM Admiral) went from .06% to .05%. I thought it was already .05%.
It also showed thew change in VSIAX from .10% to .12%

Their most recent article on 4/28/14 shows otherwise:
https://personal.vanguard.com/us/insigh ... ges-042014
I got the same message on my Balances and Holdings page (about the VTI going from .06 to .05) even though it was already at .05. I did not get any message about VXUS/VTIAX, but it looks to me like it went from .16 to .14.

Strange.

Kalo
"When people say they have a high risk tolerance, what they really mean is that they are willing to make a lot of money." -- Ben Stein/Phil DeMuth - The Little Book of Bullet Proof Investing.
User avatar
asset_chaos
Posts: 2629
Joined: Tue Feb 27, 2007 5:13 pm
Location: Melbourne

Re: Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by asset_chaos »

I recall in the fund's latest annual report that a footnote reported the actual opeating expenses to be 9 bp, lower than the headline 10. So I'm doubly surprised because the 9 to 12 rise seems to imply Vanguard expects expenses to be a third higher in the coming year than last year. Regardless of the headline expense ratio number, I anticipate Vanguard charging whatever the costs are for the fund and giving me a fair deal. But it would be nice if they shared more explicitly the reasons for the anticipated higher costs.
Regards, | | Guy
Topic Author
cb474
Posts: 905
Joined: Tue Jan 19, 2010 5:32 am

Re: Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by cb474 »

Thanks for all the responses. As others note, my attention was drawn to the change in ER on the balance and holdings page of the website, where a little note popped up indicating that the ER on VSIAX/VBR had changed (gone up), as well as on VTSAX (went down).

*
larryswedroe wrote:My colleague Kevin Grogan (and co author of my new book) added this when I asked him about it--he's our main contact with Vanguard
They switched to CRSP last year as a result of MSCI wanting to increase their fees. If I recall correctly, either one would've meant higher fees but CRSP was lower and was willing to sign a longer-term agreement.
Yes, that was my understanding at the time of the switch from MSCI to CRSP, that one of the reasons was CRSP would allow for lower expenses. But since that was back in April, 2013, wouldn't we have seen any changes to the ER due to the switch to CRSP at that time? Why is it only showing up now, a year later?

I realize the move from .10% to .12% is not much, but it does seem like it would be nice for Vanguard to be more specific about the actual reasons for a particular change. Above people cited Vanguard's explanation on their website, which I had already seen in a link provided with the notice that the ER on VSIAX/VBR had changed. But that explanation was just a general explanation to cover all circumstances, about why ERs go up and down. It doesn't really explain this somewhat surprising move up for VSIAX/VBR in any very coherent or satisfying way.

Anyway, thanks ago for the reponses and thoughts on the matter.
Topic Author
cb474
Posts: 905
Joined: Tue Jan 19, 2010 5:32 am

Re: Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by cb474 »

berntson wrote:The ER went down to .09% for every Vanguard style fund, except Vanguard value, which went up to .12%. I can't believe that CSRP charges more for their small value index than for their small growth index.

I wonder if there is an error in Vanguard's system somewhere? Especially since no one has found an announcement about the higher fee.
stlutz wrote:The prospectus actually says .09%. Once they fix their website, I assume we'll see a new thread tomorrow about how the ER went down. :D
Hmm, strangely when I looked tonight the ER for VSIAX/VBR now shows as .09%. And there's no message about the ER going down. The website definitely told me yesterday that it was going up from .10% to .12%. Maybe it was an error. Odd. And not entirely confidence inspiring.
Rocketfella
Posts: 11
Joined: Wed Mar 19, 2014 10:56 am

Re: Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by Rocketfella »

The real reason for the increase in ratio is a change in SEC reporting requirements. The actual expense has not changed and returns going forward should be the same as before for many of the funds with increased expense ratio.

Some Vanguard funds invest in BDCs Business Development Companies. Greatly simplified these are similar to private equity companies that are open to the public to purchase.

SEC now requires that when the BDCs incur expenses that mutual funds and ETFs that own these report the BDC expenses as "acquired fund expenses" as they consider the BDC a type of fund.

Wiki article http://en.wikipedia.org/wiki/Business_D ... nt_Company

Vanguard explanation https://retirementplans.vanguard.com/VG ... enseRatios
red5
Posts: 798
Joined: Sun Apr 01, 2012 4:42 pm

Re: Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by red5 »

Kalo wrote:
I got the same message on my Balances and Holdings page (about the VTI going from .06 to .05) even though it was already at .05. I did not get any message about VXUS/VTIAX, but it looks to me like it went from .16 to .14.

Strange.

Kalo
I believe VTIAX was already .14, perhaps from at least February.

cb474 wrote: Hmm, strangely when I looked tonight the ER for VSIAX/VBR now shows as .09%. And there's no message about the ER going down. The website definitely told me yesterday that it was going up from .10% to .12%. Maybe it was an error. Odd. And not entirely confidence inspiring.
I experience the same thing (.10%, .12% and then .09%).
User avatar
House Blend
Posts: 4878
Joined: Fri May 04, 2007 1:02 pm

Re: Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by House Blend »

Rocketfella wrote:The real reason for the increase in ratio is a change in SEC reporting requirements. The actual expense has not changed and returns going forward should be the same as before for many of the funds with increased expense ratio.

Some Vanguard funds invest in BDCs Business Development Companies. Greatly simplified these are similar to private equity companies that are open to the public to purchase.

SEC now requires that when the BDCs incur expenses that mutual funds and ETFs that own these report the BDC expenses as "acquired fund expenses" as they consider the BDC a type of fund.

Wiki article http://en.wikipedia.org/wiki/Business_D ... nt_Company

Vanguard explanation https://retirementplans.vanguard.com/VG ... enseRatios
This change happened several years ago.

In the meantime, last year, Vanguard switched the Small Value Index Fund to a new index that doesn't include BDCs (or at least, not enough to have a measurable effect on their SEC-regulated reporting of the ER).

And in fact, as noted several times since the start of this thread, the ER actually *decreased* this year.

It decreased even more substantially last year from 0.21% to 0.10% (for Admiral shares) when it shed the BDC related stocks. But this was an artifact of SEC-enforced reporting requirements, and not due to an actual decrease in operating expenses or increase in AUM.
Rocketfella
Posts: 11
Joined: Wed Mar 19, 2014 10:56 am

Re: Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by Rocketfella »

That's interesting because Vanguard states as of April 30, 2014 states that the increase is because of BDCs. It would be nice if someone from Vanguard explained the increase.

https://advisors.vanguard.com/VGApp/iip ... StfMgIWTZR
User avatar
Random Musings
Posts: 6770
Joined: Thu Feb 22, 2007 3:24 pm
Location: Pennsylvania

Re: Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by Random Musings »

Although the long-term trend has been our friend with respect to ER costs at Vanguard, and even though I try to get worked up about these 0.01-0.02% fluctuations, I just can't.

The low hanging fruit is gone, we are in the 8th inning of ER's.

RM
I figure the odds be fifty-fifty I just might have something to say. FZ
linenfort
Posts: 2241
Joined: Sat Sep 22, 2007 9:22 am
Location: #96151D

Re: Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by linenfort »

House Blend wrote:It decreased even more substantially last year from 0.21% to 0.10% (for Admiral shares) when it shed the BDC related stocks.
Yeah, that's what I remembered. So not that bad!
But this was an artifact of SEC-enforced reporting requirements, and not due to an actual decrease in operating expenses or increase in AUM.
Oh. Rats. :(
User avatar
House Blend
Posts: 4878
Joined: Fri May 04, 2007 1:02 pm

Re: Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by House Blend »

Rocketfella wrote:That's interesting because Vanguard states as of April 30, 2014 states that the increase is because of BDCs. It would be nice if someone from Vanguard explained the increase.

https://advisors.vanguard.com/VGApp/iip ... StfMgIWTZR
Pfft. This looks to me like more of the same sloppiness on Vanguard's part that people were talking about upthread. Everywhere else on the Vanguard site, including the Prospectus, seems to (now) say that VSIAX has an ER of 0.09%, not 0.12%.
Topic Author
cb474
Posts: 905
Joined: Tue Jan 19, 2010 5:32 am

Re: Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by cb474 »

House Blend wrote:
Rocketfella wrote:That's interesting because Vanguard states as of April 30, 2014 states that the increase is because of BDCs. It would be nice if someone from Vanguard explained the increase.

https://advisors.vanguard.com/VGApp/iip ... StfMgIWTZR
Pfft. This looks to me like more of the same sloppiness on Vanguard's part that people were talking about upthread. Everywhere else on the Vanguard site, including the Prospectus, seems to (now) say that VSIAX has an ER of 0.09%, not 0.12%.
Yeah, that's more weirdness. That supposed "final update" on what's going on with the expense ratio changes, dated 4/30, says that the ER on VSIAX/VBR is now .12%. But the balances and holdings pages of my account still says the ER on that fund is .09%.
User avatar
stoub
Posts: 85
Joined: Thu Jan 27, 2011 5:58 pm

Re: Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by stoub »

cb474 wrote:
House Blend wrote:
Rocketfella wrote:That's interesting because Vanguard states as of April 30, 2014 states that the increase is because of BDCs. It would be nice if someone from Vanguard explained the increase.

https://advisors.vanguard.com/VGApp/iip ... StfMgIWTZR
Pfft. This looks to me like more of the same sloppiness on Vanguard's part that people were talking about upthread. Everywhere else on the Vanguard site, including the Prospectus, seems to (now) say that VSIAX has an ER of 0.09%, not 0.12%.
Yeah, that's more weirdness. That supposed "final update" on what's going on with the expense ratio changes, dated 4/30, says that the ER on VSIAX/VBR is now .12%. But the balances and holdings pages of my account still says the ER on that fund is .09%.
Looking at that page now, the "final update" was updated 5/1 and says the ER on VSIAX/VBR is .09%.
Topic Author
cb474
Posts: 905
Joined: Tue Jan 19, 2010 5:32 am

Re: Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by cb474 »

stoub wrote:
cb474 wrote:
House Blend wrote:
Rocketfella wrote:That's interesting because Vanguard states as of April 30, 2014 states that the increase is because of BDCs. It would be nice if someone from Vanguard explained the increase.

https://advisors.vanguard.com/VGApp/iip ... StfMgIWTZR
Pfft. This looks to me like more of the same sloppiness on Vanguard's part that people were talking about upthread. Everywhere else on the Vanguard site, including the Prospectus, seems to (now) say that VSIAX has an ER of 0.09%, not 0.12%.
Yeah, that's more weirdness. That supposed "final update" on what's going on with the expense ratio changes, dated 4/30, says that the ER on VSIAX/VBR is now .12%. But the balances and holdings pages of my account still says the ER on that fund is .09%.
Looking at that page now, the "final update" was updated 5/1 and says the ER on VSIAX/VBR is .09%.
Awesome. I love how they had to update the final update. But I do wonder if that will be the final update to the final update?

More seriously, it is not really good protocol to issue a "final upate," date it, then go ahead an change it later without any note that is has been changed. Of course, websites allow for this sort of invisible editing. But it just creates confusion.

This is a lot like what happened with the heartbleed bug, where Vanguard kept changing their statement about whether or not they were vulnerable, in their announcement on the website, without noting the changes; that left open the potential for different people to get different messages and think they had gotten "the" message. It is also similar in that Vanguard just started slapping stuff up on the website before they had the right information from whoever actually knew it.

In the case of the heartbleed bug, it's understandable somewhat (though not really excusable) that companies were caught off guard and scrambling to fix the problem and inform customers. In this case, it seems like it really should not have been a problem to know ahead of time what the new expense ratios would be and inform the people who manage the website in a timely manner.

Something like this happening once is understandable. Twice in such a similar way really reinforces the sense, for me, that at least as far as the website goes, at Vanguard the right hand doesn't know what the left hand is doing. I'm pretty unimpressed. My bank is way better at this kind of thing.
YDNAL
Posts: 13774
Joined: Tue Apr 10, 2007 4:04 pm
Location: Biscayne Bay

Re: Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by YDNAL »

cb474 [OP] » Mon Apr 28, 2014 4:50 am

I just saw that the expense ratio on VBR/VSIAX, Vanguard's small cap value fund, has gone up from .10% to .12%. (Not sure what, if any, change there was for the investor shares.)

That surprised me. I haven't seen the ER on a Vanguard fund go up before. It's not much of a difference, but still not the direction one is looking for. I wonder what happened with the fund to cause this?
Just got back from my favorite fishing hole and looked to see why all the commotion. :? I guess:
Vanguard wrote:Updated 5/1 to correct the effective date of the expense ratio changes for the Extended Market Index Fund (all share classes, including the ETF) to 4/28, as well as to correct that the expense ratios of the Small-Cap Value Index Fund (all share classes, including the ETF) did not increase. For Small-Cap Value’s Admiral and ETF Shares, the expense ratio declined. For Small-Cap Value’s Investor and Institutional Shares, the expense ratio did not change.
https://advisors.vanguard.com/VGApp/iip ... StfMgIWTZR
My online statement at year end (2013) says VSIAX at 0.10% ER. Online now it says 0.09%.

[OT comments removed by admin LadyGeek]
Landy | Be yourself, everyone else is already taken -- Oscar Wilde
Topic Author
cb474
Posts: 905
Joined: Tue Jan 19, 2010 5:32 am

Re: Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by cb474 »

YDNAL wrote:[OT comments removed by admin LadyGeek]
1) I was just curious what was going on with the expense ratio.

[Response to OT comments removed by admin LadyGeek]

4) I think it matters that lately Vanguard can't seem to post accurate information on their website and has to keep revising it (while not acknowledging all of the revisions they've made).

[Response to OT comments removed by admin LadyGeek]
YDNAL
Posts: 13774
Joined: Tue Apr 10, 2007 4:04 pm
Location: Biscayne Bay

Re: Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by YDNAL »

cb474 wrote:[OT comments removed by admin LadyGeek]

4) I think it matters that lately Vanguard can't seem to post accurate information on their website and has to keep revising it (while not acknowledging all of the revisions they've made).
[Response to OT comments removed by admin LadyGeek]

Now, on topic, I looked at Vanguard for information and posted the link - since none was provided in the original post. The link summarized the issue raised - in the VERY FIRST paragraph - the same paragraph which you snipped from my post to respond above, among other things.
Vanguard wrote:Updated 5/1 to correct the effective date of the expense ratio changes for the Extended Market Index Fund (all share classes, including the ETF) to 4/28, as well as to correct that the expense ratios of the Small-Cap Value Index Fund (all share classes, including the ETF) did not increase. For Small-Cap Value’s Admiral and ETF Shares, the expense ratio declined. For Small-Cap Value’s Investor and Institutional Shares, the expense ratio did not change.
https://advisors.vanguard.com/VGApp/iip ... StfMgIWTZR
Landy | Be yourself, everyone else is already taken -- Oscar Wilde
stan1
Posts: 14246
Joined: Mon Oct 08, 2007 4:35 pm

Re: Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by stan1 »

Put it this way: do you want expenses at Vanguard to go up so they can hire more copy editors (probably attorneys) to review marketing material on their web sites? I don't. I've accepted that a certain number of errors come with low expenses, and have been with Vanguard for over 20 years so I've seen that they do eventually correct mistakes.
Warning: I am about 80% satisficer (accepting of good enough) and 20% maximizer
User avatar
LadyGeek
Site Admin
Posts: 95686
Joined: Sat Dec 20, 2008 4:34 pm
Location: Philadelphia
Contact:

Re: Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by LadyGeek »

I removed some off-topic comments. As a reminder, see: Forum Policy
"We expect this forum to be a place where people can feel comfortable asking questions and where debates and discussions are conducted in civil tones...

Attacks on individuals, insults, name calling, trolling, baiting or other attempts to sow dissension are not acceptable."
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.
User avatar
House Blend
Posts: 4878
Joined: Fri May 04, 2007 1:02 pm

Re: Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by House Blend »

cb474 wrote:Something like this happening once is understandable. Twice in such a similar way really reinforces the sense, for me, that at least as far as the website goes, at Vanguard the right hand doesn't know what the left hand is doing. I'm pretty unimpressed. My bank is way better at this kind of thing.
Yes. Beyond the issue that Vanguard seems to have quality control problems when it comes to the data they push out in articles, it would be easier to forgive if they would time stamp the articles.

And change the time stamp whenever an article is altered.

I first noticed this silent editing a few years ago when VG announced that Total International would switch to the FTSE Global All Cap index. In the article announcing the change on their website, they named the wrong benchmark. (As I recall, they named some other FTSE index, one that was not as broad.)

Some time later (12 hours, maybe?), perhaps after seeing a thread about it here on BH, the article was silently corrected.
Topic Author
cb474
Posts: 905
Joined: Tue Jan 19, 2010 5:32 am

Re: Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by cb474 »

YDNAL wrote:Now, on topic, I looked at Vanguard for information and posted the link - since none was provided in the original post. The link summarized the issue raised - in the VERY FIRST paragraph - the same paragraph which you snipped from my post to respond above, among other things.
Vanguard wrote:Updated 5/1 to correct the effective date of the expense ratio changes for the Extended Market Index Fund (all share classes, including the ETF) to 4/28, as well as to correct that the expense ratios of the Small-Cap Value Index Fund (all share classes, including the ETF) did not increase. For Small-Cap Value’s Admiral and ETF Shares, the expense ratio declined. For Small-Cap Value’s Investor and Institutional Shares, the expense ratio did not change.
https://advisors.vanguard.com/VGApp/iip ... StfMgIWTZR
The statement on Vanguard's site that you link to was not actually available when I started this thread. In addition the paragraph you refer to was added later to that statement to correct precisely the error that I noticed and which motivated me to start this thread. When that statement did become available, someone else provided the link to that statement in this thread and there was some discussion about it, including the way Vanguard keeps editing it and redating it (without noting the changes). You can find that discussion above, if you're interested.
Last edited by cb474 on Sun May 04, 2014 10:40 pm, edited 3 times in total.
Topic Author
cb474
Posts: 905
Joined: Tue Jan 19, 2010 5:32 am

Re: Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by cb474 »

House Blend wrote:
cb474 wrote:Something like this happening once is understandable. Twice in such a similar way really reinforces the sense, for me, that at least as far as the website goes, at Vanguard the right hand doesn't know what the left hand is doing. I'm pretty unimpressed. My bank is way better at this kind of thing.
Yes. Beyond the issue that Vanguard seems to have quality control problems when it comes to the data they push out in articles, it would be easier to forgive if they would time stamp the articles.

And change the time stamp whenever an article is altered.

I first noticed this silent editing a few years ago when VG announced that Total International would switch to the FTSE Global All Cap index. In the article announcing the change on their website, they named the wrong benchmark. (As I recall, they named some other FTSE index, one that was not as broad.)

Some time later (12 hours, maybe?), perhaps after seeing a thread about it here on BH, the article was silently corrected.
Yes, if they're going to make mistakes and edit things, it would be a lot better to note and date all the edits, so people can see what happened and not be confused about what was said when. It seems like Vanguard is more concerned about the sloppy appearance that might make, than about the clarity it would provide. Or maybe it's just incompetence on the part of whoever maintains the website. I don't really agree, as stan1 suggests, that it would cost more money to do a better job of this.
KyleAAA
Posts: 9498
Joined: Wed Jul 01, 2009 5:35 pm
Contact:

Re: Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by KyleAAA »

Silently revising mistakes on corporate websites is standard practice. Only in a journalistic context would you expect edits to be clearly called out. It's easy to forget these are press releases, nothing more, and press releases don't have to adhere to the same standard. Non-issue. Blogging isn't Vanguard's core competency, indexing is, and so long as they keep doing a great job running their index funds I couldn't care less about typos in a press release.
User avatar
House Blend
Posts: 4878
Joined: Fri May 04, 2007 1:02 pm

Re: Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by House Blend »

^Yes, they can post whatever nonsense they want. Who said they can't?

I'm not suggesting that edits be called out. I'm suggesting a timestamp on every article they post; no need to spell out any corrections. Easy to automate.

I'm also sure that Vanguard will never do this--I think at least we agree on that.

Yes it's an issue. A credibility issue.
KyleAAA
Posts: 9498
Joined: Wed Jul 01, 2009 5:35 pm
Contact:

Re: Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by KyleAAA »

House Blend wrote:^Yes, they can post whatever nonsense they want. Who said they can't?

I'm not suggesting that edits be called out. I'm suggesting a timestamp on every article they post; no need to spell out any corrections. Easy to automate.

I'm also sure that Vanguard will never do this--I think at least we agree on that.

Yes it's an issue. A credibility issue.
From what I can see, they do have a date on every article. It just doesn't seem to update when they make an edit, which strikes me as less confusing. Otherwise you'd confuse people into thinking an article written 3 years ago was released yesterday.
Topic Author
cb474
Posts: 905
Joined: Tue Jan 19, 2010 5:32 am

Re: Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by cb474 »

KyleAAA wrote:
House Blend wrote:^Yes, they can post whatever nonsense they want. Who said they can't?

I'm not suggesting that edits be called out. I'm suggesting a timestamp on every article they post; no need to spell out any corrections. Easy to automate.

I'm also sure that Vanguard will never do this--I think at least we agree on that.

Yes it's an issue. A credibility issue.
From what I can see, they do have a date on every article. It just doesn't seem to update when they make an edit, which strikes me as less confusing. Otherwise you'd confuse people into thinking an article written 3 years ago was released yesterday.
Actually, it's the opposite, at least on the statement in question. Every time they edited they changed the date to the date at the time of the edit. This obscured (completely effaced) the actual date on which the statement was first posted. It also obscured all the intervening edits. So they did exactly what you're saying would confuse people, a statement intially posted on April 30, now has a date of May 2 on it. Not a big difference in this case, but who knows with other articles and statements on Vanguard's website what the real intial posting dates were.

You may be right that silent edits are standard practice on corporate websites. I don't know. But I really don't see anything wrong with making the edits more transparent for the sake of clarity. And I don't think it would be any more work. In the end, to me, just because everyone does something confusing and lame isn't really an excuse. Vanguard could lead the way in transparency and honesty. That would seem to be in keeping with their brand and how they try to differentiate themselves from other mutual fund companies.
KyleAAA
Posts: 9498
Joined: Wed Jul 01, 2009 5:35 pm
Contact:

Re: Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by KyleAAA »

cb474 wrote: You may be right that silent edits are standard practice on corporate websites. I don't know. But I really don't see anything wrong with making the edits more transparent for the sake of clarity. And I don't think it would be any more work. In the end, to me, just because everyone does something confusing and lame isn't really an excuse. Vanguard could lead the way in transparency and honesty. That would seem to be in keeping with their brand and how they try to differentiate themselves from other mutual fund companies.
There's nothing "wrong" with it, I just don't see how it adds any value and by default, tasks that don't add value shouldn't be done.

There may even be technical reasons why it's always been done that way, so it might be more expensive than you'd think to change it. We don't really have enough information to speak about what may or may not be difficult and/or inexpensive for Vanguard to do.
Topic Author
cb474
Posts: 905
Joined: Tue Jan 19, 2010 5:32 am

Re: Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by cb474 »

KyleAAA wrote:
cb474 wrote: You may be right that silent edits are standard practice on corporate websites. I don't know. But I really don't see anything wrong with making the edits more transparent for the sake of clarity. And I don't think it would be any more work. In the end, to me, just because everyone does something confusing and lame isn't really an excuse. Vanguard could lead the way in transparency and honesty. That would seem to be in keeping with their brand and how they try to differentiate themselves from other mutual fund companies.
There's nothing "wrong" with it, I just don't see how it adds any value and by default, tasks that don't add value shouldn't be done.

There may even be technical reasons why it's always been done that way, so it might be more expensive than you'd think to change it. We don't really have enough information to speak about what may or may not be difficult and/or inexpensive for Vanguard to do.
What's wrong with it is all the confusion it creates, this initial discussion in this thread being an example. More egregiously, in the case of the heartbleed bug, where Vanguard did the same thing (posted a statement, kepting editing it, kept not noting the edits and therefore put out several different messages about whether or not Vanguard was at any point vulnerable to the bug, which different people saw at different times), in that case, in then end it was so clear the right hand did not know what the left hand was doing at Vanguard, that I had no faith the statements on Vanguard's websites about its vulnerability to the bug were accurate. Credibility matters, as House Blend said, and it's not always just an image/marketing issue.

As far as technical issues go, given that every cheap free blog out there would allow these kinds of edits, I find it hard to believe it is a technical problem on Vangaurd's end. In fact, the sort of silent edits that Vanguard already did, if you followed them, show that they could do the sort of more transparent edits I'm talking about. I'm talking about different content in the edits, not anything technically different from what Vanguard has already done. So I really don't buy the technical limitation claim.

As for cost, I think Vanguard is spending more time making mistakes and correcting them, than it would take to just do a better job in the first place. If the website people at Vanguard and the behind the scenes people with the correct information were communicating better, I think it would be more efficient and save money. Anyway, they are editing the statements; they're putting the time into it; it doesn't take more time to make deceptive edits than clear ones, they're just different. So I really don't buy the cost issue at all either.

I don't see the need (or benefit) of making up excuses for Vanguard. If they're doing something poorly or incompetently, then they need to deal with that.
KyleAAA
Posts: 9498
Joined: Wed Jul 01, 2009 5:35 pm
Contact:

Re: Vanguard's Small Cap Value Fund Expense Ratio Goes Up

Post by KyleAAA »

cb474 wrote: What's wrong with it is all the confusion it creates, this initial discussion in this thread being an example. More egregiously, in the case of the heartbleed bug, where Vanguard did the same thing (posted a statement, kepting editing it, kept not noting the edits and therefore put out several different messages about whether or not Vanguard was at any point vulnerable to the bug, which different people saw at different times), in that case, in then end it was so clear the right hand did not know what the left hand was doing at Vanguard, that I had no faith the statements on Vanguard's websites about its vulnerability to the bug were accurate. Credibility matters, as House Blend said, and it's not always just an image/marketing issue.

As far as technical issues go, given that every cheap free blog out there would allow these kinds of edits, I find it hard to believe it is a technical problem on Vangaurd's end. In fact, the sort of silent edits that Vanguard already did, if you followed them, show that they could do the sort of more transparent edits I'm talking about. I'm talking about different content in the edits, not anything technically different from what Vanguard has already done. So I really don't buy the technical limitation claim.

As for cost, I think Vanguard is spending more time making mistakes and correcting them, than it would take to just do a better job in the first place. If the website people at Vanguard and the behind the scenes people with the correct information were communicating better, I think it would be more efficient and save money. Anyway, they are editing the statements; they're putting the time into it; it doesn't take more time to make deceptive edits than clear ones, they're just different. So I really don't buy the cost issue at all either.

I don't see the need (or benefit) of making up excuses for Vanguard. If they're doing something poorly or incompetently, then they need to deal with that.
I don't quite understand what you mean when you say "transparent edits." Are you just saying they should put an "last edited on: " date at the bottom of the article? Of course they could do that. But the date at the top of the post would also be changed automatically, so those two values would always be the same without (likely) code changes so I don't see how it's helpful at all. If you're saying they should leave a list of edits on the bottom of the post, they could certainly do that, but I would argue strongly against it on usability grounds.

I just don't think transparency has much value in this case. The heartbleed situation was SLIGHTLY different, but not really, because in that situation a reasonable person would use 3rd party sources to check the sites they use, anyway. And of COURSE the right hand doesn't know what the left is doing. That's true at every company of any size all the time. The marketing and PR people don't know what's going on in engineering and probably vice versa. I understand your argument, but I just don't think it's a big deal. I don't even agree that what they are doing is poor or incompetent. In fact, I think they way they are doing thing is BETTER from a usability perspective than what you suggest, but that's a different argument entirely. Vanguard is good at indexing, and that's good enough for me.
Post Reply