Vanguard Strikes Back With Lower Target-Date Fees

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Mel Lindauer
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Vanguard Strikes Back With Lower Target-Date Fees

Post by Mel Lindauer »

New institutional funds to cost 10 basis points; firm also boosts international stake of multiasset offerings.

http://news.morningstar.com/articlenet/ ... ?id=686660
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Silence Dogood
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Re: Vanguard Strikes Back With Lower Target-Date Fees

Post by Silence Dogood »

Dang, when I read the title I was hoping that they lowered the expense ratios for the regular (non-institutional shares) target retirement funds.
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Re: Vanguard Strikes Back With Lower Target-Date Fees

Post by LadyGeek »

Thanks to Morningstar and Investment News for combining 2 separate topics in one news article. Here's the Investment News release: In rare move, Vanguard beefs up international exposure in target date funds

We have two on-going threads, I moved a few posts around. Those wishing to discuss the international equity reallocation, go here: International increase in Target Retirement & LifeStrategy

Lower Target-Date fees (institutional only, BTW), post here.
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Dandy
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Re: Vanguard Strikes Back With Lower Target-Date Fees

Post by Dandy »

Not sure what impact, if any, it will have on non institutional funds.

But, clear and ongoing signal that while these type of allocation changes are not frequent they are not rare with Vanguard either. So, if you think you can buy a life Strategy or Target date fund and set it and forget it - you may wake up with a surprise.

Oh, I'm sure the Vanguard "experts" have a good reason for any changes - don't all people who design allocations. It is clear to me that these funds are not set it and forget it they are going to change on occasion to fit Vanguard's view of the investment landscape. That is ok but I don't know if that is what people signed up for.
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LAlearning
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Vanguard Lowers Target Funds ER%

Post by LAlearning »

Well, at least to institutional investors.... :twisted:

http://news.morningstar.com/articlenet/ ... 0&SR=Yahoo
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Re: Vanguard Strikes Back With Lower Target-Date Fees

Post by LadyGeek »

^^^ LAlearning - I moved your thread into here.
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Re: Vanguard Strikes Back With Lower Target-Date Fees

Post by SpringMan »

If these funds are like other Vanguard institutional funds, they will have a $5,000,000 minimum. Too rich for my blood. :(
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Re: Vanguard Strikes Back With Lower Target-Date Fees

Post by BogleMe »

But I believe within a 401K regular investors with modest contributions may be able to gain access. I have access to institutional shares of the S&P500 index fund in my company 401k; its current balance is ~$40,000.
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Re: Vanguard Strikes Back With Lower Target-Date Fees

Post by Gropes & Ray »

Lowering e/r = good.

Upping international allocation of equities to 40%? Dubious at best. I will find it hard to recommend target date funds in the future, even for the laziest of the lazy. My own allocation will remain at 25%.
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Re: Vanguard Strikes Back With Lower Target-Date Fees

Post by SpringMan »

BogleMe wrote:But I believe within a 401K regular investors with modest contributions may be able to gain access. I have access to institutional shares of the S&P500 index fund in my company 401k; its current balance is ~$40,000.
True, some folks are lucky enough to have access to Vanguard institutional funds in 401k retirement accounts.
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investorguy1
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Re: Vanguard Strikes Back With Lower Target-Date Fees

Post by investorguy1 »

Also says they are shift allocation International 30% changing to 40% and International bond going from 20% to 30%. For years I have felt that True indexing would be holding the world index and looks like they are moving closer to that.
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Re: Vanguard Strikes Back With Lower Target-Date Fees

Post by anotherITguy »

So I'm guessing this means no change in expense ratio in my measly IRA :confused
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Re: Vanguard Strikes Back With Lower Target-Date Fees

Post by StormShadow »

SpringMan wrote:If these funds are like other Vanguard institutional funds, they will have a $5,000,000 minimum. Too rich for my blood. :(
"...Vanguard's new offerings, directed at retirement-plan providers, will require a $100 million minimum initial investment for investment-only clients, though recordkeeping clients will have no minimum requirement..."
My employer uses VG Target Date Funds. Hopefully that means we might be included. I'd love a lower ER.

Not sure what to think about the increased international exposure. I thought it was a tad high to begin with.
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Re: Vanguard Strikes Back With Lower Target-Date Fees

Post by alec »

My 401k already has the vanguard target date funds with expense ratios of .11%. They're called XXX Trust II our something like that.
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Re: Vanguard Strikes Back With Lower Target-Date Fees

Post by mervinj7 »

Has anybody started seeing the new institutional share class version of the target retirements fund in their 401ks/403bs? They were set to go live on June 26, 2015.
In case you don't have access to M*: https://institutional.vanguard.com/VGAp ... fo022615QA
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Re: Vanguard Strikes Back With Lower Target-Date Fees

Post by frisbee »

My Fortune 500 former employer has a bunch of Vanguard TR funds. They appear non-institutional (ER 0.24%). Anyone know what it takes to get to institutional? They also offer a bunch of cruddy actively managed funds, so I suspect there isn't $100m invested in Vanguard.
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Re: Vanguard Strikes Back With Lower Target-Date Fees

Post by cmublitz »

The small business (10 employees with less than $1Million AUM in 401K) I work for is going to be getting the new institutional Vanguard TR funds soon. It is an Ascensus/Vanguard plan with Admiral funds except for the MM fund and the TR funds. Most of the company just uses the TR funds instead of the Admiral 3-Fund or tilt options available so this will be a nice win for us. The company now covers 100% of the administration costs, so it is a pretty sweet deal for me. Thanks to Bogleheads for the motivation and information to help guide this plan into execution.
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Re: Vanguard Strikes Back With Lower Target-Date Fees

Post by Compound »

mervinj7 wrote:Has anybody started seeing the new institutional share class version of the target retirements fund in their 401ks/403bs? They were set to go live on June 26, 2015.
In case you don't have access to M*: https://institutional.vanguard.com/VGAp ... fo022615QA
I recently received an email indicating that my employer will be switching over to the institutional TR share class on Sept. 1.

Bravo Vanguard for lowering fees whenever possible!
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