Will VTWSX expense ratio go down in the future

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Post Reply
Topic Author
Setafix
Posts: 12
Joined: Sat Mar 24, 2018 3:56 pm
Location: Ca

Will VTWSX expense ratio go down in the future

Post by Setafix » Mon Apr 09, 2018 10:39 pm

At the moment I am just curious if in the future the cost of fund will go down to say what you pay for VTSAX + VTIAX?

User avatar
spdoublebass
Posts: 616
Joined: Thu Apr 27, 2017 10:04 pm
Location: NY

Re: Will VTWSX expense ratio go down in the future

Post by spdoublebass » Mon Apr 09, 2018 11:55 pm

Probably, but who knows.

It has been going down since it was first introduced. It recently (few months ago) lowered from .11 to .10 for the ETF. I think it was introduced at .25ish for the mutual fund, which is currently .19.

My own personal opinion (which doesn't mean much) is that it's low enough now if you want the simplicity and are ok with global market weight.

I currently hold it, not selling myself short, but my portfolio size isn't that large, so if I separated the two funds I'd be saving a few bucks a year.

I guess yes, I would guess that the cost would come down, but the other question is will they ever introduce admiral shares...
I'm trying to think, but nothing happens

User avatar
jhfenton
Posts: 4518
Joined: Sat Feb 07, 2015 11:17 am
Location: Ohio

Re: Will VTWSX expense ratio go down in the future

Post by jhfenton » Tue Apr 10, 2018 9:04 am

The question is really whether they will ever add Admiral Shares for the mutual fund. And I don't know the answer.

I ask the same question every year about VFSVX (Vanguard FTSE All-World ex-US Small Cap). VFSVX is at 25 bp. The ETF VSS share class is at 13 bp.

User avatar
CyberBob
Posts: 3290
Joined: Tue Feb 20, 2007 2:53 pm

Re: Will VTWSX expense ratio go down in the future

Post by CyberBob » Tue Apr 10, 2018 9:31 am

It's been in a steady downtrend.
The prospectus in 2008 lists the expense ratio as 0.45%, with a purchase fee of 0.15%.
Today the expense ratio is 0.19%.

User avatar
nisiprius
Advisory Board
Posts: 40021
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: Will VTWSX expense ratio go down in the future

Post by nisiprius » Tue Apr 10, 2018 10:59 am

Let's be clear: this is already a very low cost fund by most standards. And, in comparing expense ratios IMHO what matters is always the difference, never the ratio. The proper comparison between VTWSX and, say, a 50/50 mix of VTIAX (0.11%) and (0.04%) = 0.08% is that VTWSX has 0.11% higher expenses; not, let us say, VTWSX is twice as expensive. It's true, but twice something that's tiny is still tiny.

Image

Personally, if I wanted that high an international allocation, I would use VTWSX and hang the tiny extra expense. And if I wanted to obsess about expenses, of course, I could use the ETF, VT, and ignore my personal mild preference for mutual funds over ETFs. VT gets the expense ratio down to 0.10%.
Last edited by nisiprius on Tue Apr 10, 2018 3:24 pm, edited 1 time in total.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

Topic Author
Setafix
Posts: 12
Joined: Sat Mar 24, 2018 3:56 pm
Location: Ca

Re: Will VTWSX expense ratio go down in the future

Post by Setafix » Tue Apr 10, 2018 1:49 pm

Thanks for the response everyone.

User avatar
asset_chaos
Posts: 1716
Joined: Tue Feb 27, 2007 6:13 pm
Location: Melbourne

Re: Will VTWSX expense ratio go down in the future

Post by asset_chaos » Tue Apr 10, 2018 4:37 pm

There's a thread following total world's lowering expense ratio here viewtopic.php?f=10&t=212013 with a graph towards the bottom showing expense ratio versus asset size for the fund. And, of course, check out our own wiki page on the subject https://www.bogleheads.org/wiki/Vanguar ... d_expenses. If total world's assets continue to rise, it seems highly likely that its expense ratio will continue to fall.
Regards, | | Guy

User avatar
asset_chaos
Posts: 1716
Joined: Tue Feb 27, 2007 6:13 pm
Location: Melbourne

Re: Will VTWSX expense ratio go down in the future

Post by asset_chaos » Tue Nov 20, 2018 6:13 pm

To update this thread, Vanguard has filed with the SEC for Admiral shares of total world (EDGAR filing https://www.sec.gov/Archives/edgar/data ... merged.htm) listing a cost of 10 bp. Filing is preliminary and dated 19 Nov 2018. Looks like lower cost Admiral shares of total world in the new year.
Regards, | | Guy

Drovor
Posts: 131
Joined: Sun Oct 25, 2015 9:50 am

Re: Will VTWSX expense ratio go down in the future

Post by Drovor » Wed Nov 21, 2018 6:10 pm

This is great news. Thanks!

Cash
Posts: 1504
Joined: Wed Mar 10, 2010 10:52 am

Re: Will VTWSX expense ratio go down in the future

Post by Cash » Thu Nov 22, 2018 7:26 am

Yes, this is great news that is also now buried in that other thread about VG lowering the admiral minimum. Hopefully this thread will stay separate for those (like me) who don’t care about the new $3k minimum, but do care about the new Total World admiral share class.

User avatar
jhfenton
Posts: 4518
Joined: Sat Feb 07, 2015 11:17 am
Location: Ohio

Re: Will VTWSX expense ratio go down in the future

Post by jhfenton » Thu Nov 22, 2018 8:23 am

Cash wrote:
Thu Nov 22, 2018 7:26 am
Yes, this is great news that is also now buried in that other thread about VG lowering the admiral minimum. Hopefully this thread will stay separate for those (like me) who don’t care about the new $3k minimum, but do care about the new Total World admiral share class.
Agreed. Merging those two threads was unfortunate. I had added the SEC link to the prospectuses and had a moderator retitle the thread to reflect that Admiral shares were forthcoming for both Total World and ex-US Small Cap. And then a few hours later it was gone, lost in the larger and almost completely unrelated thread.

For me, Admiral shares for All World ex-US Small Cap (VSS/VFSVX) was the more important news. VSS is our largest position.

lisaneedsbraces
Posts: 63
Joined: Sun Jan 16, 2011 1:23 pm

Re: Will VTWSX expense ratio go down in the future

Post by lisaneedsbraces » Thu Nov 22, 2018 9:01 am

VTWSX is my primary holding. I have a preference for mutual funds, but I've been thinking about converting to VT so that I can consolidate everything at one brokerage. The introduction of Admiral shares eliminates one of the big advantages of the ETF (expense ratio).

I have a somewhat unrelated question regarding the ETF, but it impacts my decision: the premium for yesterday was around 16 basis points. Looking at the other Vanguard total market ETFs, VTI had almost no premium/discount, and VXUS was about 20 basis points. Is this normal behavior?

User avatar
jhfenton
Posts: 4518
Joined: Sat Feb 07, 2015 11:17 am
Location: Ohio

Re: Will VTWSX expense ratio go down in the future

Post by jhfenton » Thu Nov 22, 2018 9:17 am

lisaneedsbraces wrote:
Thu Nov 22, 2018 9:01 am
VTWSX is my primary holding. I have a preference for mutual funds, but I've been thinking about converting to VT so that I can consolidate everything at one brokerage. The introduction of Admiral shares eliminates one of the big advantages of the ETF (expense ratio).

I have a somewhat unrelated question regarding the ETF, but it impacts my decision: the premium for yesterday was around 16 basis points. Looking at the other Vanguard total market ETFs, VTI had almost no premium/discount, and VXUS was about 20 basis points. Is this normal behavior?
Yes. Vanguard's US ETFs pretty much never show a significant premium or discount because they underlying securities are liquid and are trading at the same time. Because Asian markets are closed by the time the US opens, and European markets close mid-day, premiums and discounts can show up on ex-US funds.

It is usually most dramatic on VSS. According to Vanguard, the closing premium on VSS yesterday, even after fair value adjustment of the NAV was 49 bp. I have taken advantage of this in the past when the premium was high by selling VSS near the close and buying VFSVX (the Investor shares). I can then convert the Investor shares back to VSS at NAV with a phone call. I have made >50 bp on average.

Post Reply