Target date funds offered to Vanguard crew

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Jess432
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Target date funds offered to Vanguard crew

Post by Jess432 » Thu Jun 14, 2018 9:40 am

I was researching the fund line-up changes that Vanguard is making later this month to the retirement plan they provide to internal employees and noticed that the target date funds they offer do not have a ticker symbol listed and became curious as to why. Does anyone know?

bloom2708
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Re: Target date funds offered to Vanguard crew

Post by bloom2708 » Thu Jun 14, 2018 12:01 pm

This is quite common.

Large businesses can get institutional shares (Class K shares). Behind the scenes they may be identical to the regular Target Date funds. Costs are likely lower. A bigger pool of money buys them lower costs.
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mrc
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Re: Target date funds offered to Vanguard crew

Post by mrc » Thu Jun 14, 2018 12:10 pm

Some companies establish Common Trust funds for employees. They function the same as mutual funds, but require lesser reporting, and as a result lower fees. At my old firm, these vehicles had internal, private symbols.
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jhfenton
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Re: Target date funds offered to Vanguard crew

Post by jhfenton » Thu Jun 14, 2018 12:12 pm

As bloom2708 said, it is quite common for large plans. They are Collective Investment Trusts (Boglehead wiki). They are basically non-public mutual funds managed for group retirement plans. They don't have to distribute dividends and capital gains. They don't have to publish a prospectus and jump through a few other regulatory hoops. They are often a bit cheaper than the equivalent retail funds as a result.

Jess432
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Re: Target date funds offered to Vanguard crew

Post by Jess432 » Thu Jun 14, 2018 4:28 pm

Thanks, all, for the insight.

youngpleb
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Re: Target date funds offered to Vanguard crew

Post by youngpleb » Thu Jun 14, 2018 7:31 pm

I've got the same thing through my workplace. They are labeled as Vanguard Target Date retirement funds but don't have a ticker. They're composed just like the regular Vanguard Target funds though. Only difference is our 401k ones have a .08% ER vs. the standard .15% ER. We also have access to Institutional shares, so it is like Bloom said.
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xb7
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Re: Target date funds offered to Vanguard crew

Post by xb7 » Fri Jun 15, 2018 8:34 pm

It would be nice if there were Admiral share versions of the target date funds.

OTOH, I'm almost kind of glad that there are not.

I was unwilling to pay the expense ratio premium of following a simple glide path. Having to work out my own personal glide path to own the underlying funds was a good exercise to go through. No target date fund is going to follow the exact glide path that I think might be optimal for me.

Long term, though, the "even-more-simple" benefit of a target date fund could perhaps provide the last measure of simplicity to allow me to manage my own investments even pretty late in life (?), or at least make it dead easy to pass that job on to children or whoever.

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