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Vanguard to offer non-Vanguard ETFs commission-free

Posted: Mon Jul 02, 2018 8:48 am
by Ever Ready
In August, you’ll have access to almost all ETFs—from Vanguard and more than a hundred other companies—commission-free when you invest online. We’re excluding inverse and leveraged ETFs because their speculative nature runs counter to our investors’ focus on long-term success.

This lineup of nearly 1,800 commission-free ETFs joins the more than 2,500 no-transaction-fee mutual funds we already offer. And for investors using individual stocks and bonds to build diversified portfolios, we provide competitive commissions, with many investors paying as little as $2 for online stock trades.
https://investornews.vanguard/coming-in ... investors/

Re: Vanguard to offer non-Vanguard ETFs commission-free

Posted: Mon Jul 02, 2018 8:55 am
by Salty
Thanks for the heads up! This is great.

Re: Vanguard to offer non-Vanguard ETFs commission-free

Posted: Mon Jul 02, 2018 8:58 am
by aristotelian
Nice. Should make for even more options for tax loss harvesting.

Re: Vanguard to offer non-Vanguard ETFs commission-free

Posted: Mon Jul 02, 2018 9:09 am
by jacoavlu
But of a surprise. All the others will have to do the same

Re: Vanguard to offer non-Vanguard ETFs commission-free

Posted: Mon Jul 02, 2018 9:14 am
by UpperNwGuy
Hmm... I wonder if the list of non-Vanguard ETFs will include the popular iShares ETFs that people now buy through Fidelity. If so, I can see Fidelity losing a lot more business to Vanguard.

Re: Vanguard to offer non-Vanguard ETFs commission-free

Posted: Mon Jul 02, 2018 9:17 am
by oldcomputerguy
I wonder if they will include SPDRs.

Re: Vanguard to offer non-Vanguard ETFs commission-free

Posted: Mon Jul 02, 2018 9:17 am
by bradshaw1965
UpperNwGuy wrote:
Mon Jul 02, 2018 9:14 am
Hmm... I wonder if the list of non-Vanguard ETFs will include the popular iShares ETFs that people now buy through Fidelity. If so, I can see Fidelity losing a lot more business to Vanguard.
https://pressroom.vanguard.com/news/Pre ... 70218.html

...including ETFs from BlackRock, Schwab, and SSgA. The program will exclude highly speculative and complex ETFs 1.

looks like the only thing excluded are:

1.Commission-free trades will exclude inverse and leveraged ETFs.

Re: Vanguard to offer non-Vanguard ETFs commission-free

Posted: Mon Jul 02, 2018 9:19 am
by retiringwhen
jacoavlu wrote:
Mon Jul 02, 2018 9:09 am
But of a surprise. All the others will have to do the same
I think this is part of the approach to push costs lower on all fronts... This is particularly interesting as it probably will cost Vanguard very little to implement (as they don't really attract the brokerage / trader customer first and foremost) but it could put a real bite in the fees for the other brokerages that do if they feel the need to respond in kind.

I can see this a step to ensure that expense ratios are real and not subsidized by other fees at other brokerage houses so the ER are comparable when looking at side-by-side comparisons.

Re: Vanguard to offer non-Vanguard ETFs commission-free

Posted: Mon Jul 02, 2018 9:20 am
by jhfenton
Wow. I am genuinely and pleasantly surprised.
UpperNwGuy wrote:
Mon Jul 02, 2018 9:14 am
Hmm... I wonder if the list of non-Vanguard ETFs will include the popular iShares ETFs that people now buy through Fidelity. If so, I can see Fidelity losing a lot more business to Vanguard.
It sounds like it will include all ETFs except "specialty" ETFs that don't fit into Vanguard's buy-and-hold philosophy. (If they included those, they could attract too many traders.)

I wonder what the rules will be on trading. Will they have the same permissive rule as Vanguard ETFs? (24 buys and 24 sells in the same ETF in the same account within 12 months leads to a 30-day suspension on purchases.) Or will they have short-term round-trip trading fees like many other brokerages?

Re: Vanguard to offer non-Vanguard ETFs commission-free

Posted: Mon Jul 02, 2018 9:26 am
by UpperNwGuy
I am trying to imagine the emergency meetings being conducted this morning at Fidelity, Schwab, Merrill, and TD Ameritrade. I'm sure it is no accident that Vanguard dropped this press release at the beginning of a popular vacation week when their competitors are operating at half staff in the executive suites.

Re: Vanguard to offer non-Vanguard ETFs commission-free

Posted: Mon Jul 02, 2018 9:37 am
by livesoft
Ah, it's nice when feedback to Vanguard leads to implementation.

The costs and expenses to implement commissions are probably higher than any income that they get from commissions anyways.

This is also why Robinhood and M1 Finance are not going to survive in my opinion.

Re: Vanguard to offer non-Vanguard ETFs commission-free

Posted: Mon Jul 02, 2018 9:39 am
by MotoTrojan
Awesome! Only change for me is I’ll likely swap from VIOV to IJS, but this is a pretty big industry change up.

Re: Vanguard to offer non-Vanguard ETFs commission-free

Posted: Mon Jul 02, 2018 9:52 am
by grok87
Cool now I can buy LTPZ (hopefully)

Re: Vanguard to offer non-Vanguard ETFs commission-free

Posted: Mon Jul 02, 2018 10:31 am
by Jiu Jitsu Fighter
If they offer the following, I'll consider moving my Schwab accounts to Vanguard:

MDYV - State Street S&P 400 Mid-cap Value
SLYV - State Street S&P 600 Small-cap Value
FNDC - Schwab International Developed Markets Small Fundamental
FNDE - Schwab Emerging Market Fundamental

Curious as to what Vanguard would do with their S&P funds (excluding VOO S&P 500). For example, Vanguard offers VIOV (S&P 600 Small-cap Value) which has a paltry AUM and average along with a 20 bps exp. ratio compared to the identical State Street version SLYV which has a higher AUM and average daily volume along with a 15 bps exp. ratio. I guess we'll find out in August.

Re: Vanguard to offer non-Vanguard ETFs commission-free

Posted: Mon Jul 02, 2018 10:43 am
by triceratop
Great news, sometimes non-Vanguard ETFs are more tax efficient so this is great. It was also annoying that some non-Vanguard brokerages were not allowing purchase of some Vanguard multi factor ETFs. This really changes the game.

The good news for me personally is that Merrill Edge will have to compete harder (or they think they will) to keep my business.

Re: Vanguard to offer non-Vanguard ETFs commission-free

Posted: Mon Jul 02, 2018 10:45 am
by livesoft
I'm too lazy to read something that is too new, so may I ask if there are early redemption or frequent trading fees or nuances?

Re: Vanguard to offer non-Vanguard ETFs commission-free

Posted: Mon Jul 02, 2018 10:48 am
by walletless
Next tlh opportunity, moving from VBR to IJS and staying there 😊

Re: Vanguard to offer non-Vanguard ETFs commission-free

Posted: Mon Jul 02, 2018 10:50 am
by Outafter20
Maybe Ameritrade will go back to offering some Vanguard ETFs commission free.

Re: Vanguard to offer non-Vanguard ETFs commission-free

Posted: Mon Jul 02, 2018 10:53 am
by walletless
livesoft wrote:
Mon Jul 02, 2018 10:45 am
I'm too lazy to read something that is too new, so may I ask if there are early redemption or frequent trading fees or nuances?
Early redemption fees are based on fund, so you'll have to read the prospectus of whatever ETF you're buying.

Frequent trading: I'll be surprised if that's not there. Vanguard prefers people buy and hold; so there will be usual restrictions to discourage frequent trading.

Re: Vanguard to offer non-Vanguard ETFs commission-free

Posted: Mon Jul 02, 2018 11:04 am
by jhfenton
Jiu Jitsu Fighter wrote:
Mon Jul 02, 2018 10:31 am
If they offer the following, I'll consider moving my Schwab accounts to Vanguard:

MDYV - State Street S&P 400 Mid-cap Value
SLYV - State Street S&P 600 Small-cap Value
FNDC - Schwab International Developed Markets Small Fundamental
FNDE - Schwab Emerging Market Fundamental

Curious as to what Vanguard would do with their S&P funds (excluding VOO S&P 500). For example, Vanguard offers VIOV (S&P 600 Small-cap Value) which has a paltry AUM and average along with a 20 bps exp. ratio compared to the identical State Street version SLYV which has a higher AUM and average daily volume along with a 15 bps exp. ratio. I guess we'll find out in August.
Those aren't leveraged or inverse ETFs, so they will almost certainly be included.

I own a small amount of VIOV in taxable, mostly purchased last year. My average cost is $119.xx per share, and it's currently at $140.xx. So I'm going to be stuck with it for while.

Re: Vanguard to offer non-Vanguard ETFs commission-free

Posted: Mon Jul 02, 2018 11:09 am
by Choy
I’ve been hesitant to use Vanguard for taxable brokerage accounts because I feel they have issues with record keeping along with other general issues. I’ve had money go “missing” for a period of time.

Anyone else have concerns?

Re: Vanguard to offer non-Vanguard ETFs commission-free

Posted: Mon Jul 02, 2018 11:10 am
by livesoft
jhfenton wrote:
Mon Jul 02, 2018 11:04 am
So I'm going to be stuck with it for while.
You sound like you are disappointed. I think most folks would not mind being stuck with it.

Re: Vanguard to offer non-Vanguard ETFs commission-free

Posted: Mon Jul 02, 2018 11:10 am
by livesoft
Choy wrote:
Mon Jul 02, 2018 11:09 am
I’ve been hesitant to use Vanguard for taxable brokerage accounts because I feel they have issues with record keeping along with other general issues. I’ve had money go “missing” for a period of time.

Anyone else have concerns?
Of course, I am concerned.

Re: Vanguard to offer non-Vanguard ETFs commission-free

Posted: Mon Jul 02, 2018 11:13 am
by stan1
Oh my, this is payback for TD Ameritrade dropping Vanguard ETFs in November, 2017 in favor of expensive spindex and sector ETFs and will hopefully kill off marketing agreements between ETF providers and brokerages. Vanguard should come out way ahead if other brokerages also respond with free trades. Another Vanguard initiated win for retail investors.

Re: Vanguard to offer non-Vanguard ETFs commission-free

Posted: Mon Jul 02, 2018 11:17 am
by jhfenton
livesoft wrote:
Mon Jul 02, 2018 11:10 am
jhfenton wrote:
Mon Jul 02, 2018 11:04 am
So I'm going to be stuck with it for while.
You sound like you are disappointed. I think most folks would not mind being stuck with it.
Not really. I would prefer to be stuck by capital gains rather than to not have capital gains.

And VIOV has trivially outperformed SLYV despite having a 5 bp higher expense ratio. So there's no great desire to switch.

Re: Vanguard to offer non-Vanguard ETFs commission-free

Posted: Mon Jul 02, 2018 11:20 am
by TheDDC
Will Invesco QQQ be included? That's really the only non-VG ETF I would be interested in buying at this point in my taxable holding. That would be huge since Vanguard does not seem to offer a decent NASDAQ fund.

-TheDDV

More commission free ETFs coming to Vanguard

Posted: Mon Jul 02, 2018 11:32 am
by bzargarcia
[merged into existing thread - moderator prudent]

FYI.
https://investornews.vanguard/coming-in ... investors/

Re: More commission free ETFs coming to Vanguard

Posted: Mon Jul 02, 2018 11:49 am
by GMan82
That’s interesting. I wonder if IJS (Sp 600 SCV) will be on that list.

Are there good ETFs out there that aren’t vanguard based but still good for the index investor? I can’t imagine there’s that much unless you invest in active funds.

Re: Vanguard to offer non-Vanguard ETFs commission-free

Posted: Mon Jul 02, 2018 12:12 pm
by dual
This is nice but as a Flagship member I get IIRC ~20 commision free trades per year. I have never come close to the limit.

Re: Vanguard to offer non-Vanguard ETFs commission-free

Posted: Mon Jul 02, 2018 12:22 pm
by aristotelian
UpperNwGuy wrote:
Mon Jul 02, 2018 9:26 am
I am trying to imagine the emergency meetings being conducted this morning at Fidelity, Schwab, Merrill, and TD Ameritrade. I'm sure it is no accident that Vanguard dropped this press release at the beginning of a popular vacation week when their competitors are operating at half staff in the executive suites.
Ha, and probably a lot of meetings in the offices of Blackrock and State Street where guys are giving each other high fives.

Re: Vanguard to offer non-Vanguard ETFs commission-free

Posted: Mon Jul 02, 2018 12:38 pm
by Whakamole
TheDDC wrote:
Mon Jul 02, 2018 11:20 am
Will Invesco QQQ be included? That's really the only non-VG ETF I would be interested in buying at this point in my taxable holding. That would be huge since Vanguard does not seem to offer a decent NASDAQ fund.

-TheDDV
Not inverse or leveraged, so almost certainly.

1800 Commission-Free ETFs

Posted: Mon Jul 02, 2018 1:36 pm
by Dale_G
[Thread merged into here, see below. --admin LadyGeek]

From Vanguard:
What you can look forward to
In August, you’ll have access to almost all ETFs—from Vanguard and more than a hundred other companies—commission-free when you invest online. We’re excluding inverse and leveraged ETFs because their speculative nature runs counter to our investors’ focus on long-term success.

This lineup of nearly 1,800 commission-free ETFs joins the more than 2,500 no-transaction-fee mutual funds we already offer. And for investors using individual stocks and bonds to build diversified portfolios, we provide competitive commissions, with many investors paying as little as $2 for online stock trades.
It might make tax loss harvesting a little less costly,

Dale

Re: 1800 Commission-Free ETFs

Posted: Mon Jul 02, 2018 1:47 pm
by simplesimon
Nice bit of news, although I have purposely avoided converting my Vanguard admiral class funds to ETFs because I think I will trade more if I was in ETFs. Forced discipline so to speak. Am I leaving any free money on the table as a result?

Re: 1800 Commission-Free ETFs

Posted: Mon Jul 02, 2018 1:49 pm
by Sirjames
Based on the announcement I saw it seems that we’ll need to wait until July to find out what ETFs are included. Unless anyone out there has seen a published list?

This definitely confirms that I will use Vanguard when I’m ready to start a taxable account.

Re: 1800 Commission-Free ETFs

Posted: Mon Jul 02, 2018 1:51 pm
by UpperNwGuy
simplesimon wrote:
Mon Jul 02, 2018 1:47 pm
Nice bit of news, although I have purposely avoided converting my Vanguard admiral class funds to ETFs because I think I will trade more if I was in ETFs. Forced discipline so to speak. Am I leaving any free money on the table as a result?
I don't think so. The Vanguard press release says that they are removing fees from the non-Vanguard ETFs. The Vanguard ETFs to which you refer already enjoyed free trading.

Re: Vanguard to offer non-Vanguard ETFs commission-free

Posted: Mon Jul 02, 2018 2:18 pm
by MotoTrojan
Jiu Jitsu Fighter wrote:
Mon Jul 02, 2018 10:31 am
If they offer the following, I'll consider moving my Schwab accounts to Vanguard:

MDYV - State Street S&P 400 Mid-cap Value
SLYV - State Street S&P 600 Small-cap Value
FNDC - Schwab International Developed Markets Small Fundamental
FNDE - Schwab Emerging Market Fundamental

Curious as to what Vanguard would do with their S&P funds (excluding VOO S&P 500). For example, Vanguard offers VIOV (S&P 600 Small-cap Value) which has a paltry AUM and average along with a 20 bps exp. ratio compared to the identical State Street version SLYV which has a higher AUM and average daily volume along with a 15 bps exp. ratio. I guess we'll find out in August.
I thought I saw some examples of SLYV not managing capital return as well as VIOV and IJS. I’m cknsideeing holding IJS in taxable and VIOV in Roth now to keep ER lower while managing risk of the fund being closed and me getting taxed.

Re: More commission free ETFs coming to Vanguard

Posted: Mon Jul 02, 2018 2:19 pm
by MotoTrojan
GMan82 wrote:
Mon Jul 02, 2018 11:49 am
That’s interesting. I wonder if IJS (Sp 600 SCV) will be on that list.

Are there good ETFs out there that aren’t vanguard based but still good for the index investor? I can’t imagine there’s that much unless you invest in active funds.
Some DFA options maybe. Small-value International is a VG hole which has some options out there. Microcap too.

Re: Vanguard to offer non-Vanguard ETFs commission-free

Posted: Mon Jul 02, 2018 2:22 pm
by Raabe34
livesoft wrote:
Mon Jul 02, 2018 9:37 am
Ah, it's nice when feedback to Vanguard leads to implementation.

The costs and expenses to implement commissions are probably higher than any income that they get from commissions anyways.

This is also why Robinhood and M1 Finance are not going to survive in my opinion.
concur

Re: Vanguard to offer non-Vanguard ETFs commission-free

Posted: Mon Jul 02, 2018 2:26 pm
by Jiu Jitsu Fighter
MotoTrojan wrote:
Mon Jul 02, 2018 2:18 pm
Jiu Jitsu Fighter wrote:
Mon Jul 02, 2018 10:31 am
If they offer the following, I'll consider moving my Schwab accounts to Vanguard:

MDYV - State Street S&P 400 Mid-cap Value
SLYV - State Street S&P 600 Small-cap Value
FNDC - Schwab International Developed Markets Small Fundamental
FNDE - Schwab Emerging Market Fundamental

Curious as to what Vanguard would do with their S&P funds (excluding VOO S&P 500). For example, Vanguard offers VIOV (S&P 600 Small-cap Value) which has a paltry AUM and average along with a 20 bps exp. ratio compared to the identical State Street version SLYV which has a higher AUM and average daily volume along with a 15 bps exp. ratio. I guess we'll find out in August.
I thought I saw some examples of SLYV not managing capital return as well as VIOV and IJS. I’m cknsideeing holding IJS in taxable and VIOV in Roth now to keep ER lower while managing risk of the fund being closed and me getting taxed.
Agreed. SLYV has had much more capital gains than VIOV or IJSin the past. I would hold SLYV in a tax-deferred account and IJS in a taxable account. For some reason, bogleheads eschew SLYV. Besides the capital gains, it's the lowest cost and tracks the index well with a decent amount of AUM and average daily trading volume.

Re: 1800 Commission-Free ETFs

Posted: Mon Jul 02, 2018 2:32 pm
by zeugmite
I wonder how this gets paid for. Fund supermarket access fees by providers? Payment for order flow? Internalization, i.e. market-making (most likely)?

Re: Vanguard to offer non-Vanguard ETFs commission-free

Posted: Mon Jul 02, 2018 2:42 pm
by walletless
It'll be interesting to see if DFA funds will be in this list, especially since they're not inverse funds.. but DFA wants to only sell their funds through an advisor. That would be a disruptor if allowed!

Re: Vanguard to offer non-Vanguard ETFs commission-free

Posted: Mon Jul 02, 2018 2:45 pm
by walletless
livesoft wrote:
Mon Jul 02, 2018 9:37 am
This is also why Robinhood and M1 Finance are not going to survive in my opinion.
Robinhood has free individual stocks and crypto. Both these are popular among younger investors. Plus they have a slick app, which their users care about more (unlike typical Vanguard users). I don't think this is a threat to Robinhood any way, although Robinhood should be worried how easy it is for a larger player to replicate it's business model, and how easy it is for users to switch trading platforms.

Re: Vanguard to offer non-Vanguard ETFs commission-free

Posted: Mon Jul 02, 2018 2:52 pm
by Iridium
walletless wrote:
Mon Jul 02, 2018 2:42 pm
It'll be interesting to see if DFA funds will be in this list, especially since they're not inverse funds.. but DFA wants to only sell their funds through an advisor. That would be a disruptor if allowed!
This new policy only applies to ETFs. DFA does not offer any ETFs and is not likely to do so in the future (as you point out, if DFA offered an ETF they would not be able to limit purchases to those with approved advisors).

Re: Vanguard to offer non-Vanguard ETFs commission-free

Posted: Mon Jul 02, 2018 2:53 pm
by Nate79
walletless wrote:
Mon Jul 02, 2018 2:42 pm
It'll be interesting to see if DFA funds will be in this list, especially since they're not inverse funds.. but DFA wants to only sell their funds through an advisor. That would be a disruptor if allowed!
DFA has ETFs?

Re: Vanguard to offer non-Vanguard ETFs commission-free

Posted: Mon Jul 02, 2018 2:58 pm
by Lieutenant.Columbo
will (our current) IJS shares now appreciate with purchases by those Vanguard custoners who all along wanted to buy in but never did until now because IJS wasn't commission-free for them?

Edit to add: :wink:

Re: Vanguard to offer non-Vanguard ETFs commission-free

Posted: Mon Jul 02, 2018 3:12 pm
by vesalius
Nate79 wrote:
Mon Jul 02, 2018 2:53 pm
walletless wrote:
Mon Jul 02, 2018 2:42 pm
It'll be interesting to see if DFA funds will be in this list, especially since they're not inverse funds.. but DFA wants to only sell their funds through an advisor. That would be a disruptor if allowed!
DFA has ETFs?
Yes by proxy, they manage John Hancocks Multifactor ETFs
JHMD Multifactor Developed International ETF
JHML Multifactor Large Cap ETF
JHMM Multifactor Mid Cap ETF
JHSC Multifactor Small Cap ETF

as well as several other sector ETFs.

Re: Vanguard to offer non-Vanguard ETFs commission-free

Posted: Mon Jul 02, 2018 3:34 pm
by JoMoney
:mrgreen: I suppose this is good news. It will lower costs for ETF fans, and increase market-share at Vanguard... and I'll wager that qualifies as an increase in pay to Vanguard's employees eligible for the "partnership plan" bonuses.
I would also wager Mr.Bogle has mixed feelings about this, with a preference against people using esoteric ETFs and should focus on simply broad-based low-cost TIFs.

Re: 1800 Commission-Free ETFs

Posted: Mon Jul 02, 2018 3:37 pm
by 123
Sounds like a move by Vanguard to make their brokerage offering more attractive, sounds like a good deal, especially for those who follow a bogleheads methodology.

Of course I'm very curious to find out what Schwab and Fidelity will do to stay competitive.

Re: 1800 Commission-Free ETFs

Posted: Mon Jul 02, 2018 3:44 pm
by SpringMan
Good deal. Now Vanguard should sweeten the deal for Flagship clients. 25 free trades, which I used only a few trades, now is not as much value. My vote would be bring back free TurboTax.

Re: Vanguard to offer non-Vanguard ETFs commission-free

Posted: Mon Jul 02, 2018 3:47 pm
by LadyGeek
I merged Dale_G's thread into the on-going discussion.