Vgd alt strategies fund (vasfx) open to retail investors?

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grok87
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Vgd alt strategies fund (vasfx) open to retail investors?

Post by grok87 » Fri Jul 27, 2018 5:44 pm

Keep calm and Boglehead on. KCBO.

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Re: Vgd alt strategies fund (vasfx) open to retail investors?

Post by zaboomafoozarg » Sat Jul 28, 2018 8:58 am

Interesting, it seems I saw this was closed just a couple weeks ago.

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nedsaid
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Re: Vgd alt strategies fund (vasfx) open to retail investors?

Post by nedsaid » Sat Jul 28, 2018 10:08 am

I don't happen to have a spare $250,000 just lying around. A pretty high barrier of entry for most all retail investors. Looks more like an institutional product or maybe something sold through advisors.
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Re: Vgd alt strategies fund (vasfx) open to retail investors?

Post by afan » Sat Jul 28, 2018 10:14 am

A lot of people have that much in retirement accounts and could switch to this fund with no tax implications.

Cannot imagine I would want an alt strategy fund and sure I would not pay 0.79% expense ratio for any fund. Maybe if there is someday an alt index fund with a single digit expense ratio...
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

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Re: Vgd alt strategies fund (vasfx) open to retail investors?

Post by grok87 » Sat Jul 28, 2018 10:49 am

afan wrote:
Sat Jul 28, 2018 10:14 am
A lot of people have that much in retirement accounts and could switch to this fund with no tax implications.

Cannot imagine I would want an alt strategy fund and sure I would not pay 0.79% expense ratio for any fund. Maybe if there is someday an alt index fund with a single digit expense ratio...
vanguard has this footnote on the expense ratio.
Vanguard wrote: Excluding borrowing and dividend expenses on securities sold short, the Total Annual Fund Operating Expenses are 0.25%.
Last edited by grok87 on Sat Jul 28, 2018 3:13 pm, edited 1 time in total.
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Re: Vgd alt strategies fund (vasfx) open to retail investors?

Post by whodidntante » Sat Jul 28, 2018 10:56 am

AQR seems to utilize much higher leverage than this fancy Vanguard fund.

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Re: Vgd alt strategies fund (vasfx) open to retail investors?

Post by petulant » Sat Jul 28, 2018 11:15 am

afan wrote:
Sat Jul 28, 2018 10:14 am
A lot of people have that much in retirement accounts and could switch to this fund with no tax implications.

Cannot imagine I would want an alt strategy fund and sure I would not pay 0.79% expense ratio for any fund. Maybe if there is someday an alt index fund with a single digit expense ratio...
I understand a lot of people have a lot in IRAs, but the typical allocation to alternative strategies is 10-20%. So the question is not whether they have $250,000; it's whether they have $1.5-$2M to put a $250K allocation in here.

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Re: Vgd alt strategies fund (vasfx) open to retail investors?

Post by columbia » Sat Jul 28, 2018 11:26 am

What is the goal for anyone who invests in this fund?

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Re: Vgd alt strategies fund (vasfx) open to retail investors?

Post by Theoretical » Sat Jul 28, 2018 12:31 pm

A different type of return stream from that of stocks and bonds. It’s a mix of factors, commodities, and I think some merger arbitrage and currency stuff. These have risk but somewhat different risks than just straight stocks and bonds.

Being a Vanguard fund, the expenses are way lower than a lot of the comparable products. But it remains to be seen how good or bad it ends up being for a portfolio and how much is required to make a noticeable dent on the folio’s returns.

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Re: Vgd alt strategies fund (vasfx) open to retail investors?

Post by grok87 » Sat Jul 28, 2018 3:16 pm

whodidntante wrote:
Sat Jul 28, 2018 10:56 am
AQR seems to utilize much higher leverage than this fancy Vanguard fund.
they need to get over their higher fee hurdle.

higher leverage = higher returns but also higher risk.

usually the increase in risk is more than the increase in return. Like your risk doubles but your expected return goes up maybe 50%. and that is before i.e. gross of the management expense ratio
Last edited by grok87 on Sat Jul 28, 2018 4:41 pm, edited 1 time in total.
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Re: Vgd alt strategies fund (vasfx) open to retail investors?

Post by columbia » Sat Jul 28, 2018 4:30 pm

Theoretical wrote:
Sat Jul 28, 2018 12:31 pm
A different type of return stream from that of stocks and bonds. It’s a mix of factors, commodities, and I think some merger arbitrage and currency stuff. These have risk but somewhat different risks than just straight stocks and bonds.

Being a Vanguard fund, the expenses are way lower than a lot of the comparable products. But it remains to be seen how good or bad it ends up being for a portfolio and how much is required to make a noticeable dent on the folio’s returns.
What is the expected return stream in relation to stocks and bonds?

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Re: Vgd alt strategies fund (vasfx) open to retail investors?

Post by Theoretical » Sat Jul 28, 2018 6:02 pm

So they are benchmarking to t-bills plus 4%. Tbills have historically low to no correlation to the returns of bonds and stocks. No correlation doesn’t mean negative, so it’s entirely possible it goes negative when stocks or bonds go negative.

Considering the era where alts first arrived on the scene, the inflationary, bond bear market late ‘60s to ‘70s, what they’re trying to do is create an asset for times of combined bad stock and bond returns. Whether it will accomplish that is anyone’s guess.

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Re: Vgd alt strategies fund (vasfx) open to retail investors?

Post by JDDS » Sun Jul 29, 2018 12:30 am

$250k minimum I guess says they will sell it to retail investors, but you'd better have a large portfolio. The only other Vanguard retail fund I can recall having this minimum is the Market Neutral fund. Since admittedly I only somewhat understand the goals and methodologies of these funds, I will not be investing, probably ever.

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Re: Vgd alt strategies fund (vasfx) open to retail investors?

Post by lack_ey » Sun Jul 29, 2018 1:44 am

A lot of times at some brokerages you can probably buy in at less than the stated minimum. I haven't checked here.

This is not a fund I've looked at in any level of detail, but another thing of quick note is that the correlation to stocks and bonds may not be as low as some are thinking or expecting. It's not a market neutral construction, and some of the underlying strategies directly or indirectly get market exposures. Term risk is an explicit area. Of course, there's a lot more to it than that. I'm just saying it's not all alt-type exposures, as is fairly common for alternatives funds.

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Re: Vgd alt strategies fund (vasfx) open to retail investors?

Post by james22 » Sun Jul 29, 2018 3:41 am

Doesn't seem available - tried to Add another Vanguard mutual fund to my Roth and VASFX didn't show.

When Select from a list of our funds/Fund minimum $25,000 and up, only VUSXX, VPGDX, and VMNFX did.
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Re: Vgd alt strategies fund (vasfx) open to retail investors?

Post by grok87 » Sun Jul 29, 2018 7:53 am

james22 wrote:
Sun Jul 29, 2018 3:41 am
Doesn't seem available - tried to Add another Vanguard mutual fund to my Roth and VASFX didn't show.

When Select from a list of our funds/Fund minimum $25,000 and up, only VUSXX, VPGDX, and VMNFX did.
Interesting.

Try calling.

My experience in buying vmnfx some years ago was that I needed to cAll, ie it was not a fund that could be bought online.
Keep calm and Boglehead on. KCBO.

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Re: Vgd alt strategies fund (vasfx) open to retail investors?

Post by nedsaid » Sun Jul 29, 2018 11:36 am

petulant wrote:
Sat Jul 28, 2018 11:15 am
afan wrote:
Sat Jul 28, 2018 10:14 am
A lot of people have that much in retirement accounts and could switch to this fund with no tax implications.

Cannot imagine I would want an alt strategy fund and sure I would not pay 0.79% expense ratio for any fund. Maybe if there is someday an alt index fund with a single digit expense ratio...
I understand a lot of people have a lot in IRAs, but the typical allocation to alternative strategies is 10-20%. So the question is not whether they have $250,000; it's whether they have $1.5-$2M to put a $250K allocation in here.
Yep, I agree. Even here on the Bogleheads, most of us are not fantastically wealthy. I would not put $250K of my portfolio in one alternative strategies fund.
A fool and his money are good for business.

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Re: Vgd alt strategies fund (vasfx) open to retail investors?

Post by whodidntante » Sun Jul 29, 2018 2:51 pm

Has anyone here placed an order for it?

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Re: Vgd alt strategies fund (vasfx) open to retail investors?

Post by grok87 » Sun Jul 29, 2018 8:05 pm

not yet
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Re: Vgd alt strategies fund (vasfx) open to retail investors?

Post by james22 » Sun Jul 29, 2018 9:32 pm

nedsaid wrote:
Sun Jul 29, 2018 11:36 am
petulant wrote:
Sat Jul 28, 2018 11:15 am
afan wrote:
Sat Jul 28, 2018 10:14 am
A lot of people have that much in retirement accounts and could switch to this fund with no tax implications.

Cannot imagine I would want an alt strategy fund and sure I would not pay 0.79% expense ratio for any fund. Maybe if there is someday an alt index fund with a single digit expense ratio...
I understand a lot of people have a lot in IRAs, but the typical allocation to alternative strategies is 10-20%. So the question is not whether they have $250,000; it's whether they have $1.5-$2M to put a $250K allocation in here.
Yep, I agree. Even here on the Bogleheads, most of us are not fantastically wealthy. I would not put $250K of my portfolio in one alternative strategies fund.
Only need $250k buy in - can sell off to your desired allocation a day later.
This whole episode is likely to end so badly that future children will learn about it in school and shake their heads in wonder at the rank stupidity of it all... Hussman

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Re: Vgd alt strategies fund (vasfx) open to retail investors?

Post by nedsaid » Sun Jul 29, 2018 9:37 pm

james22 wrote:
Sun Jul 29, 2018 9:32 pm
nedsaid wrote:
Sun Jul 29, 2018 11:36 am
petulant wrote:
Sat Jul 28, 2018 11:15 am
afan wrote:
Sat Jul 28, 2018 10:14 am
A lot of people have that much in retirement accounts and could switch to this fund with no tax implications.

Cannot imagine I would want an alt strategy fund and sure I would not pay 0.79% expense ratio for any fund. Maybe if there is someday an alt index fund with a single digit expense ratio...
I understand a lot of people have a lot in IRAs, but the typical allocation to alternative strategies is 10-20%. So the question is not whether they have $250,000; it's whether they have $1.5-$2M to put a $250K allocation in here.
Yep, I agree. Even here on the Bogleheads, most of us are not fantastically wealthy. I would not put $250K of my portfolio in one alternative strategies fund.
Only need $250k buy in - can sell off to your desired allocation a day later.
Vanguard isn't stupid, they would probably close the door on this pretty quickly. Hard to run a fund if people buy the $250K minimum and sell most of it the next day.
A fool and his money are good for business.

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Re: Vgd alt strategies fund (vasfx) open to retail investors?

Post by afan » Mon Jul 30, 2018 5:39 am

grok87 wrote:
Sat Jul 28, 2018 10:49 am
afan wrote:
Sat Jul 28, 2018 10:14 am
A lot of people have that much in retirement accounts and could switch to this fund with no tax implications.

Cannot imagine I would want an alt strategy fund and sure I would not pay 0.79% expense ratio for any fund. Maybe if there is someday an alt index fund with a single digit expense ratio...
vanguard has this footnote on the expense ratio.
Vanguard wrote: Excluding borrowing and dividend expenses on securities sold short, the Total Annual Fund Operating Expenses are 0.25%.
Borrowing and dividend expenses are real costs.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

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Re: Vgd alt strategies fund (vasfx) open to retail investors?

Post by afan » Mon Jul 30, 2018 5:47 am

As the estate planning attorneys keep pointing out, having several million in retirement accounts is not that rare. Successful executives and professionals decades into their careers will often have that much. They could pay the minimum.

These are the epitome of actively managed funds. To buy one, you have to decide to ignore the overwhelming mountain of evidence against this approach and decide that THIS particular strategy will work. Makes no sense to me.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

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Re: Vgd alt strategies fund (vasfx) open to retail investors?

Post by grok87 » Mon Jul 30, 2018 6:21 am

afan wrote:
Mon Jul 30, 2018 5:39 am
grok87 wrote:
Sat Jul 28, 2018 10:49 am
afan wrote:
Sat Jul 28, 2018 10:14 am
A lot of people have that much in retirement accounts and could switch to this fund with no tax implications.

Cannot imagine I would want an alt strategy fund and sure I would not pay 0.79% expense ratio for any fund. Maybe if there is someday an alt index fund with a single digit expense ratio...
vanguard has this footnote on the expense ratio.
Vanguard wrote: Excluding borrowing and dividend expenses on securities sold short, the Total Annual Fund Operating Expenses are 0.25%.
Borrowing and dividend expenses are real costs.
it's really a question of consistency with how mutual fund expenses are presented in general, say for long only funds. Long only funds do not reduce their expense ratios for the dividends they pay. Market neutral funds have to add the expense of the dividends on the stocks they are shorting but do not get to offset that with the benefit of the dividends they collect on the stocks they are long on.

not sure how to think about borrowing costs.
Keep calm and Boglehead on. KCBO.

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Re: Vgd alt strategies fund (vasfx) open to retail investors?

Post by james22 » Thu Dec 06, 2018 12:24 pm

Vanguard Alternative Strategies Fund seeks to generate returns that have low correlation with the returns of the stock and bond markets, and that are less volatile than the overall U.S. stock market.

VTSMX -3.32%
VBTIX +0.19%
VASFX -6.24%

:?
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Re: Vgd alt strategies fund (vasfx) open to retail investors?

Post by grok87 » Sat Dec 08, 2018 10:31 am

james22 wrote:
Thu Dec 06, 2018 12:24 pm
Vanguard Alternative Strategies Fund seeks to generate returns that have low correlation with the returns of the stock and bond markets, and that are less volatile than the overall U.S. stock market.

VTSMX -3.32%
VBTIX +0.19%
VASFX -6.24%

:?
what time period is that? YTD VASFX is up like 3%
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Re: Vgd alt strategies fund (vasfx) open to retail investors?

Post by garlandwhizzer » Sat Dec 08, 2018 12:23 pm

I'm not a fan of alternative strategies funds but that's just a personal preference. In general they seem to me to be a solution in search of a problem. Bonds are in my view the best and most reliable diversifier to equity risk. What does interest me is that with its recent offerings (factor funds, alt. strategies), Vanguard seems to have AQR and similar companies directly its sights.

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Re: Vgd alt strategies fund (vasfx) open to retail investors?

Post by james22 » Sat Dec 08, 2018 12:35 pm

grok87 wrote:
Sat Dec 08, 2018 10:31 am
james22 wrote:
Thu Dec 06, 2018 12:24 pm
Vanguard Alternative Strategies Fund seeks to generate returns that have low correlation with the returns of the stock and bond markets, and that are less volatile than the overall U.S. stock market.

VTSMX -3.32%
VBTIX +0.19%
VASFX -6.24%

:?
what time period is that? YTD VASFX is up like 3%
From market open Thu Dec 06, 2018 to 1:24 pm
This whole episode is likely to end so badly that future children will learn about it in school and shake their heads in wonder at the rank stupidity of it all... Hussman

grok87
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Re: Vgd alt strategies fund (vasfx) open to retail investors?

Post by grok87 » Sat Dec 08, 2018 2:15 pm

james22 wrote:
Sat Dec 08, 2018 12:35 pm
grok87 wrote:
Sat Dec 08, 2018 10:31 am
james22 wrote:
Thu Dec 06, 2018 12:24 pm
Vanguard Alternative Strategies Fund seeks to generate returns that have low correlation with the returns of the stock and bond markets, and that are less volatile than the overall U.S. stock market.

VTSMX -3.32%
VBTIX +0.19%
VASFX -6.24%

:?
what time period is that? YTD VASFX is up like 3%
From market open Thu Dec 06, 2018 to 1:24 pm
Hi James,
is it possible you pulled the return for a different ticker symbol? here is what i am seeing on morningstar for vasfx
http://performance.morningstar.com/fund ... ture=en_US
1-day 0.14 %
1 week -0.14%
1 month 1.56%
3 month 3.33%
ytd 3.17%
1 year 2.29%
3 year 2.16%
cheers,
grok
Keep calm and Boglehead on. KCBO.

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Re: Vgd alt strategies fund (vasfx) open to retail investors?

Post by james22 » Sun Dec 09, 2018 6:44 am

I don't seem able to find historical intraday fund prices, but that's what I saw at the time.

Posted because seemed so odd.

Now I'm really curious - was it just a bad quote (Google Finance), a spike?

Anyone?
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Re: Vgd alt strategies fund (vasfx) open to retail investors?

Post by Blake7 » Sun Dec 09, 2018 8:43 am

On VGD’s Institutional site it says “Available only to clients of Vanguard Institutional Advisory Services® (VIAS)”? $250k buy-in is rather steep for those of us used to the proletariat-class funds. ;-) I’m thinking the fund’s 150% turnover rate would only make it only suitable in a tax-deferred account?

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Re: Vgd alt strategies fund (vasfx) open to retail investors?

Post by afan » Sun Dec 09, 2018 8:50 am

grok87 wrote:
Mon Jul 30, 2018 6:21 am
afan wrote:
Mon Jul 30, 2018 5:39 am
grok87 wrote:
Sat Jul 28, 2018 10:49 am
afan wrote:
Sat Jul 28, 2018 10:14 am
A lot of people have that much in retirement accounts and could switch to this fund with no tax implications.

Cannot imagine I would want an alt strategy fund and sure I would not pay 0.79% expense ratio for any fund. Maybe if there is someday an alt index fund with a single digit expense ratio...
vanguard has this footnote on the expense ratio.
Vanguard wrote: Excluding borrowing and dividend expenses on securities sold short, the Total Annual Fund Operating Expenses are 0.25%.
Borrowing and dividend expenses are real costs.
it's really a question of consistency with how mutual fund expenses are presented in general, say for long only funds. Long only funds do not reduce their expense ratios for the dividends they pay. Market neutral funds have to add the expense of the dividends on the stocks they are shorting but do not get to offset that with the benefit of the dividends they collect on the stocks they are long on.

not sure how to think about borrowing costs.

Well of course long only funds do not reduce expense ratios to reflect dividends they pay. Those dividends are paid to the shareholders of the fund. They are part of the return of the fund. Not an expense in any sense.

The dividend expenses for a fund that includes short positions are not paid to the shareholders of the fund. They are paid to the owners of the shares the fund has borrowed. The shareholders of the fund get nothing from these. So they are true expenses.

The long short fund also pays dividends to it's shareholders and these payments are not expenses

The fund that uses leverage has interest expenses on the borrowed amounts. A fund that does not use leverage has no such expenses. Again, these are true expenses.

It helps one understand how the fund works to see how much of the expenses are for shorting and leverage. But these are real expenses.

It comes back to active management. This fund is desirable if one believes the managers can predict outcomes well enough to know which individual staocks to buy long, which to short, when and by how much to leverage, what events represent market beating opportunities and so forth. If you believe in active management then your only task is finding that tiny fraction of managers with enough skill to produce risk adjusted returns above market, after expenses. One would need a reason to think the managers of this fund are in that select group.

As others have pointed out, you can get lower volatility than the market, low or slightly negative correlation with the market and a positive expected return from intermediate term bonds. At much lower cost.

No need to find that needle in a haystack of skilled active managers.
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Re: Vgd alt strategies fund (vasfx) open to retail investors?

Post by Blake7 » Sun Dec 09, 2018 8:52 am

Blake7 wrote:
Sun Dec 09, 2018 8:43 am
On Vanguard’s Institutional site it says “Available only to clients of Vanguard Institutional Advisory Services® (VIAS)”? $250k buy-in is rather steep for those of us used to the proletariat-class funds. ;-) I’m thinking the fund’s 150% turnover rate would only make it only suitable in a tax-deferred account?
Edit: I see this thread is a few months old. Anyone end up buying this fund?

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Re: Vgd alt strategies fund (vasfx) open to retail investors?

Post by jhfenton » Sun Dec 09, 2018 9:42 am

james22 wrote:
Sun Dec 09, 2018 6:44 am
I don't seem able to find historical intraday fund prices, but that's what I saw at the time.

Posted because seemed so odd.

Now I'm really curious - was it just a bad quote (Google Finance), a spike?

Anyone?
VASFX is a mutual fund. There are no intraday prices.

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Re: Vgd alt strategies fund (vasfx) open to retail investors?

Post by james22 » Sun Dec 09, 2018 10:46 am

Yeah, seems only fell the 4th from 20.92 to 20.79.

Must be just another bad Google Finance quote since the revamp.
This whole episode is likely to end so badly that future children will learn about it in school and shake their heads in wonder at the rank stupidity of it all... Hussman

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Re: Vgd alt strategies fund (vasfx) open to retail investors?

Post by talzara » Sun Dec 09, 2018 11:44 am

grok87 wrote:
Mon Jul 30, 2018 6:21 am
it's really a question of consistency with how mutual fund expenses are presented in general, say for long only funds. Long only funds do not reduce their expense ratios for the dividends they pay. Market neutral funds have to add the expense of the dividends on the stocks they are shorting but do not get to offset that with the benefit of the dividends they collect on the stocks they are long on.

not sure how to think about borrowing costs.
Borrowing expenses are very low. The latest annual report shows borrowing expenses of 0.00%, 0.00%, and 0.03% for the last three years.

The annual report says that the fund does merger arbitrage. This means shorting the acquirer's stock and buying the acquiree's stock. Since the acquirer is usually a larger company than the acquiree, the fund will be shorting the stock that is easier to borrow.

However, you can't offset the borrowing costs like you can the dividends. Nobody wants to borrow the acquiree's stock, so the long position cannot earn any borrowing fees.

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Re: Vgd alt strategies fund (vasfx) open to retail investors?

Post by talzara » Sun Dec 09, 2018 12:14 pm

afan wrote:
Sun Dec 09, 2018 8:50 am
grok87 wrote:
Mon Jul 30, 2018 6:21 am
it's really a question of consistency with how mutual fund expenses are presented in general, say for long only funds. Long only funds do not reduce their expense ratios for the dividends they pay. Market neutral funds have to add the expense of the dividends on the stocks they are shorting but do not get to offset that with the benefit of the dividends they collect on the stocks they are long on.

not sure how to think about borrowing costs.
Well of course long only funds do not reduce expense ratios to reflect dividends they pay. Those dividends are paid to the shareholders of the fund. They are part of the return of the fund. Not an expense in any sense.
The accounting rules are asymmetrical. When a position is hedged, the dividends are not part of the fund's returns. However, the expense ratio includes the dividends paid on short shares, without an offset for dividends received on long shares.

For example, you could buy Royal Dutch Shell in London and short it in Amsterdam. The dividends are identical, so the net dividend expenses are zero. However, you still have to report the dividends on the Dutch shares as an expense. There is no credit for the dividends on the British shares.

A 130/30 fund would receive dividends on 130% of net asset value and pay dividends on 30% of net asset value. The fund's net long exposure is 100%, and the investor receives dividends only on that 100%. However, the 30% still has to be reported as an expense.

It's not as clear-cut, though. Royal Dutch Shell pays the same dividends on the British and Dutch shares. Vanguard Alternative Strategies is buying and shorting different companies, which pay different dividends.

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Re: Vgd alt strategies fund (vasfx) open to retail investors?

Post by grok87 » Sun Dec 09, 2018 6:36 pm

talzara wrote:
Sun Dec 09, 2018 12:14 pm
afan wrote:
Sun Dec 09, 2018 8:50 am
grok87 wrote:
Mon Jul 30, 2018 6:21 am
it's really a question of consistency with how mutual fund expenses are presented in general, say for long only funds. Long only funds do not reduce their expense ratios for the dividends they pay. Market neutral funds have to add the expense of the dividends on the stocks they are shorting but do not get to offset that with the benefit of the dividends they collect on the stocks they are long on.

not sure how to think about borrowing costs.
Well of course long only funds do not reduce expense ratios to reflect dividends they pay. Those dividends are paid to the shareholders of the fund. They are part of the return of the fund. Not an expense in any sense.
The accounting rules are asymmetrical. When a position is hedged, the dividends are not part of the fund's returns. However, the expense ratio includes the dividends paid on short shares, without an offset for dividends received on long shares.

For example, you could buy Royal Dutch Shell in London and short it in Amsterdam. The dividends are identical, so the net dividend expenses are zero. However, you still have to report the dividends on the Dutch shares as an expense. There is no credit for the dividends on the British shares.

A 130/30 fund would receive dividends on 130% of net asset value and pay dividends on 30% of net asset value. The fund's net long exposure is 100%, and the investor receives dividends only on that 100%. However, the 30% still has to be reported as an expense.

It's not as clear-cut, though. Royal Dutch Shell pays the same dividends on the British and Dutch shares. Vanguard Alternative Strategies is buying and shorting different companies, which pay different dividends.
good example
Keep calm and Boglehead on. KCBO.

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