Vanguard lowering Admiral level to $3,000?

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DartThrower
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Admiral share class for total world stock

Post by DartThrower »

Anyone have a guess as to when an admiral share class for this fund (VTWSX) might become available? Is it tied to reaching a certain threshold in total net assets? The current total net assets are almost $17b. I don't like paying more than 10 bp for any index fund.
Thanks.
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arcticpineapplecorp.
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Re: Admiral share class for total world stock

Post by arcticpineapplecorp. »

the fund costs 0.19%
https://investor.vanguard.com/mutual-fu ... file/VTWSX
the ETF costs 0.10%
https://investor.vanguard.com/etf/profile/vt
Buy the ETF instead of the Fund (VT)

As to when they will offer admiral shares, I don't know.
Last edited by arcticpineapplecorp. on Sat Nov 10, 2018 10:49 am, edited 1 time in total.
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Re: Admiral share class for total world stock

Post by stan1 »

DartThrower wrote: Sat Nov 10, 2018 10:34 am Anyone have a guess as to when an admiral share class for this fund (VTWSX) might become available? Is it tied to reaching a certain threshold in total net assets? The current total net assets are almost $17b. I don't like paying more than 10 bp for any index fund.
Thanks.
Currently $15.1B of the $16.9B are in the ETF share class leaving $1.8B in the investor share class mutual fund. There's no way to predict what Vanguard will do but that's a relatively small amount and appears most investors are using the ETF.

In a tax deferred account I'd just use Total Stock Market and Total International Stock Market and rebalance once or twice per year. Right now the ratio is about 55% US to 45% Rest of World.

The other option is to use the ETF.
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Re: Admiral share class for total world stock

Post by DSInvestor »

If you prefer to stick to mutual fund shares, consider a mix of Vanguard Total Stock Market Index Admiral VTSAX er=0.04% plus Vanguard Total International Stock Admiral VTIAX er=0.11%. The weighted average expense ratio of these two funds should be lower than the 0.10% expense ratio of the Total World ETF.
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arcticpineapplecorp.
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Re: Admiral share class for total world stock

Post by arcticpineapplecorp. »

DSInvestor wrote: Sat Nov 10, 2018 10:47 am If you prefer to stick to mutual fund shares, consider a mix of Vanguard Total Stock Market Index Admiral VTSAX er=0.04% plus Vanguard Total International Stock Admiral VTIAX er=0.11%. The weighted average expense ratio of these two funds should be lower than the 0.10% expense ratio of the Total World ETF.
I was going to suggest this as a second option to just buying the ETF for 0.10%.
If you do 50/50 U.S./International (total stock market for both) the admiral share classes total would be 0.075%.

total U.S. 0.04%
total international 0.11%

(.50 X .04) + (.50 X .11) = 0.075%

7 1/2 bps.
Last edited by arcticpineapplecorp. on Sat Nov 10, 2018 2:19 pm, edited 3 times in total.
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Re: Admiral share class for total world stock

Post by Earl Lemongrab »

stan1 wrote: Sat Nov 10, 2018 10:44 am In a tax deferred account I'd just use Total Stock Market and Total International Stock Market and rebalance once or twice per year. Right now the ratio is about 55% US to 45% Rest of World.
If you always buy at market weight, there would not be a reason to rebalance. The only reason for rebalancing is if you wanted a constant ratio between the two.
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Re: Admiral share class for total world stock

Post by jibantik »

If we get admiral shares for total world it will be the happiest day I've had in the past 5 years. And I got married recently :shock:
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Re: Admiral share class for total world stock

Post by your IPS »

stan1 wrote: Sat Nov 10, 2018 10:44 am In a tax deferred account I'd just use Total Stock Market and Total International Stock Market and rebalance once or twice per year. Right now the ratio is about 55% US to 45% Rest of World.
I think there's value in keeping them separate even in a taxable account. You can tax loss harvest when one is down but not the other (e.g. international for much of this year).
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Re: Admiral share class for total world stock

Post by drk »

This forum sometimes tends to miss the forest for the trees. We're talking about a difference of less than one-tenth of one percent. On $1 million in Investor shares, you pay $1900 annually. In the ETF, you pay $1000. Is $900 a year nothing? No, of course not, but it's a really small marginal difference. You can net the same amount of money every year by opening one premium credit card with a high sign-up bonus.

Granted, focusing on this difference is more reasonable than the people going bonkers over Fidelity's nominally free index funds.
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Re: Admiral share class for total world stock

Post by DartThrower »

stan1 wrote: Sat Nov 10, 2018 10:44 am

Currently $15.1B of the $16.9B are in the ETF share class leaving $1.8B in the investor share class mutual fund. There's no way to predict what Vanguard will do but that's a relatively small amount and appears most investors are using the ETF.

In a tax deferred account I'd just use Total Stock Market and Total International Stock Market and rebalance once or twice per year. Right now the ratio is about 55% US to 45% Rest of World.

The other option is to use the ETF.
It didn't occur to me that such a disproportionate amout was with the ETF.

Thanks for the replies. I guess I'm curious about the process by which Vanguard makes the decision to offer Admiral shares. Since I am near retirement age I have a significant amount to potentially devote to that fund, but as it stands now I just use admiral versions of TSM and TISM and roughly mirror the fund. You're right, I could bite the bullet and start investing in ETFs, but I'm more comfortable with mutual funds. The savings is meaningful in my case.

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Re: Admiral share class for total world stock

Post by JoMoney »

If it ever happens, my guess would be that the "Institutional class" version of the fund VTWIX would at some point be converted to admiral class. There was another fund, I can't remember off hand, that had the admiral class created that way.
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Re: Admiral share class for total world stock

Post by asset_chaos »

Total world investor share cost 50 bp when the fund had 100 million in assets and cost 20 bp when it had 1 billion. From memory the fund's fiscal year ends in October. Sometime in December perhaps we'll be able to look at the annual report to see what the actual expenses of the fund were over the last 12 months. For several years the actual expenses have been lower than the headline prospectus expense ratio and have foreshadowed an announcement around February that the expense ratio was being lowered.

I wrote the following last year in a thread ( viewtopic.php?f=10&t=212013&hilit=cost+total+world) about total world's cost,
Vanguard data says as of end of January [2017], total world investor shares have $1.2 billion, institutional $1.8 billion and total assets of $9.6 b. Only speculation, but with investor shares now over a billion in assets, perhaps that's a breakpoint at which they'd look at adding admiral shares. Perhaps the difficulty is that most/all of the investor shares would convert to admiral class, if it existed, in which case they couldn't lower the er of most/all of the share class today by 10 bp ($1.2 million) and still run the share class at cost, since it costs 21 bp ($2.5 million) to run today. Again speculation, but we may have to wait until investor share assets get around $2.5 billion before we see admiral shares.
If it still costs around $2.5 million to run the investor share class of total world and most of the shareholders have more than the $10k for admiral shares, then we're probably going to have to wait for total world to put on another 0.7 billion or so to be able to seriously expect admiral shares for 10 bp: another year or two's worth of asset growth unless lower stock markets drag assets down. And, if the costs come down even without creating an admiral share class, I won't complain about not being promoted to admiral.
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Re: Admiral share class for total world stock

Post by alex_686 »

DartThrower wrote: Sat Nov 10, 2018 5:26 pm I guess I'm curious about the process by which Vanguard makes the decision to offer Admiral shares.
I doubt that Vanguard will every offer Admiral shares again. The ETF structure is cheaper to run a mutual fund structure. ETFs are the future.
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Re: Admiral share class for total world stock

Post by jibantik »

drk wrote: Sat Nov 10, 2018 2:39 pm This forum sometimes tends to miss the forest for the trees. We're talking about a difference of less than one-tenth of one percent. On $1 million in Investor shares, you pay $1900 annually. In the ETF, you pay $1000. Is $900 a year nothing? No, of course not, but it's a really small marginal difference. You can net the same amount of money every year by opening one premium credit card with a high sign-up bonus.

Granted, focusing on this difference is more reasonable than the people going bonkers over Fidelity's nominally free index funds.
I get your point, but you also lose out on the compounded returns of the $1900.

$1900 every year compounded over an investment lifetime is actually quite a bit. Assuming Smartvestor pro returns of 12%, over 40 years, $1900 dollars invested annualy is equivalent to 1.6 million dollars.
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Re: Admiral share class for total world stock

Post by software »

jibantik wrote: Sat Nov 10, 2018 2:21 pm If we get admiral shares for total world it will be the happiest day I've had in the past 5 years. And I got married recently :shock:
That’s pretty sad actually...
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Re: Admiral share class for total world stock

Post by stan1 »

jibantik wrote: Sat Nov 10, 2018 8:47 pm
$1900 every year compounded over an investment lifetime is actually quite a bit. Assuming Smartvestor pro returns of 12%, over 40 years, $1900 dollars invested annualy is equivalent to 1.6 million dollars.
12% per year over 40 years? Good luck with that!
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Re: Admiral share class for total world stock

Post by Dead Man Walking »

alex_686 wrote: Sat Nov 10, 2018 6:57 pm
DartThrower wrote: Sat Nov 10, 2018 5:26 pm I guess I'm curious about the process by which Vanguard makes the decision to offer Admiral shares.
I doubt that Vanguard will every offer Admiral shares again. The ETF structure is cheaper to run a mutual fund structure. ETFs are the future.
+1 Furthermore, the popularity of ETFs may be a significant reason why they are pushing the brokerage platform.

DMW
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Re: Admiral share class for total world stock

Post by lostdog »

Dead Man Walking wrote: Sat Nov 10, 2018 9:53 pm
alex_686 wrote: Sat Nov 10, 2018 6:57 pm
DartThrower wrote: Sat Nov 10, 2018 5:26 pm I guess I'm curious about the process by which Vanguard makes the decision to offer Admiral shares.
I doubt that Vanguard will every offer Admiral shares again. The ETF structure is cheaper to run a mutual fund structure. ETFs are the future.
+1 Furthermore, the popularity of ETFs may be a significant reason why they are pushing the brokerage platform.

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It would be nice to know for sure if this is the case.
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Re: Admiral share class for total world stock

Post by drk »

jibantik wrote: Sat Nov 10, 2018 8:47 pm
drk wrote: Sat Nov 10, 2018 2:39 pm This forum sometimes tends to miss the forest for the trees. We're talking about a difference of less than one-tenth of one percent. On $1 million in Investor shares, you pay $1900 annually. In the ETF, you pay $1000. Is $900 a year nothing? No, of course not, but it's a really small marginal difference. You can net the same amount of money every year by opening one premium credit card with a high sign-up bonus.

Granted, focusing on this difference is more reasonable than the people going bonkers over Fidelity's nominally free index funds.
I get your point, but you also lose out on the compounded returns of the $1900.

$1900 every year compounded over an investment lifetime is actually quite a bit. Assuming Smartvestor pro returns of 12%, over 40 years, $1900 dollars invested annualy is equivalent to 1.6 million dollars.
Wait, that's $900, not $1900.

I also question the assumption that someone sitting at $1 million in VT/VTWSX today has 40 years of compounding in their future, but that's beside the point.
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Re: Admiral share class for total world stock

Post by asset_chaos »

alex_686 wrote: Sat Nov 10, 2018 6:57 pmI doubt that Vanguard will every offer Admiral shares again. The ETF structure is cheaper to run a mutual fund structure. ETFs are the future.
Evidence is mixed. On the one hand, Vanguard launched the multifactor fund this year with admiral and etf share classes. On the other hand, Vanguard launched the total world bond fund this year with only the etf share class. Outside the US, Vanguard still seems to prefer to have three share classes of funds, retail, wholesale, and etf. At least in Australia the wholesale shares have minimum investment amounts much larger than US admiral shares but much lower than US institutional shares; they're close to the $100k admiral share minimums were when admiral shares were first introduced.
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Re: Admiral share class for total world stock

Post by alex_686 »

asset_chaos wrote: Sat Nov 10, 2018 11:47 pm
alex_686 wrote: Sat Nov 10, 2018 6:57 pmI doubt that Vanguard will every offer Admiral shares again. The ETF structure is cheaper to run a mutual fund structure. ETFs are the future.
Evidence is mixed. On the one hand, Vanguard launched the multifactor fund this year with admiral and etf share classes. On the other hand, Vanguard launched the total world bond fund this year with only the etf share class. Outside the US, Vanguard still seems to prefer to have three share classes of funds, retail, wholesale, and etf. At least in Australia the wholesale shares have minimum investment amounts much larger than US admiral shares but much lower than US institutional shares; they're close to the $100k admiral share minimums were when admiral shares were first introduced.
I read the other week that ETFs were not popular in Australia. That brokers can get a commission when selling mutual funds but not ETFs. Mutual funds still have a slight edge over ETFs in mutual funds in the US.
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Re: Admiral share class for total world stock

Post by asset_chaos »

alex_686 wrote: Sun Nov 11, 2018 7:58 am
asset_chaos wrote: Sat Nov 10, 2018 11:47 pm
alex_686 wrote: Sat Nov 10, 2018 6:57 pmI doubt that Vanguard will every offer Admiral shares again. The ETF structure is cheaper to run a mutual fund structure. ETFs are the future.
Evidence is mixed. On the one hand, Vanguard launched the multifactor fund this year with admiral and etf share classes. On the other hand, Vanguard launched the total world bond fund this year with only the etf share class. Outside the US, Vanguard still seems to prefer to have three share classes of funds, retail, wholesale, and etf. At least in Australia the wholesale shares have minimum investment amounts much larger than US admiral shares but much lower than US institutional shares; they're close to the $100k admiral share minimums were when admiral shares were first introduced.
I read the other week that ETFs were not popular in Australia. That brokers can get a commission when selling mutual funds but not ETFs. Mutual funds still have a slight edge over ETFs in mutual funds in the US.
I'm not sure about relative popularity. But it is the case that that cost difference of Vanguard AU ETFs and retail share funds is much larger than in the US. E.g., it's 14 vs 75 bp for the Australian ASX300 stock index fund. And I see there is only 0.5 billion in the retail fund, while there is 3 billion in the etf. On the other hand, the wholesale fund has 10 billion and costs 18 bp. The wholesale fund has gotten onto the investment menu of several well-run superannuation/retirement funds.
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Re: Admiral share class for total world stock

Post by DartThrower »

It's interesting that the brand new Vanguard Global Credit Bond Fund has an Admiral Share class already (VGCAX).
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Re: Admiral share class for total world stock

Post by stan1 »

DartThrower wrote: Fri Nov 16, 2018 8:27 am It's interesting that the brand new Vanguard Global Credit Bond Fund has an Admiral Share class already (VGCAX).
It's actively managed so the minimum is $50K. Perhaps it is part of a strategy to attract assets to this new fund and Vanguard feels they don't need to do that with Total World?
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Re: Admiral share class for total world stock

Post by stan1 »

As for admiral shares in general remember Vanguard still hasn't offered them for Target Retirement or LifeStrategy fund of funds. There might be some complexity in promoting a fund of funds investment in a taxable account to Admiral shares but they could certainly offer them for new investments and in retirement accounts if they chose to do so. A lot of the assets under management that are still in investor shares could be tied up in funds of funds. I didn't take the time to add up the value of all the different funds of funds but it looks like its $150-200B split out into TSM, TISM, TBM, and TBM II investor shares. I don't think we've ever heard from Vanguard why they haven't offered Admiral shares for these funds.
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Vanguard lowering Admiral level to $3,000?

Post by harvestbook »

[Thread merged into here, see below (Page 4). --LadyGeek]

I logged in this morning to buy in my Vanguard IRA and it flagged my Total Bond fund (which has just over $3,000) as eligible for admiral shares. I tried to convert and the message said 40 Vanguard funds would now have Admiral levels of $3,000. The conversion didn't carry through, as I received a "You have no eligible funds" message. All my other funds in there are already Admiral.

Has anyone else seen or heard this?
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Re: Vanguard lowering Admiral level to $3,000?

Post by linenfort »

Interesting. It does say $3,000 on the official page.
https://investor.vanguard.com/mutual-fu ... file/vbtlx

P.S. Here’s the page on the change. 38 index funds.
https://investornews.vanguard/our-index ... en-better/
Last edited by linenfort on Mon Nov 19, 2018 9:22 am, edited 2 times in total.
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Re: Vanguard lowering Admiral level to $3,000?

Post by stimulacra »

That's good news :)

I was concerned that some of my slice-and-dice funds would eventually get downgraded to investor shares if this volatility keeps up.
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Re: Vanguard lowering Admiral level to $3,000?

Post by dwickenh »

You can now own lower-cost Admiral™ Shares for almost 40 of our index mutual funds for a minimum of just $3,000 each.

If higher minimums were keeping you from converting, select Yes below to find out if you can start saving money today.

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Re: Vanguard lowering Admiral level to $3,000?

Post by LinusP »

VBMFX and VTSMX (investor shares of you're bond and your stock) both say they're closed. :shock:
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Re: Vanguard lowering Admiral level to $3,000?

Post by retiringwhen »

I just did a search of the Vanguard Mutual funds page, set the minimum Investment amount in the Filter to $3,000, then got back a list of 109 funds, I did a Chrome page search and got back 38 funds with the name Admiral in the name.

Seems like a significant number of funds have had their min balance reduced.
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Re: Vanguard lowering Admiral level to $3,000?

Post by arf30 »

VTSMX is showing up as a closed fund and VTSAX has a 3k minimum, awesome.
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Re: Vanguard lowering Admiral level to $3,000?

Post by Spirit Rider »

I checked Vanguard just now. The minimum purchase on many Admiral Shares is $3,000 and the Investor Shares are closed.

It looks that like Fidelity did, they are consolidating classes, just at $3,000 minimum investment.

Competition is a good thing.
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Re: Vanguard lowering Admiral level to $3,000?

Post by Vulcan »

Still no admiral shares for VTWSX (Total World Stock).
I'd love to get out of the ETF business and back to the mutual funds.
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Re: Vanguard lowering Admiral level to $3,000?

Post by Mountain Doc »

I can only assume these Admiral funds will be available even when buying Vanguard funds through other brokerages.
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Re: Vanguard lowering Admiral level to $3,000?

Post by ReformedSpender »

Great news. Way to go Vanguard

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Re: Vanguard lowering Admiral level to $3,000?

Post by arf30 »

Would be nice if Vanguard opened up admiral shares to other brokerages that previously only had investor shares available now that they'll be closed.
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Re: Vanguard lowering Admiral level to $3,000?

Post by sbaywriter »

I checked my account online just now - one fund was flagged as "eligible to convert", with a "convert to Admiral" link. But when I clicked on it, it then told me it was not eligible to convert. So UI looks a bit buggy right now.
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Re: Vanguard lowering Admiral level to $3,000?

Post by pqwerty »

Cool, I tried to convert but it didn't work. Gave me the option with TBM ... then when I accepted the conditions it came back with "No eligible funds found". Oh well, guess let them work it out and try again later.
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Re: Vanguard lowering Admiral level to $3,000?

Post by Outafter20 »

The million dollar question - will the LifeStrategy and Target Retirement funds use the Admiral shares now?
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Re: Vanguard lowering Admiral level to $3,000?

Post by indexfundfan »

Wow, another positive change. Admiral index fund shares used to require $250k, then it dropped to $100k, then to $10k and now $3k (one class).
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Re: Vanguard lowering Admiral level to $3,000?

Post by retiringwhen »

pqwerty wrote: Mon Nov 19, 2018 9:43 am Cool, I tried to convert but it didn't work. Gave me the option with TBM ... then when I accepted the conditions it came back with "No eligible funds found". Oh well, guess let them work it out and try again later.
I wouldn't bother, the announcement today says they are eliminating the Investor Shares for Index funds (most of them) They'll automatically convert them on some schedule. I would expect you'll get an email about then. They will be doing millions of conversions, so I am sure they desire to do that in bulk :-)
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Re: Vanguard lowering Admiral level to $3,000?

Post by ResearchMed »

The ever present asterisk:

"*Investor Shares will still be used in certain situations, such as in retirement plans and fund-of-funds investments."

Too bad.

What percent of Vanguard holdings are in "retirement plans" - anyone know approximately?

RM
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Re: Vanguard lowering Admiral level to $3,000?

Post by Outafter20 »

ResearchMed wrote: Mon Nov 19, 2018 9:48 am The ever present asterisk:

"*Investor Shares will still be used in certain situations, such as in retirement plans and fund-of-funds investments."

Too bad.

What percent of Vanguard holdings are in "retirement plans" - anyone know approximately?

RM
Ah I missed that.
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Re: Vanguard lowering Admiral level to $3,000?

Post by HAWK23 »

Strange. The little button to convert to admiral shares shows up for me on my VTSMX and VGTSX but when I click to convert it says I don't have enough even though I have 4K In each.
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Re: Vanguard lowering Admiral level to $3,000?

Post by HAWK23 »

retiringwhen wrote: Mon Nov 19, 2018 9:48 am
pqwerty wrote: Mon Nov 19, 2018 9:43 am Cool, I tried to convert but it didn't work. Gave me the option with TBM ... then when I accepted the conditions it came back with "No eligible funds found". Oh well, guess let them work it out and try again later.
I wouldn't bother, the announcement today says they are eliminating the Investor Shares for Index funds (most of them) They'll automatically convert them on some schedule. I would expect you'll get an email about then. They will be doing millions of conversions, so I am sure they desire to do that in bulk :-)
Same with me
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Re: Vanguard lowering Admiral level to $3,000?

Post by barnaclebob »

HAWK23 wrote: Mon Nov 19, 2018 9:50 am Strange. The little button to convert to admiral shares shows up for me on my VTSMX and VGTSX but when I click to convert it says I don't have enough even though I have 4K In each.
Same here, but I did just purchase these shares (REIT Index) on Thursday.
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Re: Vanguard lowering Admiral level to $3,000?

Post by jtdavid »

As a substantial holder and advocate of Lifestrategy funds for their simplicity and inherent behavioral advantages, for some reason this announcement is extra annoying to me. Maybe they will come out with Admiral shares of the all-in-one funds with a high-dollar minimum to compensate...for a company that advocates "simplicity" it seems like that is something they should do...
Jags4186
Posts: 5474
Joined: Wed Jun 18, 2014 7:12 pm

Re: Vanguard lowering Admiral level to $3,000?

Post by Jags4186 »

Where is the convert to Admiral shares button? I cannot seem to locate it.
backslash2718
Posts: 28
Joined: Tue Feb 14, 2017 3:07 pm
Location: Washington DC

Re: Vanguard lowering Admiral level to $3,000?

Post by backslash2718 »

Hmm, interesting! Any thoughts/news on how it will affect ER on LifeStrategy and Target Retirement Funds, since I believe those always required to use Investor shares over Admiral?
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