Vanguard lowering Admiral level to $3,000?

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Engineer250
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Re: Vanguard lowering Admiral level to $3,000?

Post by Engineer250 » Mon Nov 19, 2018 1:17 pm

jhfenton wrote:
Mon Nov 19, 2018 12:45 pm
jhfenton wrote:
Mon Nov 19, 2018 12:42 pm
integrity wrote:
Mon Nov 19, 2018 12:29 pm
https://www.wsj.com/articles/vanguard-r ... 1542636000

For those not behind the paywall.
Starting Monday, the firm is lowering the minimums for admiral shares—a share class that costs less than regular investor classes—to $3,000 from $10,000 for 38 index mutual funds. The funds make up the majority of Vanguard’s index funds that are available to individual investors and include some of the industry’s largest stock and bond index funds.
The other quote of interest to me:
The firm is also launching new admiral shares on five index funds with those new minimums.
Does anyone know what these are? Someone mentioned Total World in a separate thread. Is my VSS/VFSVX (All-World ex-US Small Cap) dream coming true?
And the answer is YES! Per an SEC filing today.

https://www.sec.gov/Archives/edgar/data ... -index.htm
That’s exciting. There have been a few threads about this fund for a while. Based on those threads I contacted Vanguard and told them I was interested in this fund getting its own admiral class. I figured customer feedback couldn’t hurt.

Like everyone else I am getting the “you have no eligible funds” message even though I do. Also my brokerage option inside my 401k doesn’t have the same icons so I suspect I will have to manually exchange those for the admiral. But I’m okay with that. I can be patient and wait a couple weeks while they work out the kinks.
Where the tides of fortune take us, no man can know.

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

Post by Whakamole » Mon Nov 19, 2018 1:17 pm

jhfenton wrote:
Mon Nov 19, 2018 12:45 pm
jhfenton wrote:
Mon Nov 19, 2018 12:42 pm
integrity wrote:
Mon Nov 19, 2018 12:29 pm
https://www.wsj.com/articles/vanguard-r ... 1542636000

For those not behind the paywall.
Starting Monday, the firm is lowering the minimums for admiral shares—a share class that costs less than regular investor classes—to $3,000 from $10,000 for 38 index mutual funds. The funds make up the majority of Vanguard’s index funds that are available to individual investors and include some of the industry’s largest stock and bond index funds.
The other quote of interest to me:
The firm is also launching new admiral shares on five index funds with those new minimums.
Does anyone know what these are? Someone mentioned Total World in a separate thread. Is my VSS/VFSVX (All-World ex-US Small Cap) dream coming true?
And the answer is YES! Per an SEC filing today.

https://www.sec.gov/Archives/edgar/data ... -index.htm
Looks to be 16bp for Admiral shares, vs 13bp for VSS. A difference so small, go with your preferred vehicle, and Admiral shares ER will go down if people switch (as I probably will.)

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

Post by jhfenton » Mon Nov 19, 2018 1:23 pm

Whakamole wrote:
Mon Nov 19, 2018 1:17 pm
Looks to be 16bp for Admiral shares, vs 13bp for VSS. A difference so small, go with your preferred vehicle, and Admiral shares ER will go down if people switch (as I probably will.)
Agreed. I noted the same thing in the thread discussing the new Admiral shares for Total World.

VSS is our largest position. I will probably move all of it to the new Admiral Shares.

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

Post by retiringwhen » Mon Nov 19, 2018 1:26 pm

jhfenton wrote:
Mon Nov 19, 2018 1:23 pm
Whakamole wrote:
Mon Nov 19, 2018 1:17 pm
Looks to be 16bp for Admiral shares, vs 13bp for VSS. A difference so small, go with your preferred vehicle, and Admiral shares ER will go down if people switch (as I probably will.)
Agreed. I noted the same thing in the thread discussing the new Admiral shares for Total World.

VSS is our largest position. I will probably move all of it to the new Admiral Shares.
Total World Stock Admiral appears to have a 10bps ER. That is similar to holding the same portfolio mix of VXUS and VTI.

I am likely to move a significant chunk of our smaller IRA/Roth Accounts into this fund so I can have one fund across a pile of accounts for tracking simplicity (I have some US And International mixed as the AA requires.)

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

Post by retiringwhen » Mon Nov 19, 2018 1:28 pm

Engineer250 wrote:
Mon Nov 19, 2018 1:17 pm
Like everyone else I am getting the “you have no eligible funds” message even though I do. Also my brokerage option inside my 401k doesn’t have the same icons so I suspect I will have to manually exchange those for the admiral. But I’m okay with that. I can be patient and wait a couple weeks while they work out the kinks.
I am going out on a limb, but I predict your 401(K) funds will not be eligible for the Admiral....

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

Post by alpenglow » Mon Nov 19, 2018 1:31 pm

Outafter20 wrote:
Mon Nov 19, 2018 9:47 am
The million dollar question - will the LifeStrategy and Target Retirement funds use the Admiral shares now?
Great question. If investor shares are gone, it would make sense that Lifestrategy/TR funds would use Admiral shares. Fingers crossed.

Edit: I guess I should read the whole thread first!!!
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
Boo. :?
Last edited by alpenglow on Mon Nov 19, 2018 1:36 pm, edited 1 time in total.

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

Post by Phineas J. Whoopee » Mon Nov 19, 2018 1:34 pm

Silk McCue wrote:
Mon Nov 19, 2018 10:15 am
rkhusky wrote:
Mon Nov 19, 2018 10:08 am
Hope they don't raise the ER on Admiral to compensate for higher costs.
That would be massively stupid. I think you can rest easy that they don't have a shotgun pointed at their foot waiting to do that.

Cheers
Vanguard reports expense ratios after the fact, based on actual costs and net asset values. They don't raise or lower them. What the change will mean for expense ratios remains to be seen, but when they lowered the minimum for admiral shares to $10,000 there was no reported increase.

That said, wow. I remember how pleased I was when my Total Stock stake finally was eligible for the lower expense ratio. The minimum for admiral was $100,000 at the time.

PJW

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

Post by vineviz » Mon Nov 19, 2018 1:36 pm

jhfenton wrote:
Mon Nov 19, 2018 12:42 pm
Does anyone know what these are? Someone mentioned Total World in a separate thread. Is my VSS/VFSVX (All-World ex-US Small Cap) dream coming true?
The five funds are:
  • Vanguard FTSE Social Index Fund
  • Vanguard FTSE All-World ex-US Small Cap Index Fund
  • Vanguard High Dividend Yield Index Fund
  • Vanguard Long-Term Bond Index Fund
  • Vanguard Total World Stock Index Fund.
"The new shares are expected to be available for investment in the first quarter of 2019 and, with the new lowered minimum of $3,000."
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

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

Post by columbia » Mon Nov 19, 2018 1:40 pm

retiringwhen wrote:
Mon Nov 19, 2018 1:28 pm
Engineer250 wrote:
Mon Nov 19, 2018 1:17 pm
Like everyone else I am getting the “you have no eligible funds” message even though I do. Also my brokerage option inside my 401k doesn’t have the same icons so I suspect I will have to manually exchange those for the admiral. But I’m okay with that. I can be patient and wait a couple weeks while they work out the kinks.
I am going out on a limb, but I predict your 401(K) funds will not be eligible for the Admiral....
Maybe.

My 403b has had 4 Vanguard funds for about three years: Admiral shares from day 1, with no minimum balance.

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

Post by jhfenton » Mon Nov 19, 2018 1:41 pm

vineviz wrote:
Mon Nov 19, 2018 1:36 pm
jhfenton wrote:
Mon Nov 19, 2018 12:42 pm
Does anyone know what these are? Someone mentioned Total World in a separate thread. Is my VSS/VFSVX (All-World ex-US Small Cap) dream coming true?
The five funds are:
  • Vanguard FTSE Social Index Fund
  • Vanguard FTSE All-World ex-US Small Cap Index Fund
  • Vanguard High Dividend Yield Index Fund
  • Vanguard Long-Term Bond Index Fund
  • Vanguard Total World Stock Index Fund.
"The new shares are expected to be available for investment in the first quarter of 2019 and, with the new lowered minimum of $3,000."
Thanks. :beer I gave up looking for the five, once I found that the one I cared about was included. :D

Total World and ex-US Small Cap were definitely the two most-requested missing Admiral shares.

I would guess at availability in mid-January. The filings for Total World and ex-US Small Cap were marked as effective 60 days from today. That would be January 18, 2019.

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

Post by MathWizard » Mon Nov 19, 2018 1:42 pm

Svensk Anga wrote:
Mon Nov 19, 2018 10:15 am
Sorry, but I do not see this as a positive for me, though it is nice for those just starting out.

Vanguard runs their funds at cost. This change means that the Admiral class will now have to absorb the costs of serving all of those small accounts. It will put upward pressure on the Admiral class expense ratio. As I understand it, Vanguard calculates expense ratios after the fact. I would expect to see some upward revisions in Admiral ER's next year, breaking the trend of slowly declining rates.
I would not expect this.
This will lure more starting investors with IRAs.
Given the $ 5500, going to $6000 limit on IRAs, The $10k limit on
Admiral funds statred people out with an ER of .18%. vs .04%
This may have kept new investors away from Vanguard starting out. The amounts were small in VTSMX, so the extra 0.14% ER woun't amount to much of a percentage change for the larger amounts in Admiral, and will lure more people in.
People tend to stay where they start, so this could generate quite a bit more business , or less of a loss of new business, for Vanguard, which should help us all.

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

Post by Whakamole » Mon Nov 19, 2018 2:03 pm

It sounds like Vanguard may have determined that it is just as cheap, perhaps cheaper, to run one share of fund for consumers. Different ticker symbols, having the UI/phone support/back office operations to handle conversion of Investor shares to Admiral/ETF shares, etc.

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

Post by xenochrony » Mon Nov 19, 2018 2:12 pm

BogleFanGal wrote:
Mon Nov 19, 2018 10:58 am
Sure wish this applied to solo 401ks - hate being overcharged investor ER rates on total bond when I've met the admiral threshold a long time ago. The rate isn't competitive with Fidelity or other broad bond index funds. I really need to transfer to another company- but many have closing fees or don't allow traditional IRA rollovers into the fund. So I keep overpaying in hopes Vanguard's rate will get a bit better. :annoyed
I opened a solo 401k at VG 2 weeks ago and was surprised to see the VG Investor Class MFs I selected for my plan "CLOSED TO NEW INVESTORS." I called VG small biz customer service and they informed me that this change at VG (move from INV to ADM class shares) will apply to solo 401ks as well. Communications about this share class access for solo 401Ks will be forthcoming on their website and via email shortly.

At least that was what I was told today.

xenochrony

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

Post by lostdog » Mon Nov 19, 2018 2:20 pm

lukestuckenhymer wrote:
Mon Nov 19, 2018 12:54 pm
Three cheers for Fidelity! :)
Agree. Three cheers for competition!
VTWAX and chill.

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

Post by hotpancakes » Mon Nov 19, 2018 2:20 pm

Sounds great! I'm curious about two things:

1) Will Prime MM get the same Admiral share treatment w/ low minimums?
2) Will Admiral funds be available for purchase outside of Vanguard?

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

Post by jhfenton » Mon Nov 19, 2018 2:36 pm

hotpancakes wrote:
Mon Nov 19, 2018 2:20 pm
Sounds great! I'm curious about two things:

1) Will Prime MM get the same Admiral share treatment w/ low minimums?
Almost certainly not. Vanguard still has an entire line-up of active funds with minimums at $50,000 and sector funds with minimums at $100,000. Today's announcement doesn't change anything for those funds either.

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

Post by Mel Lindauer » Mon Nov 19, 2018 2:47 pm

Outafter20 wrote:
Mon Nov 19, 2018 9:47 am
The million dollar question - will the LifeStrategy and Target Retirement funds use the Admiral shares now?
I've been pushing for that for years. Let's hope they get around to doing it.
Best Regards - Mel | | Semper Fi

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

Post by retiringwhen » Mon Nov 19, 2018 3:00 pm

xenochrony wrote:
Mon Nov 19, 2018 2:12 pm
I opened a solo 401k at VG 2 weeks ago and was surprised to see the VG Investor Class MFs I selected for my plan "CLOSED TO NEW INVESTORS." I called VG small biz customer service and they informed me that this change at VG (move from INV to ADM class shares) will apply to solo 401ks as well. Communications about this share class access for solo 401Ks will be forthcoming on their website and via email shortly.

At least that was what I was told today.

xenochrony
That is good news, I may be opening a Solo-401(K) next year and assumed I'd end up at Fidelity for their lower fee model for those accounts. Seems like Vanguard realized they had a competitive mis-match. Wonder what retirement plans will still hold Investor shares then?

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

Post by drzzzzz » Mon Nov 19, 2018 3:04 pm

I wonder if it's only me or whether lots of other clients will also find it irritating that Vanguard is making a big splash about lowering the admiral fee level, then when you click on the link that tells you the funds are eligible, you get a notice that you have no funds that meet the criteria and it doesn't automatically convert - why can't Vanguard's IT people get this stuff to work before they roll it out - don't they test it - this is just incompetence.

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

Post by jhfenton » Mon Nov 19, 2018 3:18 pm

drzzzzz wrote:
Mon Nov 19, 2018 3:04 pm
I wonder if it's only me or whether lots of other clients will also find it irritating that Vanguard is making a big splash about lowering the admiral fee level, then when you click on the link that tells you the funds are eligible, you get a notice that you have no funds that meet the criteria and it doesn't automatically convert - why can't Vanguard's IT people get this stuff to work before they roll it out - don't they test it - this is just incompetence.
Most people won't even be paying attention, and by the time they notice tomorrow or next week the upgrade button will work.

It's probably just a matter of all the relevant databases updating. If I had to guess, I'd say that it will work tomorrow. (You can make purchases at the $3,000 today. I didn't actually place an order, but it appeared that it would let me exchange $3,000 into an Admiral shares fund that I don't own.)

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Re: Total World and All-World ex-US Small Cap - Admiral Shares Forthcoming

Post by jhfenton » Mon Nov 19, 2018 3:21 pm

alpaca1 wrote:
Mon Nov 19, 2018 12:18 pm
The representative put me on hold for about one or two minutes and told me that in "early 2019 it looks like well be getting admiral shares for VTWSX, so keep an eye on it"
Can you edit the subject line so that it refers to "Total World and All-World ex-US Small Cap - Admiral Shares Forthcoming"?

I think it will get more attention if both fund names are in the subject rather than just one ticker.

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

Post by StormShadow » Mon Nov 19, 2018 3:22 pm

rkhusky wrote:
Mon Nov 19, 2018 10:08 am
Hope they don't raise the ER on Admiral to compensate for higher costs.
Nah, if anything they'd follow Fidelity and create zero ER index funds for the larger accounts.

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

Post by Jags4186 » Mon Nov 19, 2018 3:36 pm

FWIW I have found the convert Investors shares to Admiral share screen however it says I have no funds currently eligible. I own about $9000 of VTSMX in a taxable account.

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

Post by jhfenton » Mon Nov 19, 2018 3:41 pm

StormShadow wrote:
Mon Nov 19, 2018 3:22 pm
rkhusky wrote:
Mon Nov 19, 2018 10:08 am
Hope they don't raise the ER on Admiral to compensate for higher costs.
Nah, if anything they'd follow Fidelity and create zero ER index funds for the larger accounts.
There is zero chance Vanguard will launch a fund with a headline zero ER. Vanguard doesn't have loss leaders. Each fund has to carry its own weight and its share of the overall overhead.
Jags4186 wrote:
Mon Nov 19, 2018 3:36 pm
FWIW I have found the convert Investors shares to Admiral share screen however it says I have no funds currently eligible. I own about $9000 of VTSMX in a taxable account.
The convert button's not working for folks yet. If I had to guess, I'd say a separate database hasn't updated yet. I'd give it a try tomorrow.

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

Post by F150HD » Mon Nov 19, 2018 4:05 pm

Mountain Doc wrote:
Mon Nov 19, 2018 9:36 am
I can only assume these Admiral funds will be available even when buying Vanguard funds through other brokerages.
That was my question. If I were to try to buy a VG fund at Fidelity (as I was looking to do in tax-deferred), which share class should I be trying to purchase? as this (VISVX) is 'closed' to new investors....so I wonder if I could purchase 'admiral' shares instead at Fidelity? (cannot buy ETFs in my tax deferred Fidelity account, its not allowed via my employer)

https://investor.vanguard.com/mutual-fu ... file/VISVX

(At work so need to read thru the rest of this thread when I have a moment. maybe its been answered already.)

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Re: [Vanguard Total World and All-World ex-US Small Cap - Admiral Shares Forthcoming]

Post by LadyGeek » Mon Nov 19, 2018 4:09 pm

^^^ I got it.

(Thanks to the member who reported the thread. One of the reasons is "Naked Link or Misleading Title".)
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Re: Vanguard lowering Admiral level to $3,000?

Post by CppCoder » Mon Nov 19, 2018 4:16 pm

jhfenton wrote:
Mon Nov 19, 2018 3:18 pm
drzzzzz wrote:
Mon Nov 19, 2018 3:04 pm
I wonder if it's only me or whether lots of other clients will also find it irritating that Vanguard is making a big splash about lowering the admiral fee level, then when you click on the link that tells you the funds are eligible, you get a notice that you have no funds that meet the criteria and it doesn't automatically convert - why can't Vanguard's IT people get this stuff to work before they roll it out - don't they test it - this is just incompetence.
Most people won't even be paying attention, and by the time they notice tomorrow or next week the upgrade button will work.

It's probably just a matter of all the relevant databases updating. If I had to guess, I'd say that it will work tomorrow. (You can make purchases at the $3,000 today. I didn't actually place an order, but it appeared that it would let me exchange $3,000 into an Admiral shares fund that I don't own.)
As an investor, I'm excited to see the news. However, as someone constantly preaching about software quality, I'm rather offended. That they'll get it to work in a few days, and that many may not even notice, is not the point. It isn't like they decided all of this yesterday. Get your software working and tested before the press release! If their public facing interfaces don't work properly, what confidence should one have in their backend systems? My anecdotal experience is that software quality tends not to be something that varies product to product within a company. It tends to be systematic based on culture (although it could vary by product lines if teams are sufficiently isolated to have different developer subcultures).

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

Post by bluerafters » Mon Nov 19, 2018 4:17 pm

Whakamole wrote:
Mon Nov 19, 2018 1:17 pm
jhfenton wrote:
Mon Nov 19, 2018 12:45 pm
jhfenton wrote:
Mon Nov 19, 2018 12:42 pm
integrity wrote:
Mon Nov 19, 2018 12:29 pm
https://www.wsj.com/articles/vanguard-r ... 1542636000

For those not behind the paywall.
Starting Monday, the firm is lowering the minimums for admiral shares—a share class that costs less than regular investor classes—to $3,000 from $10,000 for 38 index mutual funds. The funds make up the majority of Vanguard’s index funds that are available to individual investors and include some of the industry’s largest stock and bond index funds.
The other quote of interest to me:
The firm is also launching new admiral shares on five index funds with those new minimums.
Does anyone know what these are? Someone mentioned Total World in a separate thread. Is my VSS/VFSVX (All-World ex-US Small Cap) dream coming true?
And the answer is YES! Per an SEC filing today.

https://www.sec.gov/Archives/edgar/data ... -index.htm
Looks to be 16bp for Admiral shares, vs 13bp for VSS. A difference so small, go with your preferred vehicle, and Admiral shares ER will go down if people switch (as I probably will.)
I was just about to switch everything into VTWSX. (And just posted a thread about the lack of a Admiral Share option.) What is/will be the symbol for the new fund? Looks like they already moved the minimum investment to $3,000.

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Re: [Vanguard Total World and All-World ex-US Small Cap - Admiral Shares Forthcoming]

Post by alpaca1 » Mon Nov 19, 2018 4:17 pm

LadyGeek wrote:
Mon Nov 19, 2018 4:09 pm
^^^ I got it.

(Thanks to the member who reported the thread. One of the reasons is "Naked Link or Misleading Title".)
Sorry, been busy at the office. Thanks!

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

Post by jhfenton » Mon Nov 19, 2018 4:26 pm

bluerafters wrote:
Mon Nov 19, 2018 4:17 pm
I was just about to switch everything into VTWSX. (And just posted a thread about the lack of a Admiral Share option.) What is/will be the symbol for the new fund? Looks like they already moved the minimum investment to $3,000.
VTWSX (Total World Investor Shares) was already at a $3,000 minimum because they're Investor shares.

There was no ticker listed for the Admiral shares in the SEC filing for either Total World or ex-US Small Cap. I don't know when we'll find out.

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

Post by sticklyman » Mon Nov 19, 2018 4:43 pm

If you are looking to upgrade to admiral shares and the system isn't working you can try doing an exchange from investor to admiral shares. It is not a taxable event and should work to get you into admiral today.

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

Post by zaboomafoozarg » Mon Nov 19, 2018 5:01 pm

I just wish they would've lowered VWIUX (int. term tax-exempt Admiral) from $50k.

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

Post by jeffyscott » Mon Nov 19, 2018 5:03 pm

Whakamole wrote:
Mon Nov 19, 2018 1:17 pm
jhfenton wrote:
Mon Nov 19, 2018 12:45 pm
jhfenton wrote:
Mon Nov 19, 2018 12:42 pm
The other quote of interest to me:
The firm is also launching new admiral shares on five index funds with those new minimums.
Does anyone know what these are? Someone mentioned Total World in a separate thread. Is my VSS/VFSVX (All-World ex-US Small Cap) dream coming true?
And the answer is YES! Per an SEC filing today.

https://www.sec.gov/Archives/edgar/data ... -index.htm
Looks to be 16bp for Admiral shares, vs 13bp for VSS. A difference so small, go with your preferred vehicle, and Admiral shares ER will go down if people switch (as I probably will.)
Since there were no admiral shares to merge, isn't this really just lowering the VFSVX expense ratio from 0.25% to 0.16%, why would that not simply happen or have happened without adding the Admiral designation?

VFSVX is not included in any fund of funds, AFAIK. Could there be enough in non-admiral retirement plans to account for a 36% reduction?
Time is your friend; impulse is your enemy. - John C. Bogle

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Re: VTWSX - Admiral Shares Incoming

Post by jeffyscott » Mon Nov 19, 2018 5:13 pm

Billavoider wrote:
Mon Nov 19, 2018 12:55 pm
Effective November 19, 2018, (i) Admiral Shares have an investment minimum of $3,000, and (ii) Investor Shares are generally closed to new investors. Investor Shares will remain open to existing investors and certain new institutional investors. You may convert your Investor Shares to Admiral Shares at any time by contacting Vanguard.
Unless "certain new institutional investors" somehow would include investors buying through other brokerages, it would appear that Fidelity, Schwab, etc. will now have to offer admiral shares or nothing.
Time is your friend; impulse is your enemy. - John C. Bogle

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

Post by passiveTiger » Mon Nov 19, 2018 5:29 pm

Whakamole wrote:
Mon Nov 19, 2018 2:03 pm
It sounds like Vanguard may have determined that it is just as cheap, perhaps cheaper, to run one share of fund for consumers. Different ticker symbols, having the UI/phone support/back office operations to handle conversion of Investor shares to Admiral/ETF shares, etc.
I think it may be more about the impact (or perhaps only the potential impact if none has been realized) of Fidelity dropping distinctions between index fund share classes, lowering index fund expense ratios to what was previously their lowest institutional class rates, and dropping minimums for index funds.

All of that is in addition to the four heavily marketed zero ER funds.

The tail is now wagging the dog regarding index mutual funds.

This is a good step for Vanguard, but a beginning investor can allocate across choices of total U.S. stock market, U.S. large/mid/small cap, U.S. large value/growth, total international, MSCI developed, MSCI emerging, U.S. REITS, long/intermediate/short Treasuries, and TIPS at fidelity with $14 ($1 in each), if they really wanted to do that.

Vanguard's next steps to equal the value in Fidelity's index offerings is dropping expense ratios to Vanguard's "Institutional Plus" ERs and drop minimums altogether.

Eliminating the false elitism between "Investor" and "Admiral" shares is a good first step. Now, they just need to eliminate the false elitism between "Admiral," "Institutional," and "Institutional Plus" shares.

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

Post by Elysium » Mon Nov 19, 2018 5:42 pm

Spirit Rider wrote:
Mon Nov 19, 2018 11:54 am
So does this mean that Vanguard Individual 401k plans will get access to Admiral Shares and lower expense ratios?
That appears to be the case, and such a great news. I logged into my account to check my Solo 401(k) plan and the funds I have now says closed to new investors which is strange considering they are index funds, and then I saw several index funds are showing closed to new investors which means they are in the process of converting them to admiral share class. These existing investor share class will then go away.

I tried to do an exchange from investor share class to admiral share class by going through the exchange process and it allowed me to go through farther than previously allowed, but I did not submit the order because I am going to wait and let them complete the process.

Good thing I did not go through with moving my solo 401(k) to Fidelity and waited on Vanguard to do something about this.

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

Post by jhfenton » Mon Nov 19, 2018 5:43 pm

jeffyscott wrote:
Mon Nov 19, 2018 5:03 pm
Whakamole wrote:
Mon Nov 19, 2018 1:17 pm
jhfenton wrote:
Mon Nov 19, 2018 12:45 pm

And the answer is YES! Per an SEC filing today.

https://www.sec.gov/Archives/edgar/data ... -index.htm
Looks to be 16bp for Admiral shares, vs 13bp for VSS. A difference so small, go with your preferred vehicle, and Admiral shares ER will go down if people switch (as I probably will.)
Since there were no admiral shares to merge, isn't this really just lowering the VFSVX expense ratio from 0.25% to 0.16%, why would that not simply happen or have happened without adding the Admiral designation?

VFSVX is not included in any fund of funds, AFAIK. Could there be enough in non-admiral retirement plans to account for a 36% reduction?
Vanguard could have done it that way for Total World and ex-US Small Cap. It would seem to make sense to do it that way.

But that would not have required a new and separate prospectus. For some reason, they did not go that route. They could still merge the share classes at some future date, but at the moment that doesn't seem to be what they are doing.

Maybe they have some other use for Investor shares that we're not thinking about?

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

Post by Spirit Rider » Mon Nov 19, 2018 6:18 pm

Elysium wrote:
Mon Nov 19, 2018 5:42 pm
I tried to do an exchange from investor share class to admiral share class by going through the exchange process and it allowed me to go through farther than previously allowed, but I did not submit the order because I am going to wait and let them complete the process.
You might not want to wait. It was announced that they won't do automatic conversions until 1st quarter 2019.

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

Post by Helo80 » Mon Nov 19, 2018 6:43 pm

Funny timing as just last night I was googling and reading an article about how Vanguard introduced the concept of low-cost index funds, but has recently been getting beaten in the ER war. Basically, my old Fidelity TSM fund closed and move to one of Fidelity's newer, 1.5 bp TSM indexes and so I started reading up on the matter.

I am surprised that they didn't lower their bp fee as well. 4 basis points is not much in the grand scheme of things, but Fidelity and Schwab can make demonstrated and mathematically proven demonstrations they are cheaper in the expense dept.

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

Post by jhfenton » Mon Nov 19, 2018 6:52 pm

Helo80 wrote:
Mon Nov 19, 2018 6:43 pm
I am surprised that they didn't lower their bp fee as well. 4 basis points is not much in the grand scheme of things, but Fidelity and Schwab can make demonstrated and mathematically proven demonstrations they are cheaper in the expense dept.
Because of their ownership structure, Vanguard can't simply lower their fees on specific funds. They report actual fund costs in arrears as the expense ratio for each fund. Every fund has to pay for itself and for a share of Vanguard overhead. Vanguard has lowered expense ratios over time by lowering expenses. Vanguard cannot simply chop the expense ratio on Vanguard Total Stock to 0 bp and recoup the money in one of its active funds.

If you want dirt-cheap core funds, Vanguard is currently not the cheapest. If you want the widest variety of dirt-cheap funds, Vanguard has the broadest selection by far.

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

Post by Barry Barnitz » Mon Nov 19, 2018 7:59 pm

Hi;

For those interested in Vanguard fund-of-funds and investor shares, here is an analysis as of mid-year, courtesy of our affiliate blog, Financial Page: Vanguard fund-of-funds and investor shares.

regards,
Additional administrative tasks: Financial Page affiliate blog; finiki the Canadian wiki; The Bogle Center for Financial Literacy site; Wiki Bogleheads® España.

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

Post by lassevirensghost » Mon Nov 19, 2018 8:21 pm

I am a bit annoyed. I converted VTWSX to VT in early October after verifying with Vanguard call support that there would be no Admiral Shares version of the fund in the foreseeable future. Maybe they honestly didn't know at that point. Maybe the particular person was too low on the totem pole to know. But it'll be a pain to go back into the mutual fund now. Eh, at this point I suppose I will just call it good and stay in the ETFs (I switched to BND at the same time).
“Groucho, how do you invest your money?” | “All in bonds.” | “But Groucho, they don’t pay much return.” | “They do when you have a lot of em!”

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

Post by Daitokuji » Mon Nov 19, 2018 8:24 pm

Has anyone been able to convert investor shares to admiral shares? I keep getting an error when I do so.

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

Post by Northern Flicker » Mon Nov 19, 2018 8:31 pm

Because of their ownership structure, Vanguard can't simply lower their fees on specific funds. They report actual fund costs in arrears as the expense ratio for each fund
Actually that is true for all mutual funds. Published ER is just a projection of what the fund company thinks expenses will be (well, those expenses included in ER anyway) and Vanguard projects conservatively using the previous period expenses because they cannot subsidize a projection that turned out to be low given the ownership structure.
Index fund investor since 1987.

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

Post by retiringwhen » Mon Nov 19, 2018 8:39 pm

jalbert wrote:
Mon Nov 19, 2018 8:31 pm
Because of their ownership structure, Vanguard can't simply lower their fees on specific funds. They report actual fund costs in arrears as the expense ratio for each fund
Actually that is true for all mutual funds. Published ER is just a projection of what the fund company thinks expenses will be (well, those expenses included in ER anyway) and Vanguard projects conservatively using the previous period expenses because they cannot subsidize a projection that turned out to be low given the ownership structure.
What is unique is the Service Agreement between the Mutual Fund and The Vanguard Group, it requires a at-cost cost sharing model for both the Fund Operations and the The Vanguard Group. They can't reimburse some expenses like many other fund companies do (Just read any Fidelity prospectus and look at costs reimbursed by FMRC)

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

Post by Nthomas » Mon Nov 19, 2018 8:48 pm

xenochrony wrote:
Mon Nov 19, 2018 2:12 pm
BogleFanGal wrote:
Mon Nov 19, 2018 10:58 am
Sure wish this applied to solo 401ks - hate being overcharged investor ER rates on total bond when I've met the admiral threshold a long time ago. The rate isn't competitive with Fidelity or other broad bond index funds. I really need to transfer to another company- but many have closing fees or don't allow traditional IRA rollovers into the fund. So I keep overpaying in hopes Vanguard's rate will get a bit better. :annoyed
I opened a solo 401k at VG 2 weeks ago and was surprised to see the VG Investor Class MFs I selected for my plan "CLOSED TO NEW INVESTORS." I called VG small biz customer service and they informed me that this change at VG (move from INV to ADM class shares) will apply to solo 401ks as well. Communications about this share class access for solo 401Ks will be forthcoming on their website and via email shortly.

At least that was what I was told today.

xenochrony
This is awesome news!

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

Post by TIAX » Mon Nov 19, 2018 9:07 pm

How will this affect individual 401(k)s, which currently only have investor share class funds?

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

Post by MotoTrojan » Mon Nov 19, 2018 9:17 pm

Good excuse to move my Roth holdings to MF and perhaps some taxable too if I can TLH into the MF.

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Re: VTWSX - Admiral Shares Incoming

Post by fennewaldaj » Mon Nov 19, 2018 9:34 pm

jeffyscott wrote:
Mon Nov 19, 2018 5:13 pm
Billavoider wrote:
Mon Nov 19, 2018 12:55 pm
Effective November 19, 2018, (i) Admiral Shares have an investment minimum of $3,000, and (ii) Investor Shares are generally closed to new investors. Investor Shares will remain open to existing investors and certain new institutional investors. You may convert your Investor Shares to Admiral Shares at any time by contacting Vanguard.
Unless "certain new institutional investors" somehow would include investors buying through other brokerages, it would appear that Fidelity, Schwab, etc. will now have to offer admiral shares or nothing.
Yeah I am curious what will happen with the investor shares of FTSE all world ex US small cap and Mid cap value in my fidelity brokerage link. Will they be converted? If not will I still be able to add to them. I guess I will have to wait and see.

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

Post by fennewaldaj » Mon Nov 19, 2018 9:37 pm

F150HD wrote:
Mon Nov 19, 2018 4:05 pm
Mountain Doc wrote:
Mon Nov 19, 2018 9:36 am
I can only assume these Admiral funds will be available even when buying Vanguard funds through other brokerages.
That was my question. If I were to try to buy a VG fund at Fidelity (as I was looking to do in tax-deferred), which share class should I be trying to purchase? as this (VISVX) is 'closed' to new investors....so I wonder if I could purchase 'admiral' shares instead at Fidelity? (cannot buy ETFs in my tax deferred Fidelity account, its not allowed via my employer)

https://investor.vanguard.com/mutual-fu ... file/VISVX

(At work so need to read thru the rest of this thread when I have a moment. maybe its been answered already.)
Yeah I am very curious what will happen with my Vangaurd FTSE all world ex US small cap and Vanguard mid cap value I hold at fidelity. Will they be converted. If not will I be able to add to them.

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