Vanguard Lowers 21 ETF Expense Ratios

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GoPackGo
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Vanguard Lowers 21 ETF Expense Ratios

Post by GoPackGo » Fri Apr 26, 2019 10:17 pm

Lower expense ratios on 21 Vanguard ETFs means more savings for you

Details in the Vanguard blog post linked to above.

(If there is some other thread on this, I honestly looked but couldn't find one.)

PowderDay9
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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by PowderDay9 » Fri Apr 26, 2019 10:32 pm

Always good to see! Anyone know if they're planning to lower the equivalent mutual funds as well? I see VTSAX still at .04 for example.

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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by pdavi21 » Fri Apr 26, 2019 11:43 pm

PowderDay9 wrote:
Fri Apr 26, 2019 10:32 pm
Always good to see! Anyone know if they're planning to lower the equivalent mutual funds as well? I see VTSAX still at .04 for example.
My guess is never. They lowered the minimums.
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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by pdavi21 » Fri Apr 26, 2019 11:46 pm

I guess they're using the average for 2018. Many were lower in the 2H2018.
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FOGU
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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by FOGU » Sat Apr 27, 2019 12:21 am

This appears to be a nudge (shove?) for people to go into ETFs instead of mutual funds.

How else to explain offering ETF/MF equivalents at different prices? (VTI and VXUS the most glaring examples.)

I have been in mutual funds for decades now. I would like those 1 or 2 basis point savings too. Why should I have to switch to ETFs to get the preferential price?

Sad!

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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by drk » Sat Apr 27, 2019 12:32 am

FOGU wrote:
Sat Apr 27, 2019 12:21 am
How else to explain offering ETF/MF equivalents at different prices? (VTI and VXUS the most glaring examples.)
It's an easy explanation: the ETFs cost less to operate. You can go read the annual reports to see this.

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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by wootwoot » Sat Apr 27, 2019 12:34 am

FOGU wrote:
Sat Apr 27, 2019 12:21 am
This appears to be a nudge (shove?) for people to go into ETFs instead of mutual funds.

How else to explain offering ETF/MF equivalents at different prices? (VTI and VXUS the most glaring examples.)
Do a good search for in-kind transfers and you'll find that ETFs are more tax efficient. Vanguard is passing the savings on to customers.

FOGU wrote:
Sat Apr 27, 2019 12:21 am


I have been in mutual funds for decades now. I would like those 1 or 2 basis point savings too. Why should I have to switch to ETFs to get the preferential price?
Because ETFs are more tax efficient. Of course if you prefer mutual funds then enjoy paying those higher basis points.

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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by FOGU » Sat Apr 27, 2019 12:44 am

drk wrote:
Sat Apr 27, 2019 12:32 am
FOGU wrote:
Sat Apr 27, 2019 12:21 am
How else to explain offering ETF/MF equivalents at different prices? (VTI and VXUS the most glaring examples.)
It's an easy explanation: the ETFs cost less to operate. You can go read the annual reports to see this.
drk wrote:
Sat Apr 27, 2019 12:32 am
FOGU wrote:
Sat Apr 27, 2019 12:21 am
How else to explain offering ETF/MF equivalents at different prices? (VTI and VXUS the most glaring examples.)
It's an easy explanation: the ETFs cost less to operate. You can go read the annual reports to see this.
Thus the shove.

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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by AlohaJoe » Sat Apr 27, 2019 12:55 am

FOGU wrote:
Sat Apr 27, 2019 12:44 am
drk wrote:
Sat Apr 27, 2019 12:32 am
FOGU wrote:
Sat Apr 27, 2019 12:21 am
How else to explain offering ETF/MF equivalents at different prices? (VTI and VXUS the most glaring examples.)
It's an easy explanation: the ETFs cost less to operate. You can go read the annual reports to see this.
drk wrote:
Sat Apr 27, 2019 12:32 am
FOGU wrote:
Sat Apr 27, 2019 12:21 am
How else to explain offering ETF/MF equivalents at different prices? (VTI and VXUS the most glaring examples.)
It's an easy explanation: the ETFs cost less to operate. You can go read the annual reports to see this.
Thus the shove.
How is it a shove? Vanguard charges whatever it costs. They don't "set" an ER and they didn't "lower ERs", despite what the linked article claims. They report -- after the fact -- how much it cost to run a fund.

https://investor.vanguard.com/expense-ratio/
How expense ratios are calculated at Vanguard

As each fund passes its fiscal year-end, the annual expense ratio is calculated by dividing the fund's operational expenses by its average net assets. If the fund's assets are increasing faster than its costs, you'll enjoy lower expenses as a fund shareholder.
To talk about "offering equivalents at different prices" doesn't make much sense.

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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by DonIce » Sat Apr 27, 2019 1:05 am

Sweet. I already have some of these funds. Always nice to see expenses continue to go down.

johnanglemen
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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by johnanglemen » Sat Apr 27, 2019 1:07 am

AlohaJoe wrote:
Sat Apr 27, 2019 12:55 am
How is it a shove? Vanguard charges whatever it costs. They don't "set" an ER and they didn't "lower ERs", despite what the linked article claims. They report -- after the fact -- how much it cost to run a fund.
This is not correct, as noted here: viewtopic.php?t=252338&start=50#p4415367

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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by AlohaJoe » Sat Apr 27, 2019 2:08 am

johnanglemen wrote:
Sat Apr 27, 2019 1:07 am
AlohaJoe wrote:
Sat Apr 27, 2019 12:55 am
How is it a shove? Vanguard charges whatever it costs. They don't "set" an ER and they didn't "lower ERs", despite what the linked article claims. They report -- after the fact -- how much it cost to run a fund.
This is not correct, as noted here: viewtopic.php?t=252338&start=50#p4415367
In my reply, I explain how Vanguard allocates marketing costs, according to an SEC-approved formula from 1981: viewtopic.php?f=10&t=252338&p=4516148#p4516148

There is no shove.

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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by k3vb0t » Sat Apr 27, 2019 6:49 am

Is there any reason not to switch my 3 fund portfolio over to a 3 ETF portfolio?

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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by Jack FFR1846 » Sat Apr 27, 2019 6:58 am

k3vb0t wrote:
Sat Apr 27, 2019 6:49 am
Is there any reason not to switch my 3 fund portfolio over to a 3 ETF portfolio?
One is a can of beer, the other is a bottle of beer. The beer is the same, just your choice if you're willing to pay more for the container.

I'm quite happy to see this. My Vanguard ETFs were the highest cost (VEA) by far in my portfolio. It's still the highest, but getting closer to the rest of my funds and ETFs. Heck....VTI not matches SCHB, which only a couple years ago was cheaper than anything else in the market.
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Vanguard Lowers Expense Ratios...

Post by Explorer » Sat Apr 27, 2019 7:06 am

[Thread merged into here, see below. --admin LadyGeek]

...on ETFs but not the equivalent mutual funds. Does anyone know why?

It is not a material impact but why?

Example: VT 0.09% ER; VTWAX 0.10% ER -- same fund with different share classes.

Thanks for your insights.

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Re: Vanguard Lowers Expense Ratios...

Post by Jack FFR1846 » Sat Apr 27, 2019 7:07 am

Bogle: Smart Beta is stupid

Cody
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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by Cody » Sat Apr 27, 2019 7:08 am

I like that question:

Is there any reason to switch or not switch from Vanugard mutual funds to ET for the the Three Portfolio people?

Cody

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Re: Vanguard Lowers Expense Ratios...

Post by Explorer » Sat Apr 27, 2019 7:10 am

Jack FFR1846 wrote:
Sat Apr 27, 2019 7:07 am
viewtopic.php?f=10&t=279775&newpost=451 ... ead#unread

already posted
Thanks.. I will jump on that thread for further follow up.

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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by k3vb0t » Sat Apr 27, 2019 7:14 am

Jack FFR1846 wrote:
Sat Apr 27, 2019 6:58 am
k3vb0t wrote:
Sat Apr 27, 2019 6:49 am
Is there any reason not to switch my 3 fund portfolio over to a 3 ETF portfolio?
One is a can of beer, the other is a bottle of beer. The beer is the same, just your choice if you're willing to pay more for the container.

I'm quite happy to see this. My Vanguard ETFs were the highest cost (VEA) by far in my portfolio. It's still the highest, but getting closer to the rest of my funds and ETFs. Heck....VTI not matches SCHB, which only a couple years ago was cheaper than anything else in the market.
I suppose I should have been more clear. I’ve got a 3 fund portfolio spread out across 2 Roth and 2 Traditional IRAs. Is there any risk to exchanging all of my mutual funds to ETFs? Perhaps having to wait for the transaction to settle before being able to purchase ETFs during normal trading hours and the market goes up dramatically in those few days?

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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by livesoft » Sat Apr 27, 2019 7:16 am

For Vanguard ETFs vs mutual funds, I think the main reason to choose one over the other is not expense ratio, not tax-efficiency, not Vanguard, but instead it has to do with investor personality: Can you buy ETF shares without feeling regret that you possibly could have gotten a better price a few minutes later? With a mutual fund, there is no better price a few minutes later because the price is set once a day for mutual funds. This anxiety and minimization of regret thing is one of the most often discussed aspects of ETF ownership discussed at bogleheads.org. And it goes for selling, too. Are you afraid of getting a lower price when you sell than you could have a few minutes later?
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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by bgf » Sat Apr 27, 2019 7:25 am

livesoft wrote:
Sat Apr 27, 2019 7:16 am
For Vanguard ETFs vs mutual funds, I think the main reason to choose one over the other is not expense ratio, not tax-efficiency, not Vanguard, but instead it has to do with investor personality: Can you buy ETF shares without feeling regret that you possibly could have gotten a better price a few minutes later? With a mutual fund, there is no better price a few minutes later because the price is set once a day for mutual funds. This anxiety and minimization of regret thing is one of the most often discussed aspects of ETF ownership discussed at bogleheads.org. And it goes for selling, too. Are you afraid of getting a lower price when you sell than you could have a few minutes later?
this has never made sense to me, but im in the minority. just as i think its nonsense to count bear/bull markets based on closing prices, its nonsense to think you've somehow avoided buying higher or selling lower with mutual funds at the close. the closing price is no more or less special than any other transaction at any point during the trading day.

closing prices are a relic of the past, like speaking about buying at 100 3/8 or whatever.
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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by Explorer » Sat Apr 27, 2019 7:28 am

livesoft wrote:
Sat Apr 27, 2019 7:16 am
For Vanguard ETFs vs mutual funds, I think the main reason to choose one over the other is not expense ratio, not tax-efficiency, not Vanguard, but instead it has to do with investor personality: Can you buy ETF shares without feeling regret that you possibly could have gotten a better price a few minutes later? With a mutual fund, there is no better price a few minutes later because the price is set once a day for mutual funds. This anxiety and minimization of regret thing is one of the most often discussed aspects of ETF ownership discussed at bogleheads.org. And it goes for selling, too. Are you afraid of getting a lower price when you sell than you could have a few minutes later?
+1

Also, I personally like the fact that both buyers and sellers get the same price albiet at the end of the day. And, with so many brokerages allowing free trades, ETFs impacted the behavioral aspects for me (such as harvesting small gains). So now I am 100% into Mutual Funds. And that stabilized my investment behavior a great deal.

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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by jeffyscott » Sat Apr 27, 2019 7:38 am

wootwoot wrote:
Sat Apr 27, 2019 12:34 am
FOGU wrote:
Sat Apr 27, 2019 12:21 am
This appears to be a nudge (shove?) for people to go into ETFs instead of mutual funds.

How else to explain offering ETF/MF equivalents at different prices? (VTI and VXUS the most glaring examples.)
Do a good search for in-kind transfers and you'll find that ETFs are more tax efficient. Vanguard is passing the savings on to customers.

FOGU wrote:
Sat Apr 27, 2019 12:21 am


I have been in mutual funds for decades now. I would like those 1 or 2 basis point savings too. Why should I have to switch to ETFs to get the preferential price?
Because ETFs are more tax efficient. Of course if you prefer mutual funds then enjoy paying those higher basis points.
Vanguard ETFs are not more tax efficient than the Vanguard mutual fund equivalents.

Who is paying for the commission free trading of ETFs at Vanguard brokerage?
Time is your friend; impulse is your enemy. - John C. Bogle

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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by dwickenh » Sat Apr 27, 2019 7:46 am

livesoft wrote:
Sat Apr 27, 2019 7:16 am
For Vanguard ETFs vs mutual funds, I think the main reason to choose one over the other is not expense ratio, not tax-efficiency, not Vanguard, but instead it has to do with investor personality: Can you buy ETF shares without feeling regret that you possibly could have gotten a better price a few minutes later? With a mutual fund, there is no better price a few minutes later because the price is set once a day for mutual funds. This anxiety and minimization of regret thing is one of the most often discussed aspects of ETF ownership discussed at bogleheads.org. And it goes for selling, too. Are you afraid of getting a lower price when you sell than you could have a few minutes later?
I also wonder if would be easier to sell and buy etf's during the trading day, when really the best thing would have been to stay pat.
The MF pricing at close makes one consider the sale based on one price, and knowing the next day will bring a different close.

I think I would sell more often with etfs, so investor personality does come into the equation.

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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by MnD » Sat Apr 27, 2019 7:49 am

drk wrote:
Sat Apr 27, 2019 12:32 am
FOGU wrote:
Sat Apr 27, 2019 12:21 am
How else to explain offering ETF/MF equivalents at different prices? (VTI and VXUS the most glaring examples.)
It's an easy explanation: the ETFs cost less to operate. You can go read the annual reports to see this.
This. I'd speculate that for years the VG ETF class shares were subsidizing the mutual fund shares with VG's policy of keeping Admiral and ETF shares at cost parity. Now, due to competitive pressures in the ETF space, that can't be maintained. If you want traditional mutual fund shares you'll have to pay the full costs going forward.
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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by livesoft » Sat Apr 27, 2019 7:57 am

dwickenh wrote:
Sat Apr 27, 2019 7:46 am
The MF pricing at close makes one consider the sale based on one price, and knowing the next day will bring a different close.
And even better: The end of day price is unknown when one places their mutual fund order. That is, one can think, "I have no control over the price that I will get, therefore I cannot be blamed for selecting a stupid price for my order."
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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by Explorer » Sat Apr 27, 2019 8:00 am

MnD wrote:
Sat Apr 27, 2019 7:49 am
drk wrote:
Sat Apr 27, 2019 12:32 am
FOGU wrote:
Sat Apr 27, 2019 12:21 am
How else to explain offering ETF/MF equivalents at different prices? (VTI and VXUS the most glaring examples.)
It's an easy explanation: the ETFs cost less to operate. You can go read the annual reports to see this.
This. I'd speculate that for years the VG ETF class shares were subsidizing the mutual fund shares with VG's policy of keeping Admiral and ETF shares at cost parity. Now, due to competitive pressures in the ETF space, that can't be maintained. If you want traditional mutual fund shares you'll have to pay the full costs going forward.
The difference in ERs is negligible though...I will stick with MFs

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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by Vulcan » Sat Apr 27, 2019 8:17 am

livesoft wrote:
Sat Apr 27, 2019 7:16 am
For Vanguard ETFs vs mutual funds, I think the main reason to choose one over the other is not expense ratio, not tax-efficiency, not Vanguard, but instead it has to do with investor personality: Can you buy ETF shares without feeling regret that you possibly could have gotten a better price a few minutes later? With a mutual fund, there is no better price a few minutes later because the price is set once a day for mutual funds. This anxiety and minimization of regret thing is one of the most often discussed aspects of ETF ownership discussed at bogleheads.org. And it goes for selling, too. Are you afraid of getting a lower price when you sell than you could have a few minutes later?
My personal experience with ETFs was very similar to ogd's description

100% of my Vanguard's holdings are in VTWAX now, and I could care less if VT's ER is 0.01% lower.
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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by txaggie » Sat Apr 27, 2019 8:23 am

I am going to continue purchasing mutual funds. The ability to schedule recurring automated investments is important to me. I don’t want to put in ETF orders each week by hand to invest in the market. Automated investing helps me to stay the course.

I am not aware of a simple method to automate ETF investments to contribute a fixed amount each week.

Maybe someday I’ll start calling and converting my already purchased funds to ETFs with Vanguard. Though I think I would prefer having mutual funds when I stop accumulating and start drawing from my portfolio.

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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by dwickenh » Sat Apr 27, 2019 8:27 am

livesoft wrote:
Sat Apr 27, 2019 7:57 am
dwickenh wrote:
Sat Apr 27, 2019 7:46 am
The MF pricing at close makes one consider the sale based on one price, and knowing the next day will bring a different close.
And even better: The end of day price is unknown when one places their mutual fund order. That is, one can think, "I have no control over the price that I will get, therefore I cannot be blamed for selecting a stupid price for my order."
Bingo!!!
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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by UpperNwGuy » Sat Apr 27, 2019 8:28 am

Unless the gap between the two ERs widens, I'll stick with mutual funds.

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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by stan1 » Sat Apr 27, 2019 8:56 am

txaggie wrote:
Sat Apr 27, 2019 8:23 am
I am going to continue purchasing mutual funds. The ability to schedule recurring automated investments is important to me. I don’t want to put in ETF orders each week by hand to invest in the market. Automated investing helps me to stay the course.

I am not aware of a simple method to automate ETF investments to contribute a fixed amount each week.
You could use a different brokerage. M1 Finance has automated investments enabled in part because they let you purchase fractional shares. I expect more brokerages will support fractional shares with time but not sure if Vanguard will do so.

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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by jdilla1107 » Sat Apr 27, 2019 9:13 am

This makes perfect sense to me. ETFs are more efficient to the Vanguard fund model, so there should be a small incentive to use them. While ETFs are slightly less convenient to use an investor, Vanguard MF customers are getting the benefit of the people who use ETFs. So, MF customers should pay a bit more for the benefit they are receiving from others.

I probably see it this way as I use mostly ETFs. This most recent fee cut will save me $200 a year, which is nice. Maybe I won't have to rinse and reuse my ziplock bags anymore.

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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by LadyGeek » Sat Apr 27, 2019 9:15 am

I merged Explorer's thread into the on-going discussion.
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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by pobox2001 » Sat Apr 27, 2019 9:18 am

How does the bid/ask spread figure into this discussion about expenses? If I get a slightly lower price when I sell (due to the spread) doesn't that, in effect, increase my cost (or better said, decrease my gain)?

With mutual funds, the buyer and seller get the same "end of day" price. Curious how others consider the bid/ask spread when comparing costs of ETF's to mutual funds.

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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by yousha » Sat Apr 27, 2019 9:59 am

Vanguard should lower it rates at Flagship Select as well.

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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by Broken Man 1999 » Sat Apr 27, 2019 10:30 am

I don't doubt at all some investors might find regret in their purchases of ETFs, seeing the price go down after they have bought, or price going up after they sell. On the other hand, buying a MF at today's close and seeing the closing price of the MF being lower tomorrow might also cause regret, seems just as likely as having regret using an ETF. It isn't like the investor somehow becomes oblivious to their MF price going forward, also forgetting what they paid for their MF shares when they were acquired. :confused

Me, I'm in for a long term, so that type thing doesn't bother me at all. Pretty much the same things happen when you buy/sell a share of stock. You aren't going to always buy at the day's low, and you aren't always going to sell at the day's high. I use limit orders, so at least I know what I will pay or receive if my order executes.

These ER cuts aren't huge, but it is still nice to save a few bucks here and there.

Now I need to get off my lazy butt and convert all our bond mutual funds to ETFs.

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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by livesoft » Sat Apr 27, 2019 10:31 am

pobox2001 wrote:
Sat Apr 27, 2019 9:18 am
How does the bid/ask spread figure into this discussion about expenses? If I get a slightly lower price when I sell (due to the spread) doesn't that, in effect, increase my cost (or better said, decrease my gain)?

With mutual funds, the buyer and seller get the same "end of day" price. Curious how others consider the bid/ask spread when comparing costs of ETF's to mutual funds.
In my experience, the bid/ask spread is a red herring for the ETFs that one wants to own. I usually get the other guy to pay the 1 cent spread anyways.

Also if one places an order to execute at the market open, then there is no bid/ask spread at the opening cross just like there is no bid/ask spread for mutual funds at the market close. Furthermore, just like when you won't know the price of a share of a mutual fund at the market close, you won't know the price of an ETF at the market open. In both cases, one can estimate the price, but until the order(s) execute one won't know what the actual price was.
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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by livesoft » Sat Apr 27, 2019 10:33 am

Broken Man 1999 wrote:
Sat Apr 27, 2019 10:30 am
Now I need to get off my lazy butt and convert all our bond mutual funds to ETFs.
If you are writing about tax-free neutral conversion at Vanguard between share classes, then you need to know that Vanguard excludes bond funds from this mechanism (at least the bond funds that I have looked at).
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ETF vs Mutual Funds

Post by EyeDee » Sat Apr 27, 2019 10:33 am

.
k3vb0t wrote:
Sat Apr 27, 2019 6:49 am
Is there any reason not to switch my 3 fund portfolio over to a 3 ETF portfolio?
k3vb0t,

If you have a spouse or someone else who would inherit your portfolio that would have trouble dealing with the mechanics of buying and selling ETFs when you die and/or if you thought you might have trouble dealing with the mechanics when you get older.
Randy

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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by livesoft » Sat Apr 27, 2019 10:36 am

Broken Man 1999 wrote:
Sat Apr 27, 2019 10:30 am
I don't doubt at all some investors might find regret in their purchases of ETFs, seeing the price go down after they have bought, or price going up after they sell. On the other hand, buying a MF at today's close and seeing the closing price of the MF being lower tomorrow might also cause regret, seems just as likely as having regret using an ETF. It isn't like the investor somehow becomes oblivious to their MF price going forward, also forgetting what they paid for their MF shares when they were acquired. :confused
Ah, you haven't seen behavioral finance in action, have you? :)

It is not that the investor was oblivious (except for Mike Piper), it was that for ETFs they controlled a decision that the mutual fund investor does not control.
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Broken Man 1999
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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by Broken Man 1999 » Sat Apr 27, 2019 10:46 am

livesoft wrote:
Sat Apr 27, 2019 10:33 am
Broken Man 1999 wrote:
Sat Apr 27, 2019 10:30 am
Now I need to get off my lazy butt and convert all our bond mutual funds to ETFs.
If you are writing about tax-free neutral conversion at Vanguard between share classes, then you need to know that Vanguard excludes bond funds from this mechanism (at least the bond funds that I have looked at).
Yep, I do know. I called into Vanguard months ago when I started the conversion process for the equity MFs. I put the bond MFs on the back burner at the time.

Fortunately all our bond MFs are in TIRAs and Roths, so no worries tax-wise.

Thanks for bringing that info up, though. It might save someone else from making a mistake. Financial activities can certainly cost one dearly if done wrong, or without having all the facts correct.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven than I shall not go. " -Mark Twain

Broken Man 1999
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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by Broken Man 1999 » Sat Apr 27, 2019 11:15 am

livesoft wrote:
Sat Apr 27, 2019 10:36 am
Broken Man 1999 wrote:
Sat Apr 27, 2019 10:30 am
I don't doubt at all some investors might find regret in their purchases of ETFs, seeing the price go down after they have bought, or price going up after they sell. On the other hand, buying a MF at today's close and seeing the closing price of the MF being lower tomorrow might also cause regret, seems just as likely as having regret using an ETF. It isn't like the investor somehow becomes oblivious to their MF price going forward, also forgetting what they paid for their MF shares when they were acquired. :confused
Ah, you haven't seen behavioral finance in action, have you? :)

It is not that the investor was oblivious (except for Mike Piper), it was that for ETFs they controlled a decision that the mutual fund investor does not control.
Scapegoats are always welcome! Sadly, sometimes I am unable to find one when I really, really need one! :oops:

Broken Man 1999
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johnanglemen
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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by johnanglemen » Sat Apr 27, 2019 3:28 pm

AlohaJoe wrote:
Sat Apr 27, 2019 2:08 am
johnanglemen wrote:
Sat Apr 27, 2019 1:07 am
AlohaJoe wrote:
Sat Apr 27, 2019 12:55 am
How is it a shove? Vanguard charges whatever it costs. They don't "set" an ER and they didn't "lower ERs", despite what the linked article claims. They report -- after the fact -- how much it cost to run a fund.
This is not correct, as noted here: viewtopic.php?t=252338&start=50#p4415367
In my reply, I explain how Vanguard allocates marketing costs, according to an SEC-approved formula from 1981: viewtopic.php?f=10&t=252338&p=4516148#p4516148

There is no shove.
So you believe that the expenses of the Admiral class and the ETF class just happened to be exactly the same for all the funds for all those years?

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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by Broken Man 1999 » Sat Apr 27, 2019 4:31 pm

johnanglemen wrote:
Sat Apr 27, 2019 3:28 pm
AlohaJoe wrote:
Sat Apr 27, 2019 2:08 am
johnanglemen wrote:
Sat Apr 27, 2019 1:07 am
AlohaJoe wrote:
Sat Apr 27, 2019 12:55 am
How is it a shove? Vanguard charges whatever it costs. They don't "set" an ER and they didn't "lower ERs", despite what the linked article claims. They report -- after the fact -- how much it cost to run a fund.
This is not correct, as noted here: viewtopic.php?t=252338&start=50#p4415367
In my reply, I explain how Vanguard allocates marketing costs, according to an SEC-approved formula from 1981: viewtopic.php?f=10&t=252338&p=4516148#p4516148

There is no shove.
So you believe that the expenses of the Admiral class and the ETF class just happened to be exactly the same for all the funds for all those years?
Tailoring expenses is not impossible, or even rare. At MegaCorp we were flogged during the last fiscal quarter of the year: "Spend your budget" and "Stop Spending" were dueling directives, sometimes issued mere days apart. Part of my compensation was tied to company results, I liked being tied to the same bogies as the big guns, they seldom missed their goals. So I embraced their demands.

I would think Vanguard would be able to do the same thing on fund/ETF expenses, in some fashion or another. I could be wrong, though.

Broken Man 1999
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Gleevec
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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by Gleevec » Sat Apr 27, 2019 4:40 pm

Speaking of behavioral economics, the recent decisions to make mutual fund owners (esp Admiral share owners) second class citizens at Vanguard with higher ER relative to ETFs is the major reason (along with loss of Advantage account) I switched over to Fidelity. No minimums on their funds and with a zero expense ratio for some is a way better deal.

I don’t know what market Vanguard is trying to grow with their ETF strategy at the cost of old guard like me who used to be 100% Vanguard (advisors?) but they are moving themselves away from where they used to dominate and innovate, and that’s a tragedy

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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by Trader Joe » Sat Apr 27, 2019 5:46 pm

GoPackGo wrote:
Fri Apr 26, 2019 10:17 pm
Lower expense ratios on 21 Vanguard ETFs means more savings for you

Details in the Vanguard blog post linked to above.

(If there is some other thread on this, I honestly looked but couldn't find one.)
I am hoping to see a reduction in the corresponding Mutual Funds very soon.

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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by livesoft » Sat Apr 27, 2019 7:58 pm

Gleevec wrote:
Sat Apr 27, 2019 4:40 pm
... for some is a way better deal.

... and that’s a tragedy
What is the dollar amount of "a way better deal"?

What is the dollar amount of "a tragedy"?

Let's get serious.
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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by Kalo » Sat Apr 27, 2019 8:47 pm

Does anyone have experience converting Vanguard mutual funds to the corresponding ETF using the tax free conversion feature available through Vanguard brokerage?

Is the process done at the closing price so that there is no spread gain or loss?

Also, can one request it via the web site? Or do you have to call them to initiate?

Thanks,

Kalo
"When people say they have a high risk tolerance, what they really mean is that they are willing to make a lot of money." -- Ben Stein/Phil DeMuth - The Little Book of Bullet Proof Investing.

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Re: Vanguard Lowers 21 ETF Expense Ratios

Post by Gleevec » Sat Apr 27, 2019 10:26 pm

livesoft wrote:
Sat Apr 27, 2019 7:58 pm
Gleevec wrote:
Sat Apr 27, 2019 4:40 pm
... for some is a way better deal.

... and that’s a tragedy
What is the dollar amount of "a way better deal"?

What is the dollar amount of "a tragedy"?

Let's get serious.
Nice editing, this is a internet messageboard not cable news, you can show the whole quote in context and respond if you like :)

It is always curious to me that Fidelity and Schwab get more criticism for theoretical concerns (ie ownership) while improving their actual products (ER, minimums).

Meanwhile Vanguard which has a deteriorating product for those that rely on mutual funds and checking (but an improving one if you just want ETFs, which I can buy anywhere including on M1) is given a pass because the theory of the company is excellent, yet is decreasingly reflected in the execution of their actual products (let alone customer service, or ability to contact even Flagship reps)

In terms of actual dollar amounts, it is always curious to me that when Vanguard has lower ER it’s lauded, when someone creates a product with lower ER then its “that’s just a small amount of money”.

“Seriously” though, the direction Vanguard is heading, to become a ETF vendor with rock bottom prices, is very different than the company many of us started out with who looked to Vanguard as our financial home for recurring admiral mutual fund purchases, checking with Advantage, and access to Flagship rep for the issues for which there are almost no in person offices. I spent a good amount of time 5 years ago trying to convince my company to goto Vanguard for our retirement accounts but was told they are hard to interface with for the needs of the employees, I didn’t expect them to be so prescient.

This post just reminds me what Vanguard’s new goals are, to become an ETF wholesaler, it’s too bad for some of us
Last edited by Gleevec on Sat Apr 27, 2019 11:55 pm, edited 1 time in total.

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