Press Release 10/1/19--Vanguard Adds To Its Active Lineup With Launch Of International Core Stock Fund

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MFInvestor
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Press Release 10/1/19--Vanguard Adds To Its Active Lineup With Launch Of International Core Stock Fund

Post by MFInvestor » Fri Jul 19, 2019 9:48 am

[Title was "Vanguard Expands Active Roster With Proposed International Core Stock Fund"

The fund has been launched, see below. --admin LadyGeek]


Press Release by Vanguard 7/18/2019
I didn't see anything on the forum regarding this

https://pressroom.vanguard.com/news/Pre ... 71819.html
VALLEY FORGE, PA (July 18, 2019)—Vanguard today filed a preliminary registration with the U.S. Securities and Exchange Commission for Vanguard International Core Stock Fund. The new actively managed fund will be managed by Wellington Management Company LLP (Wellington Management) and is expected to be available to investors in the fourth quarter of 2019.

Vanguard, one of the largest providers of actively managed funds in the asset management industry, has been expanding its actively managed roster over the past two years, introducing a suite of factor ETFs, an ESG fund, a commodities fund, two global balanced funds, and two fixed income funds —Vanguard Global Credit Bond Fund and Vanguard Emerging Markets Bond Fund.

A low-cost, diversified entrant to the market

Vanguard International Core Stock Fund will offer broad equity exposure to both developed and emerging non-U.S. markets, blending growth and value styles and diversifying across a range of sectors. The fund will seek to provide long-term capital appreciation and hold approximately 60-100 stocks, with no individual positions representing greater than 5% of the portfolio. It is expected to have moderate overweight or underweight allocations to sectors and regions relative to the MSCI ACWI ex USA Index.

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Vanguard to add a new core international active equity fund

Post by lostdog » Fri Jul 19, 2019 10:49 am

[merged this topic and its replies into the existing thread - moderator prudent]

Vanguard Blog

"Vanguard to add a new core international active equity fund."

https://investornews.vanguard/vanguard- ... uity-fund/

Is there a domestic version of this? Is it the Vanguard PRIMECAP?
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Re: Vanguard to add a new core international active equity fund

Post by garlandwhizzer » Fri Jul 19, 2019 12:50 pm

Doesn't sound like it's an INTL Primecap Fund. Primecap focuses on LC and MC growth areas and has few restraints. This fund mixes growth and value and does so with restraints on country weights and sector weights so as to decrease risk and be widely diversified. Primecap is run by PRIMECAP MANAGEMENT and uses a multi-manager approach. This fund will be run by Wellington Management, an entirely different somewhat value focused group. Wellington has been for a long time a very competent management group as the outstanding performance of their balanced Wellington fund demonstrates. This fund will be a broadly based alternative to the INTL cap weight index fund aiming to produce better returns with little or no increased risk using active management.

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Re: Vanguard to add a new core international active equity fund

Post by columbia » Fri Jul 19, 2019 1:23 pm

A good option for those who don’t want to own 7000+ ex-US companies that they’ve never heard of.

One can scoff at the above, but that’s a huge reason why some would buy a fund like this.

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Re: Vanguard to add a new core international active equity fund

Post by whodidntante » Fri Jul 19, 2019 1:36 pm

Do we think active management can add > 0.35% of returns versus the Fidelity ZERO international fund without also adding risk? Serious question.

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Re: Vanguard to add a new core international active equity fund

Post by tj » Fri Jul 19, 2019 1:50 pm

whodidntante wrote:
Fri Jul 19, 2019 1:36 pm
Do we think active management can add > 0.35% of returns versus the Fidelity ZERO international fund without also adding risk? Serious question.

Wellington has a strong track record on other vanguard funds. The big concern would be capital gain distributions.

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Re: Vanguard to add a new core international active equity fund

Post by JBeck » Fri Jul 19, 2019 2:18 pm

columbia wrote:
Fri Jul 19, 2019 1:23 pm
A good option for those who don’t want to own 7000+ ex-US companies that they’ve never heard of.

One can scoff at the above, but that’s a huge reason why some would buy a fund like this.
I agree with this.

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Re: Vanguard Expands Active Roster With Proposed International Core Stock Fund

Post by fortyofforty » Sat Jul 20, 2019 8:22 am

Perhaps the best comparison would be International Value, or maybe International High Dividend Yield Index. I'm sure Vanguard will create its own composite hypothetical fund against which it will measure performance.
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Re: Vanguard to add a new core international active equity fund

Post by tibbitts » Sat Jul 20, 2019 9:44 am

columbia wrote:
Fri Jul 19, 2019 1:23 pm
A good option for those who don’t want to own 7000+ ex-US companies that they’ve never heard of.

One can scoff at the above, but that’s a huge reason why some would buy a fund like this.
As opposed to owning thousands of US companies we've never heard of? I think the argument you're making is that active can add value in small companies that essentially nobody has heard of, domestically or internationally. I think studies have shown limited success with that, although intuitively it seems reasonable. You could look at International Explorer as an example, perhaps.

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Re: Vanguard Expands Active Roster With Proposed International Core Stock Fund

Post by stan1 » Sat Jul 20, 2019 9:56 am

Guessing Vanguard PAS will put a lot of clients into this fund who express a desire for a passive and active strategy. Will be set up to scale to billions in AUM.

Wellington and PRIMECAP have both served active Vanguard mutual fund holders well because they have low costs. I still wouldn't buy an actively managed mutual fund today but if I had to 35 basis points with no load is a lot easier to overcome than 100 or 150 basis points with 5% buy-in.

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Re: Vanguard to add a new core international active equity fund

Post by columbia » Sat Jul 20, 2019 10:06 am

tibbitts wrote:
Sat Jul 20, 2019 9:44 am
columbia wrote:
Fri Jul 19, 2019 1:23 pm
A good option for those who don’t want to own 7000+ ex-US companies that they’ve never heard of.

One can scoff at the above, but that’s a huge reason why some would buy a fund like this.
As opposed to owning thousands of US companies we've never heard of? I think the argument you're making is that active can add value in small companies that essentially nobody has heard of, domestically or internationally. I think studies have shown limited success with that, although intuitively it seems reasonable. You could look at International Explorer as an example, perhaps.
My comment was about the psychology of some investors; not the merits of this approach vs. others.

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Re: Vanguard Expands Active Roster With Proposed International Core Stock Fund

Post by nisiprius » Sat Jul 20, 2019 10:09 am

I'm not going to get alarmed about this, but, yeah, it does seem to me that Vanguard is moving noticeably toward adding actively managed funds, and "in-between" (factor funds that follow opaque proprietary "rules-based strategies" instead of tracking indexes). And possibly encouraging the use of ETFs in preference to mutual funds. But since Vanguard has never been ideologically pure, as long as they continue to give me the tools to invest my way I don't care what other things they offer. And of course there has been movement in both directions--for most of their lives the LifeStrategy funds used market timing tactical asset allocation, which was then abandoned.
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Re: Vanguard Expands Active Roster With Proposed International Core Stock Fund

Post by Broken Man 1999 » Sat Jul 20, 2019 11:08 am

I would have to believe Vanguard has made a market decision based on some research.

Personally, I have never thought of Vanguard being one dimensional, but rather a complete mutual fund shop. And, as other investments became available, if the investments were something the market was supporting, I would want Vanguard to provide that solution. If I choose to buy a slice/style of the market, however it may be offered, I like being able to get that slice/style where I am already firmly planted.

I think all Vanguard investors would be harmed if the company were to drape themselves with the comfort of just index funds.

When Vanguard no longer serves my needs, there are plenty of opportunities elsewhere to move our portfolio. One of the greatest benefits of Vanguard is the fact that Vanguard has made investing less expensive pretty much universal.

I'll worry when I see Vanguard NOT attempting to satisfy clients, not when they are staying abreast of the solutions desired by the investing hoards.

Broken Man 1999
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Re: Vanguard Expands Active Roster With Proposed International Core Stock Fund

Post by tibbitts » Sat Jul 20, 2019 1:35 pm

stan1 wrote:
Sat Jul 20, 2019 9:56 am
Guessing Vanguard PAS will put a lot of clients into this fund who express a desire for a passive and active strategy. Will be set up to scale to billions in AUM.

Wellington and PRIMECAP have both served active Vanguard mutual fund holders well because they have low costs. I still wouldn't buy an actively managed mutual fund today but if I had to 35 basis points with no load is a lot easier to overcome than 100 or 150 basis points with 5% buy-in.
It wasn't that long ago that all Vanguard advisers were pushing the combination active and passive strategy (I seem to recall posts complaining about allocations to Diversified Equity?), was it? I wonder what changed?

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Re: Vanguard Expands Active Roster With Proposed International Core Stock Fund

Post by nedsaid » Sat Jul 20, 2019 3:25 pm

nisiprius wrote:
Sat Jul 20, 2019 10:09 am
I'm not going to get alarmed about this, but, yeah, it does seem to me that Vanguard is moving noticeably toward adding actively managed funds, and "in-between" (factor funds that follow opaque proprietary "rules-based strategies" instead of tracking indexes). And possibly encouraging the use of ETFs in preference to mutual funds. But since Vanguard has never been ideologically pure, as long as they continue to give me the tools to invest my way I don't care what other things they offer. And of course there has been movement in both directions--for most of their lives the LifeStrategy funds used market timing tactical asset allocation, which was then abandoned.
Well, Vanguard does market. Vanguard also seeks to give the customer what the customer wants. We know that Vanguard started the index revolution and is a big ETF provider. Vanguard also wants to compete with the factor funds like DFA and wants to continue to compete in the active space. Vanguard even has a Market Neutral Fund. It is becoming sort of the blob that ate the asset management industry. None of this should be of any surprise. We can be assured that wherever Vanguard chooses to compete that it will deliver competent and low cost products.
A fool and his money are good for business.

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Re: Vanguard Expands Active Roster With Proposed International Core Stock Fund

Post by retiringwhen » Sat Jul 20, 2019 3:53 pm

nedsaid wrote:
Sat Jul 20, 2019 3:25 pm
nisiprius wrote:
Sat Jul 20, 2019 10:09 am
I'm not going to get alarmed about this, but, yeah, it does seem to me that Vanguard is moving noticeably toward adding actively managed funds, and "in-between" (factor funds that follow opaque proprietary "rules-based strategies" instead of tracking indexes). And possibly encouraging the use of ETFs in preference to mutual funds. But since Vanguard has never been ideologically pure, as long as they continue to give me the tools to invest my way I don't care what other things they offer. And of course there has been movement in both directions--for most of their lives the LifeStrategy funds used market timing tactical asset allocation, which was then abandoned.
Well, Vanguard does market. Vanguard also seeks to give the customer what the customer wants. We know that Vanguard started the index revolution and is a big ETF provider. Vanguard also wants to compete with the factor funds like DFA and wants to continue to compete in the active space. Vanguard even has a Market Neutral Fund. It is becoming sort of the blob that ate the asset management industry. None of this should be of any surprise. We can be assured that wherever Vanguard chooses to compete that it will deliver competent and low cost products.
Besides, the way to really get back at Fidelity for their salvo with the Zero funds, is to further eat into Fidelity's high ER active business. This would appear to address a small hole in their competitive offerings. There is a lot of 3-D chess going on.

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Re: Vanguard to add a new core international active equity fund

Post by Walkure » Sat Jul 20, 2019 3:55 pm

tj wrote:
Fri Jul 19, 2019 1:50 pm
whodidntante wrote:
Fri Jul 19, 2019 1:36 pm
Do we think active management can add > 0.35% of returns versus the Fidelity ZERO international fund without also adding risk? Serious question.

Wellington has a strong track record on other vanguard funds. The big concern would be capital gain distributions.
My first thought was that when it comes to international, tax rules swamp pretty much any other strategy you can devise. Which led me to ponder, why doesn't Vanguard (or Fidelity, or somebody else) offer a two-fund international index pairing that are optimized for holding in taxable and tax-advantaged spaces respectively. In other words, break out the countries by tax treaty so that the ones which most benefit from the foreign tax credit are meant to be held in a taxable account fund while the countries that get double-taxed/no treaty, or have no foreign withholdings to claim any credit for go into your Roth, but together the two holdings can approximate a total international cap weight.

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Re: Vanguard Expands Active Roster With Proposed International Core Stock Fund

Post by nedsaid » Sat Jul 20, 2019 4:07 pm

retiringwhen wrote:
Sat Jul 20, 2019 3:53 pm
nedsaid wrote:
Sat Jul 20, 2019 3:25 pm
nisiprius wrote:
Sat Jul 20, 2019 10:09 am
I'm not going to get alarmed about this, but, yeah, it does seem to me that Vanguard is moving noticeably toward adding actively managed funds, and "in-between" (factor funds that follow opaque proprietary "rules-based strategies" instead of tracking indexes). And possibly encouraging the use of ETFs in preference to mutual funds. But since Vanguard has never been ideologically pure, as long as they continue to give me the tools to invest my way I don't care what other things they offer. And of course there has been movement in both directions--for most of their lives the LifeStrategy funds used market timing tactical asset allocation, which was then abandoned.
Well, Vanguard does market. Vanguard also seeks to give the customer what the customer wants. We know that Vanguard started the index revolution and is a big ETF provider. Vanguard also wants to compete with the factor funds like DFA and wants to continue to compete in the active space. Vanguard even has a Market Neutral Fund. It is becoming sort of the blob that ate the asset management industry. None of this should be of any surprise. We can be assured that wherever Vanguard chooses to compete that it will deliver competent and low cost products.
Besides, the way to really get back at Fidelity for their salvo with the Zero funds, is to further eat into Fidelity's high ER active business. This would appear to address a small hole in their competitive offerings. There is a lot of 3-D chess going on.
Yep. Vanguard is aiming for DFA's factor fund business and it wants Fidelity's active fund business. You have made a very insightful comment. Profit margins in the mutual fund industry are coming down.
A fool and his money are good for business.

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Re: Vanguard to add a new core international active equity fund

Post by tj » Sat Jul 20, 2019 5:35 pm

Walkure wrote:
Sat Jul 20, 2019 3:55 pm
tj wrote:
Fri Jul 19, 2019 1:50 pm
whodidntante wrote:
Fri Jul 19, 2019 1:36 pm
Do we think active management can add > 0.35% of returns versus the Fidelity ZERO international fund without also adding risk? Serious question.

Wellington has a strong track record on other vanguard funds. The big concern would be capital gain distributions.
My first thought was that when it comes to international, tax rules swamp pretty much any other strategy you can devise. Which led me to ponder, why doesn't Vanguard (or Fidelity, or somebody else) offer a two-fund international index pairing that are optimized for holding in taxable and tax-advantaged spaces respectively. In other words, break out the countries by tax treaty so that the ones which most benefit from the foreign tax credit are meant to be held in a taxable account fund while the countries that get double-taxed/no treaty, or have no foreign withholdings to claim any credit for go into your Roth, but together the two holdings can approximate a total international cap weight.
Doesn't Vanguard essentially already offer this by offering Developed Markets Index and Emerging Markets Index

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Re: Vanguard to add a new core international active equity fund

Post by jeffyscott » Sun Jul 21, 2019 7:08 am

tj wrote:
Sat Jul 20, 2019 5:35 pm
Walkure wrote:
Sat Jul 20, 2019 3:55 pm
tj wrote:
Fri Jul 19, 2019 1:50 pm
whodidntante wrote:
Fri Jul 19, 2019 1:36 pm
Do we think active management can add > 0.35% of returns versus the Fidelity ZERO international fund without also adding risk? Serious question.

Wellington has a strong track record on other vanguard funds. The big concern would be capital gain distributions.
My first thought was that when it comes to international, tax rules swamp pretty much any other strategy you can devise. Which led me to ponder, why doesn't Vanguard (or Fidelity, or somebody else) offer a two-fund international index pairing that are optimized for holding in taxable and tax-advantaged spaces respectively. In other words, break out the countries by tax treaty so that the ones which most benefit from the foreign tax credit are meant to be held in a taxable account fund while the countries that get double-taxed/no treaty, or have no foreign withholdings to claim any credit for go into your Roth, but together the two holdings can approximate a total international cap weight.
Doesn't Vanguard essentially already offer this by offering Developed Markets Index and Emerging Markets Index
In fact Vanguard Tax-Managed International Fund merged with the Developed Markets Index fund in 2014. And according to the wiki, "the additional cost (of developed markets over TM International) is trivial".
https://www.bogleheads.org/wiki/Tax-man ... comparison
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Re: Vanguard Expands Active Roster With Proposed International Core Stock Fund

Post by beyou » Sun Jul 21, 2019 7:46 am

Meh, I am in Total Int and would use Total World at today’s low fees, if not for taxes I would pay to switch out of Total Stock !

I worked in active mgmt firms most of my life. I have seen how the kitchen runs, don’t want to eat there.

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Re: Vanguard Expands Active Roster With Proposed International Core Stock Fund

Post by TropikThunder » Sun Jul 21, 2019 8:04 am

retiringwhen wrote:
Sat Jul 20, 2019 3:53 pm
Besides, the way to really get back at Fidelity for their salvo with the Zero funds, is to further eat into Fidelity's high ER active business. This would appear to address a small hole in their competitive offerings. There is a lot of 3-D chess going on.
+1. There's not much money to be made trying to squeeze under a competitor's 4 bp fund, but in the 35-45 bp range there's more room to maneuver.

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Press Release 10/1/19--Vanguard Adds To Its Active Lineup With Launch Of International Core Stock Fund

Post by MFInvestor » Tue Oct 01, 2019 8:56 am

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

Vanguard Adds To Its Active Lineup With Launch Of International Core Stock Fund

VALLEY FORGE, PA (October 1, 2019)—Vanguard today introduced Vanguard International Core Stock Fund (VWICX), expanding its actively managed roster of more than 70 mutual funds and ETFs.

The new fund, which will be managed by Wellington Management Company LLP (Wellington Management), represents Vanguard’s continued effort to complement its index products with industry-leading active products, including three additional active offerings introduced over the past year: Vanguard Global ESG Select Stock Fund, Vanguard Commodity Strategy Fund, and Vanguard Global Credit Bond Fund.

Vanguard International Core Stock Fund is designed to be a core holding, offering an active portfolio of developed and emerging market equities that is designed to outperform across regions, styles, and sectors. Vanguard advocates for investing in international stocks and bonds for the diversification and return potential, but its research indicates that many U.S. investors exhibit ‘home bias’ and have inadequate exposure to international securities.
https://pressroom.vanguard.com/news/Pre ... -Fund.html

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Re: Press Release 10/1/19--Vanguard Adds To Its Active Lineup With Launch Of International Core Stock Fund

Post by tigerdoc93 » Tue Oct 01, 2019 10:04 am

Thanks for posting. I’ll be monitoring this thread for the boglehead opinions.

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Re: Press Release 10/1/19--Vanguard Adds To Its Active Lineup With Launch Of International Core Stock Fund

Post by Scooter57 » Tue Oct 01, 2019 10:52 am

When I went to sign into Vanguard today I was greeted by huge ad that said, "INTRODUCING VANGUARD INTERNATIONAL CORE STOCK FUND
A new international flavor for your portfolio. Extend your reach beyond U.S. borders—while seeking market-beating returns—with our new actively managed fund."

What gets me is the emphasis here on "market beating returns." For a fund that has no track record. It's modified by the weasel-word "seeking" but that pitch is SO unBogle-ish.

The expense ratio will be .45% for Investor Shares and .35% for Admiral shares. Compare this to Total International's .17% / .11%.

Mind you, I buy funds that aren't Bogle-ish from time to time, with higher expense ratios than index funds.These funds have specific, clearly stated investing mandates that make sense to me in my particular situation. And track records. But the emphasis here on "beating the market" from the same people who are trying to herd me into the one-size-fits-all Advisory Service is just so NOT the Vanguard I have been investing with since 1988. I am really feeling betrayed.

Out of curiosity, I went to look at the website of a company that has decades of "market beating returns" behind it--Primecap Management, whose POAGX Aggressive Growth fund has done very well for me--to see how they pitch their offerings. Their website welcomes you saying, "Four key principles guide PRIMECAP Management Company’s approach to investment selection: commitment to fundamental research, long-term investment horizon, emphasis on individual decision-making, and focus on value." Nothing about beating the market. They just do it. And when you look at their individual fund descriptions, they describe the methodology. Nothing about beating the market.

So I can't help asking, why does Vanguard have to sound so shrill and exploitative of late? They are starting to sound like the shills who write for Marketwatch. This undercuts the whole brand image they had built up over decades. It's stupid and it can't end well.

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Re: Press Release 10/1/19--Vanguard Adds To Its Active Lineup With Launch Of International Core Stock Fund

Post by GaryA505 » Tue Oct 01, 2019 10:56 am

Scooter57 wrote:
Tue Oct 01, 2019 10:52 am
When I went to sign into Vanguard today I was greeted by huge ad that said, "INTRODUCING VANGUARD INTERNATIONAL CORE STOCK FUND
A new international flavor for your portfolio. Extend your reach beyond U.S. borders—while seeking market-beating returns—with our new actively managed fund."

What gets me is the emphasis here on "market beating returns." For a fund that has no track record. It's modified by the weasel-word "seeking" but that pitch is SO unBogle-ish.

The expense ratio will be .45% for Investor Shares and .35% for Admiral shares. Compare this to Total International's .17% / .11%.

Mind you, I buy funds that aren't Bogle-ish from time to time, with higher expense ratios than index funds.These funds have specific, clearly stated investing mandates that make sense to me in my particular situation. And track records. But the emphasis here on "beating the market" from the same people who are trying to herd me into the one-size-fits-all Advisory Service is just so NOT the Vanguard I have been investing with since 1988. I am really feeling betrayed.

Out of curiosity, I went to look at the website of a company that has decades of "market beating returns" behind it--Primecap Management, whose POAGX Aggressive Growth fund has done very well for me--to see how they pitch their offerings. Their website welcomes you saying, "Four key principles guide PRIMECAP Management Company’s approach to investment selection: commitment to fundamental research, long-term investment horizon, emphasis on individual decision-making, and focus on value." Nothing about beating the market. They just do it. And when you look at their individual fund descriptions, they describe the methodology. Nothing about beating the market.

So I can't help asking, why does Vanguard have to sound so shrill and exploitative of late? They are starting to sound like the shills who write for Marketwatch. This undercuts the whole brand image they had built up over decades. It's stupid and it can't end well.
And then they also want you to invest 40% of your equity side in international. It makes me wonder ...

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Re: Press Release 10/1/19--Vanguard Adds To Its Active Lineup With Launch Of International Core Stock Fund

Post by Scooter57 » Tue Oct 01, 2019 11:06 am

They not only "want" you to invest that way, if you PAY them to advise you and invest your money that's what they'll do with it.

The more I think of it, the more I think that an investment "Advisory service" that only invests in the offerings of one company is, by definition, unable to be a fiduciary in the true meaning of the word. I would want my investment advisor (if I was ever becoming so demented that I had to trust one) to buy the best funds for my personal needs, which would match my stated investment goals, and those goals should be determined by more than a questionnaire asking how aggressive I wanted to

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Vanguard International Core Stock Fund

Post by bei22000 » Tue Oct 01, 2019 11:26 am

[Merged here by moderator oldcomputerguy]

I have got news from my email that vanguard just launched a new fund "Vanguard International Core Stock Fund" for $10/share. I do have some cash in money market with my roth ira account. In additional to my 7 funds (core) portfolio (index-based), is it worth investing in some money in this type of active managed fund (small amount)? any suggestions. thank you.

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Re: Press Release 10/1/19--Vanguard Adds To Its Active Lineup With Launch Of International Core Stock Fund

Post by lazyday » Tue Oct 01, 2019 11:31 am

From the press release:
The firm’s approach targets an opportunity set of 350-400 companies, of which the fund will seek to hold approximately 60-100 large- and mid-cap stocks based on its assessment of each company’s management team, capital allocation, and competitive advantage.

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Vanguard Adds To Its Active Lineup With Launch Of International Core Stock Fund

Post by Taylor Larimore » Tue Oct 01, 2019 11:32 am

Bogleheads:

It is unfortunate that Vanguard is promoting a new international managed mutual fund. According to the SPIVA U.S. Year-End 2018 Scorecard, "89.83% of International Funds were outperformed by their benchmark index."

Knowledgeable investors use broad market index funds.

https://www.spglobal.com/_assets/docume ... h-2019.pdf

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "The reality is that we do better than the rest of the world. You don't need currency risk, but if you want, don't go over 20% in international."
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Freedom of Choice

Post by Socrates » Tue Oct 01, 2019 11:38 am

A good option for those who don’t want to own 7000+ ex-US companies that they’ve never heard of.

One can scoff at the above, but that’s a huge reason why some would buy a fund like this.

I totally agree. I like they provide, low cost options, so investors can choose.

Wellington has a great track record. My understanding this is a fund of stocks and bonds.
“Don't waste your time looking back. You're not going that way.” ― Ragnar Lothbrok.

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Re: Vanguard International Core Stock Fund

Post by KingRiggs » Tue Oct 01, 2019 12:10 pm

Why would you suddenly jump into active investing if you have embraced index investing to this point? And if you are following the Boglehead philosophy and already hold international equities in an index fund, you already own the 60-80 stocks they are planning to own...All for a lower ER.
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Re: Vanguard Expands Active Roster With Proposed International Core Stock Fund

Post by Broken Man 1999 » Tue Oct 01, 2019 12:49 pm

Choice, what a wonderful decision-making opportunity!

What is good for ME might not be good for THEE, but neither of us are forced to accept a choice we do not want.

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Re: Vanguard Expands Active Roster With Proposed International Core Stock Fund

Post by Scooter57 » Tue Oct 01, 2019 2:17 pm

We have chouces, but lately we Vanguard account holders are being forced to absorb heavy-handed marketing messages every time we log in to our accounts. I wouldn't care so much if there was some way to opt out of the ads, but there isn't. It gets in the way every time I go in to do a bank transfer.

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Re: Vanguard Expands Active Roster With Proposed International Core Stock Fund

Post by Taylor Larimore » Tue Oct 01, 2019 2:23 pm

Bogleheads:

It is unfortunate that Vanguard is promoting a new international managed mutual fund. According to the SPIVA U.S. Year-End 2018 Scorecard, Report 11, "89.83% of International Funds were outperformed by their benchmark index."

Knowledgeable investors use broad market index funds.

https://www.spglobal.com/_assets/docume ... h-2019.pdf

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "I would limit yourself to 20 percent of your portfolio in foreign stocks. I don’t do it myself."
Last edited by Taylor Larimore on Tue Oct 01, 2019 2:36 pm, edited 3 times in total.
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Re: Vanguard Expands Active Roster With Proposed International Core Stock Fund

Post by Big Dog » Tue Oct 01, 2019 2:24 pm

I've been zero international but I just might bite on this fund.

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Re: Vanguard to add a new core international active equity fund

Post by Northern Flicker » Tue Oct 01, 2019 2:25 pm

whodidntante wrote:
Fri Jul 19, 2019 1:36 pm
Do we think active management can add > 0.35% of returns versus the Fidelity ZERO international fund without also adding risk? Serious question.
Of course active management always increases risk. The fund announcement suggests it will over and underweight different sectors as a significant part of its strategy. That is not an appealing strategy to me, with concerns it would foster some uncompensated risk.

The fund has a $50K minimum to get Admiral shares with the 0.35% ER, otherwise the ER is 0.45%.

I think Vanguard already has some very good, reasonably priced actively managed int’l equity funds if that is your cup of tea: VTRIX (int’l value) and VINEX (int’l explorer).

Hard to say what the niche is for the new fund, but I suspect it is trying to compete with Dodge & Cox and others for the attention of 401K plan advisors looking for an actively managed int’l equity fund to include in plans— hence the name “Int’l Core Stock Fund” for a concentrated portfolio of 60-100 stocks selected from a universe of 7000+.
Risk is not a guarantor of return.

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Re: Vanguard to add a new core international active equity fund

Post by MotoTrojan » Tue Oct 01, 2019 3:17 pm

tj wrote:
Fri Jul 19, 2019 1:50 pm
whodidntante wrote:
Fri Jul 19, 2019 1:36 pm
Do we think active management can add > 0.35% of returns versus the Fidelity ZERO international fund without also adding risk? Serious question.

Wellington has a strong track record on other vanguard funds. The big concern would be capital gain distributions.
Compared against what benchmark? I was under the impression that they took additional credit and duration risk as compared to total bond, thus explaining the bulk of the outperformance.

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Re: Press Release 10/1/19--Vanguard Adds To Its Active Lineup With Launch Of International Core Stock Fund

Post by LadyGeek » Tue Oct 01, 2019 4:49 pm

I merged MFInvestor's initial announcement into the Vanguard press release thread. The software sorts by time, the initial announcement is first.
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Re: Press Release 10/1/19--Vanguard Adds To Its Active Lineup With Launch Of International Core Stock Fund

Post by bigROI » Tue Oct 01, 2019 10:46 pm

Considering the broad scope of international funds and multitude of risk factors its probably worth having this run with some degree of active research. I may split my international half and half between the index and this core fund and monitor the outcome.
A penny saved is much more then a penny earned when you consider the tax/SS/medicare cut.

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Re: Press Release 10/1/19--Vanguard Adds To Its Active Lineup With Launch Of International Core Stock Fund

Post by oldzey » Tue Oct 01, 2019 11:10 pm

I'll admit, the Vanguard homepage looked appealing today. Now I'm hungry.

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Re: Vanguard to add a new core international active equity fund

Post by tj » Tue Oct 01, 2019 11:34 pm

MotoTrojan wrote:
Tue Oct 01, 2019 3:17 pm
tj wrote:
Fri Jul 19, 2019 1:50 pm
whodidntante wrote:
Fri Jul 19, 2019 1:36 pm
Do we think active management can add > 0.35% of returns versus the Fidelity ZERO international fund without also adding risk? Serious question.

Wellington has a strong track record on other vanguard funds. The big concern would be capital gain distributions.
Compared against what benchmark? I was under the impression that they took additional credit and duration risk as compared to total bond, thus explaining the bulk of the outperformance.
Dividend Growth vs it's benchmark, Equity Income vs it's benchmark, Wellesley vs it's benchmark...I'm sure there are others.

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Re: Vanguard to add a new core international active equity fund

Post by MotoTrojan » Wed Oct 02, 2019 6:57 am

tj wrote:
Tue Oct 01, 2019 11:34 pm
MotoTrojan wrote:
Tue Oct 01, 2019 3:17 pm
tj wrote:
Fri Jul 19, 2019 1:50 pm
whodidntante wrote:
Fri Jul 19, 2019 1:36 pm
Do we think active management can add > 0.35% of returns versus the Fidelity ZERO international fund without also adding risk? Serious question.

Wellington has a strong track record on other vanguard funds. The big concern would be capital gain distributions.
Compared against what benchmark? I was under the impression that they took additional credit and duration risk as compared to total bond, thus explaining the bulk of the outperformance.
Dividend Growth vs it's benchmark, Equity Income vs it's benchmark, Wellesley vs it's benchmark...I'm sure there are others.
I’m asking what benchmark was used for Wellington and questioning how representative it was; ie. maybe the active aspect didn’t really drive the returns as much as one would think (longer bond duration and higher credit risk).

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Re: Vanguard to add a new core international active equity fund

Post by tj » Wed Oct 02, 2019 8:07 am

MotoTrojan wrote:
Wed Oct 02, 2019 6:57 am
tj wrote:
Tue Oct 01, 2019 11:34 pm
MotoTrojan wrote:
Tue Oct 01, 2019 3:17 pm
tj wrote:
Fri Jul 19, 2019 1:50 pm
whodidntante wrote:
Fri Jul 19, 2019 1:36 pm
Do we think active management can add > 0.35% of returns versus the Fidelity ZERO international fund without also adding risk? Serious question.

Wellington has a strong track record on other vanguard funds. The big concern would be capital gain distributions.
Compared against what benchmark? I was under the impression that they took additional credit and duration risk as compared to total bond, thus explaining the bulk of the outperformance.
Dividend Growth vs it's benchmark, Equity Income vs it's benchmark, Wellesley vs it's benchmark...I'm sure there are others.
I’m asking what benchmark was used for Wellington and questioning how representative it was; ie. maybe the active aspect didn’t really drive the returns as much as one would think (longer bond duration and higher credit risk).
The Wellington fund specifically isn't one that has an amazing track record in recent years. Probably due to asset bloat.

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Re: Vanguard Adds To Its Active Lineup With Launch Of International Core Stock Fund

Post by fortyofforty » Wed Oct 02, 2019 8:57 pm

Taylor Larimore wrote:
Tue Oct 01, 2019 11:32 am
Bogleheads:

It is unfortunate that Vanguard is promoting a new international managed mutual fund. According to the SPIVA U.S. Year-End 2018 Scorecard, "89.83% of International Funds were outperformed by their benchmark index."

Knowledgeable investors use broad market index funds.

https://www.spglobal.com/_assets/docume ... h-2019.pdf

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "The reality is that we do better than the rest of the world. You don't need currency risk, but if you want, don't go over 20% in international."
Well-said, Taylor. I know why Vanguard is doing it (to make money by attracting new investors) but it is a departure from what we believe to be the foundational principles of the company.

They do clearly recommend about 40% of equity investments be in international:
"Consider dedicating about 40% of the stock portion of your portfolio to international investments, according to our research."
"In a time of universal deceit, telling the truth becomes a revolutionary act." - George Orwell | Diligentia. Vis. Celeritas. - Jeff Cooper | Original Vanguard Diehard

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Re: Press Release 10/1/19--Vanguard Adds To Its Active Lineup With Launch Of International Core Stock Fund

Post by NYCwriter » Thu Oct 03, 2019 12:15 am

I came here tonight looking for feedback on this fund, since I saw it being promoted. Not really surprised at the comments. :D

I still own VEA/VWO, exchanged from Total Int'l in late 2015, and actually reduced both last year and early this year to about 16% from 20% since my allocation is getting more conservative. It's in my taxable, where I don't have any managed funds, but will hopefully be set up in my Roth at some point.

Q: I went to the fund page today to look at the portfolio holdings, and see that the fund is in "subscription mode." I'm curious if there's any benefit to this for investors, at $10 a share.

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Re: Press Release 10/1/19--Vanguard Adds To Its Active Lineup With Launch Of International Core Stock Fund

Post by abuss368 » Thu Oct 03, 2019 7:41 pm

MFInvestor wrote:
Fri Jul 19, 2019 9:48 am
[Title was "Vanguard Expands Active Roster With Proposed International Core Stock Fund"

The fund has been launched, see below. --admin LadyGeek]


Press Release by Vanguard 7/18/2019
I didn't see anything on the forum regarding this

https://pressroom.vanguard.com/news/Pre ... 71819.html
VALLEY FORGE, PA (July 18, 2019)—Vanguard today filed a preliminary registration with the U.S. Securities and Exchange Commission for Vanguard International Core Stock Fund. The new actively managed fund will be managed by Wellington Management Company LLP (Wellington Management) and is expected to be available to investors in the fourth quarter of 2019.

Vanguard, one of the largest providers of actively managed funds in the asset management industry, has been expanding its actively managed roster over the past two years, introducing a suite of factor ETFs, an ESG fund, a commodities fund, two global balanced funds, and two fixed income funds —Vanguard Global Credit Bond Fund and Vanguard Emerging Markets Bond Fund.

A low-cost, diversified entrant to the market

Vanguard International Core Stock Fund will offer broad equity exposure to both developed and emerging non-U.S. markets, blending growth and value styles and diversifying across a range of sectors. The fund will seek to provide long-term capital appreciation and hold approximately 60-100 stocks, with no individual positions representing greater than 5% of the portfolio. It is expected to have moderate overweight or underweight allocations to sectors and regions relative to the MSCI ACWI ex USA Index.
Thank you for sharing. It just continues to puzzle why the search for alpha and all the active funds that are being developed and marketed by Vanguard. Commodities, Core Bond, Core International. What is next?
John C. Bogle: "Simplicity is the master key to financial success."

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Re: Press Release 10/1/19--Vanguard Adds To Its Active Lineup With Launch Of International Core Stock Fund

Post by fortyofforty » Thu Oct 03, 2019 9:09 pm

abuss368 wrote:
Thu Oct 03, 2019 7:41 pm
MFInvestor wrote:
Fri Jul 19, 2019 9:48 am
[Title was "Vanguard Expands Active Roster With Proposed International Core Stock Fund"

The fund has been launched, see below. --admin LadyGeek]


Press Release by Vanguard 7/18/2019
I didn't see anything on the forum regarding this

https://pressroom.vanguard.com/news/Pre ... 71819.html
VALLEY FORGE, PA (July 18, 2019)—Vanguard today filed a preliminary registration with the U.S. Securities and Exchange Commission for Vanguard International Core Stock Fund. The new actively managed fund will be managed by Wellington Management Company LLP (Wellington Management) and is expected to be available to investors in the fourth quarter of 2019.

Vanguard, one of the largest providers of actively managed funds in the asset management industry, has been expanding its actively managed roster over the past two years, introducing a suite of factor ETFs, an ESG fund, a commodities fund, two global balanced funds, and two fixed income funds —Vanguard Global Credit Bond Fund and Vanguard Emerging Markets Bond Fund.

A low-cost, diversified entrant to the market

Vanguard International Core Stock Fund will offer broad equity exposure to both developed and emerging non-U.S. markets, blending growth and value styles and diversifying across a range of sectors. The fund will seek to provide long-term capital appreciation and hold approximately 60-100 stocks, with no individual positions representing greater than 5% of the portfolio. It is expected to have moderate overweight or underweight allocations to sectors and regions relative to the MSCI ACWI ex USA Index.
Thank you for sharing. It just continues to puzzle why the search for alpha and all the active funds that are being developed and marketed by Vanguard. Commodities, Core Bond, Core International. What is next?
Vanguard apparently does not value the teachings of John Bogle as much as Bogleheads do.
"In a time of universal deceit, telling the truth becomes a revolutionary act." - George Orwell | Diligentia. Vis. Celeritas. - Jeff Cooper | Original Vanguard Diehard

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Re: Press Release 10/1/19--Vanguard Adds To Its Active Lineup With Launch Of International Core Stock Fund

Post by abuss368 » Thu Oct 03, 2019 9:15 pm

fortyofforty wrote:
Thu Oct 03, 2019 9:09 pm
abuss368 wrote:
Thu Oct 03, 2019 7:41 pm
MFInvestor wrote:
Fri Jul 19, 2019 9:48 am
[Title was "Vanguard Expands Active Roster With Proposed International Core Stock Fund"

The fund has been launched, see below. --admin LadyGeek]


Press Release by Vanguard 7/18/2019
I didn't see anything on the forum regarding this

https://pressroom.vanguard.com/news/Pre ... 71819.html
VALLEY FORGE, PA (July 18, 2019)—Vanguard today filed a preliminary registration with the U.S. Securities and Exchange Commission for Vanguard International Core Stock Fund. The new actively managed fund will be managed by Wellington Management Company LLP (Wellington Management) and is expected to be available to investors in the fourth quarter of 2019.

Vanguard, one of the largest providers of actively managed funds in the asset management industry, has been expanding its actively managed roster over the past two years, introducing a suite of factor ETFs, an ESG fund, a commodities fund, two global balanced funds, and two fixed income funds —Vanguard Global Credit Bond Fund and Vanguard Emerging Markets Bond Fund.

A low-cost, diversified entrant to the market

Vanguard International Core Stock Fund will offer broad equity exposure to both developed and emerging non-U.S. markets, blending growth and value styles and diversifying across a range of sectors. The fund will seek to provide long-term capital appreciation and hold approximately 60-100 stocks, with no individual positions representing greater than 5% of the portfolio. It is expected to have moderate overweight or underweight allocations to sectors and regions relative to the MSCI ACWI ex USA Index.
Thank you for sharing. It just continues to puzzle why the search for alpha and all the active funds that are being developed and marketed by Vanguard. Commodities, Core Bond, Core International. What is next?
Vanguard apparently does not value the teachings of John Bogle as much as Bogleheads do.
Sad and I will never understand that.
John C. Bogle: "Simplicity is the master key to financial success."

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Re: Press Release 10/1/19--Vanguard Adds To Its Active Lineup With Launch Of International Core Stock Fund

Post by oldzey » Thu Oct 03, 2019 9:21 pm

Were Mr. Bogle still with us, one can only imagine his comments while discussing this fund (akin to his Bitcoin or Smart Beta remarks).
"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman

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