Vanguard to cut $1bn in expense ratios by 2025

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byline0802
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Vanguard to cut $1bn in expense ratios by 2025

Post by byline0802 »

Yesterday, the Financial Times (London) carried an article featuring an interview with Vanguard CEO Tim Buckley in which he committed Vanguard to cut $1bn from its investment fund fees by 2025 after reducing its charges by $140m last year. The fee cuts would be across Vanguard's active and passive funds.

Buckley said, "Can you think of any other manager that would hand back $1bn in revenues?'"

"Pennsylvania-based Vanguard has gained a reputation as one of the investment industry’s toughest price competitors by continuously reducing its fund fees since it was founded in 1975, a strategy that has helped it to recruit more than 30m clients. Investors allocated $299.4bn in new cash to Vanguard’s funds last year, up 61 per cent on the $186bn of net inflows registered in 2020."

Full article (likely for subscribers only): https://on.ft.com/3flnzR0
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by CRC_Volunteer »

As Arte Johnson would say, “Very Interesting…”.
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by smectym »

byline0802 wrote: Thu Jan 13, 2022 11:42 pm Yesterday, the Financial Times (London) carried an article featuring an interview with Vanguard CEO Tim Buckley in which he committed Vanguard to cut $1bn from its investment fund fees by 2025 after reducing its charges by $140m last year. The fee cuts would be across Vanguard's active and passive funds.

Buckley said, "Can you think of any other manager that would hand back $1bn in revenues?'"

"Pennsylvania-based Vanguard has gained a reputation as one of the investment industry’s toughest price competitors by continuously reducing its fund fees since it was founded in 1975, a strategy that has helped it to recruit more than 30m clients. Investors allocated $299.4bn in new cash to Vanguard’s funds last year, up 61 per cent on the $186bn of net inflows registered in 2020."

Full article (likely for subscribers only): https://on.ft.com/3flnzR0
Excellent. The difference today is that Vanguard is far from the only shop cutting ER’s, commissions &c.to the bone.

For Vanguard, perhaps the greater challenge is to avoid being seen as a one-trick pony, and to up its game in other areas as well. But that said, the continued commitment to lowering expenses for investors in V funds is most welcome.
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by spammagnet »

smectym wrote: Thu Jan 13, 2022 11:55 pm... For Vanguard, perhaps the greater challenge is to avoid being seen as a one-trick pony, ...
It's a pretty good trick.
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by Sprucebark »

I suppose that means Vanguard isn’t investing in its customer service woes…
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by nalor511 »

Sprucebark wrote: Fri Jan 14, 2022 12:30 am I suppose that means Vanguard isn’t investing in its customer service woes…
🤣
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by anon_investor »

nalor511 wrote: Fri Jan 14, 2022 1:00 am
Sprucebark wrote: Fri Jan 14, 2022 12:30 am I suppose that means Vanguard isn’t investing in its customer service woes…
🤣
Note to self, buy more VTI at Fidelity. :twisted:
AQ
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by AQ »

anon_investor wrote: Fri Jan 14, 2022 1:18 am

Note to self, buy more VTI at Fidelity. :twisted:
Buying VTI at Fidelity would entail commission? How to avoid it?
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by DSInvestor »

Fidelity does not charge commission for online ETF trades.

Fidelity Commission schedule:
https://www.fidelity.com/trading/commis ... rgin-rates
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3000
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by 3000 »

Sprucebark wrote: Fri Jan 14, 2022 12:30 am I suppose that means Vanguard isn’t investing in its customer service woes…
Cutting the customer service budget more likely.
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by dkturner »

3000 wrote: Fri Jan 14, 2022 2:07 am
Sprucebark wrote: Fri Jan 14, 2022 12:30 am I suppose that means Vanguard isn’t investing in its customer service woes…
Cutting the customer service budget more likely.
Which Vanguard can do by pushing ETFs at the expense of its mutual funds lineup.
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by Cheez-It Guy »

Good.

They are built on low costs. It's their M.O. As for tricks, I'd more likely ascribe that to their competitors. When customers more broadly recognize the benefits of and demand low costs, traditional competitor revenue streams currently being redirected to subsidize will gradually evaporate. Then let's see how well their vaunted customer service performs on equal footing.
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by UpperNwGuy »

At some point the impact of Vanguard's cost cutting will spread beyond its computer systems and customer service functions. The management of the mutual funds and ETFs could also suffer, and that would make me nervous.
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by AlphaLess »

Interesting article.

Vanguard AUM: $7.2 Trillion.
Cut expenses by: $1.0 Billion.

That is 1.38 basis points.

Not bad, but somehow, I don't think this is going to be proportionally applied.
Also, somehow, there is no more room to cut.

Institutional Plus already has expenses of 2 basis points:
https://investor.vanguard.com/mutual-fu ... file/VSMPX

The ETF, VTI, has 3 basis points.
https://investor.vanguard.com/etf/profile/vti

And the admiral has 4 basis points:
https://investor.vanguard.com/mutual-fu ... file/vtsax
Last edited by AlphaLess on Fri Jan 14, 2022 8:25 am, edited 1 time in total.
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by RedDog »

AQ wrote: Fri Jan 14, 2022 1:43 am
anon_investor wrote: Fri Jan 14, 2022 1:18 am

Note to self, buy more VTI at Fidelity. :twisted:
Buying VTI at Fidelity would entail commission? How to avoid it?
Maybe that’s Vanguard’s goal.
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by prd1982 »

Wonder how much they would save by eliminating their mutual fund platform?

They could also plan on spending money to improve their online systems and thus reduce customer calls. Although I didn’t read the article, the statement implies the savings in 2025.
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by livesoft »

Things that Vanguard paid employees to do will have to be done by clients. Those employees will be gone. So not only will Vanguard give back a billion dollars to clients, it will make those clients do about 2 billion dollars of extra work that used to be done for them.
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by Goodenoughforme »

Hearing about expense ratio cuts is great, but are probably a big part of their plans to attract more business. I believe Tim certainly has plans to generate more revenue growth. Vanguard has a variety of channels to cut fees and grow revenue (401K business, IRA's, fees charged for short sellers, etc.).
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by ClevrChico »

A race to zero, I guess. I'd rather have a great app/website, great customer service, and have them treat employees better.
Dandy
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by Dandy »

It is great to reduce ERs but at some point many other firms will/have become much more competitive on costs. Also the actual dollar impact of such a change is often undervalued i.e. we know it is beneficial but do we calculate the dollar gain? But we do feel the impact of bad computer programs, long waits to have calls answered, etc.

I think better service will tend to become the competitive edge. Excellent computer programs, call centers opened 7 days a week maybe even 24/7, locations where customers can meet with someone to discuss their needs, etc.
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by hudson »

Whose fault is it that we have all of these low expense funds and ETFs?
Who killed load funds?...well almost killed.
My hat is off.
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by invest4 »

prd1982 wrote: Fri Jan 14, 2022 8:28 am Wonder how much they would save by eliminating their mutual fund platform?
This will absolutely happen...just takes time. Personally, I don't really understand why any new investor would seek mutual funds vs ETFs.
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by sizzlefuzz »

invest4 wrote: Fri Jan 14, 2022 9:26 am
prd1982 wrote: Fri Jan 14, 2022 8:28 am Wonder how much they would save by eliminating their mutual fund platform?
Personally, I don't really understand why any new investor would seek mutual funds vs ETFs.
The blended MFs like target date and LifeStrategy or Wellington/Wellesley would probably remain. Or, I could see Vanguard thinking up a way to convert them to an ETF.
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by Svensk Anga »

I wonder if the advice business will be carrying more of the Vanguard overhead in order to make the funds more competitive with the loss leader funds from other firms. Vanguard cannot compete with Fidelity zero funds on cost. This could explain why they have been pushing advice so hard.

Pay 30 basis points for advice and get a 1 BP break on fund costs.
Last edited by Svensk Anga on Fri Jan 14, 2022 9:40 am, edited 1 time in total.
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by 100factorial »

invest4 wrote: Fri Jan 14, 2022 9:26 am
prd1982 wrote: Fri Jan 14, 2022 8:28 am Wonder how much they would save by eliminating their mutual fund platform?
This will absolutely happen...just takes time. Personally, I don't really understand why any new investor would seek mutual funds vs ETFs.
Mutual fund shares are unlikely to go away anytime soon IMHO. So many people and institutions (retirement plans, education savings plans, etc.) own them. I'd be surprised if the fund manager has legal capacity to remove owners from their ownership interests.
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by Whakamole »

sizzlefuzz wrote: Fri Jan 14, 2022 9:34 am
invest4 wrote: Fri Jan 14, 2022 9:26 am
prd1982 wrote: Fri Jan 14, 2022 8:28 am Wonder how much they would save by eliminating their mutual fund platform?
Personally, I don't really understand why any new investor would seek mutual funds vs ETFs.
The blended MFs like target date and LifeStrategy or Wellington/Wellesley would probably remain. Or, I could see Vanguard thinking up a way to convert them to an ETF.
They can create Institutional shares with a lower ER as well. There are very few stock/bond allocation funds that trade as an ETF - BlackRock has a few.
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by prd1982 »

prd1982 wrote: Fri Jan 14, 2022 8:28 am Wonder how much they would save by eliminating their mutual fund platform?
Just to be clear — I didn’t say eliminate Mutual Funds, just the mutual fund only platform.
Last edited by prd1982 on Fri Jan 14, 2022 10:28 am, edited 1 time in total.
WhenIsItTime
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by WhenIsItTime »

Goodenoughforme wrote: Fri Jan 14, 2022 8:57 am Hearing about expense ratio cuts is great, but are probably a big part of their plans to attract more business. I believe Tim certainly has plans to generate more revenue growth. Vanguard has a variety of channels to cut fees and grow revenue (401K business, IRA's, fees charged for short sellers, etc.).
I agree. I think key word is ratios. Wonder how the much market growth assumption compares to cost increase creating avoidance as opposed to actual savings. Still good for investors assuming services stay the same, but less amazing.
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by runner26 »

For those who wonder when Vanguard will finally force legacy trading platform accounts to move to a brokerage account, perhaps 2025.
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by quietseas »

AQ wrote: Fri Jan 14, 2022 1:43 am
anon_investor wrote: Fri Jan 14, 2022 1:18 am

Note to self, buy more VTI at Fidelity. :twisted:
Buying VTI at Fidelity would entail commission? How to avoid it?
It is very easy to avoid paying commission on ETF trades at Fidelity. Free trades have been around for a few years now. You just enter a buy or sell order and there is no commission.

There is no commission to buy VTI or any other ETF for that matter at Fidelity.

There's also no commission to buy any ETF at Vanguard, either.
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by Parkinglotracer »

Vanguard must be making LOTS of money if they can do that
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by Parkinglotracer »

ClevrChico wrote: Fri Jan 14, 2022 9:11 am A race to zero, I guess. I'd rather have a great app/website, great customer service, and have them treat employees better.
+1
They can start by publishing a phone number and answering it.
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by quietseas »

Sprucebark wrote: Fri Jan 14, 2022 12:30 am I suppose that means Vanguard isn’t investing in its customer service woes…
It means they are investing in automation, which is kind of buggy right now but that will get resolved in a year or two, and after that they are going to lay off a bunch of customer service reps or convert them to PAS advisors for fee paying customers. Also, they expect AUM to continue to grow substantially without needing to hire a lot of new people.

Or they will sell off their brokerage business to someone else and be more like Blackrock.
Last edited by quietseas on Fri Jan 14, 2022 10:43 am, edited 1 time in total.
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by TheTimeLord »

ClevrChico wrote: Fri Jan 14, 2022 9:11 am A race to zero, I guess. I'd rather have a great app/website, great customer service, and have them treat employees better.
+100, While in aggregate this sounds like a huge number it will probably not make anywhere near the impact to individual investors that modernizing their technology and customer service platforms would.
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by Whakamole »

anon_investor wrote: Fri Jan 14, 2022 1:18 am Note to self, buy more VTI at Fidelity. :twisted:
I own Fidelity funds at Fidelity (in tax-deferred) in part to support their good customer service. That their ERs are lower is a nice benefit. If my account was at Schwab, I'd be doing the same there.

Expense ratios for Vanguard's bread-and-butter index funds are already close to zero (including securities lending); I don't see the point in even more cost-cutting. Perhaps they are going to cut PAS fees by getting rid of the humans.
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by quietseas »

Ooops
Last edited by quietseas on Fri Jan 14, 2022 7:02 pm, edited 1 time in total.
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by galawdawg »

Whakamole wrote: Fri Jan 14, 2022 10:45 am
anon_investor wrote: Fri Jan 14, 2022 1:18 am Note to self, buy more VTI at Fidelity. :twisted:
I own Fidelity funds at Fidelity (in tax-deferred) in part to support their good customer service. That their ERs are lower is a nice benefit. If my account was at Schwab, I'd be doing the same there.
I'm at Schwab and that's what I did last year. Divested all of our Vanguard holdings in our tax-advantaged accounts and invested instead in Schwab funds. Still hold a modest Vanguard position in our taxable brokerage account which will gradually be sold off over the next few years.
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by GP813 »

This is great but how much worse is the customer service going to get?
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by Apathizer »

UpperNwGuy wrote: Fri Jan 14, 2022 8:09 am At some point the impact of Vanguard's cost cutting will spread beyond its computer systems and customer service functions. The management of the mutual funds and ETFs could also suffer, and that would make me nervous.
I'm also worried about that. ER already seem low enough to me. If the average index ER is about 0.06%, reducing it to 0.04% makes no practical return difference. I'd rather they remain at current levels or even increases slightly if it would mean improved IT/operational efficiency and customer service.

ER are already so low I'm worried it might lead to being penny wise and pound foolish if it hasn't already.
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by exodusNH »

invest4 wrote: Fri Jan 14, 2022 9:26 am
prd1982 wrote: Fri Jan 14, 2022 8:28 am Wonder how much they would save by eliminating their mutual fund platform?
This will absolutely happen...just takes time. Personally, I don't really understand why any new investor would seek mutual funds vs ETFs.
401ks and similar plans need a place to put money. Having a single NAV calculated at the end of the day is much easier.

Some people don't like the stock-like nature of ETFs.

Many places don't offer automatic investment into ETFs.

Some places don't offer fractional purchases of ETFs. Mutual funds take exact dollar and cents purchases. This would be less of an issue if the ETFs would do splits to keep the share prices around $100. (Looking at you, VOO!)

People who work in the financial industry have trading restrictions.
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by Nate79 »

exodusNH wrote: Fri Jan 14, 2022 11:32 am
invest4 wrote: Fri Jan 14, 2022 9:26 am
prd1982 wrote: Fri Jan 14, 2022 8:28 am Wonder how much they would save by eliminating their mutual fund platform?
This will absolutely happen...just takes time. Personally, I don't really understand why any new investor would seek mutual funds vs ETFs.
401ks and similar plans need a place to put money. Having a single NAV calculated at the end of the day is much easier.

Some people don't like the stock-like nature of ETFs.

Many places don't offer automatic investment into ETFs.

Some places don't offer fractional purchases of ETFs. Mutual funds take exact dollar and cents purchases. This would be less of an issue if the ETFs would do splits to keep the share prices around $100. (Looking at you, VOO!)

People who work in the financial industry have trading restrictions.
prd1982 didn't say anything about eliminating mutual funds.
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by exodusNH »

Nate79 wrote: Fri Jan 14, 2022 11:44 am
exodusNH wrote: Fri Jan 14, 2022 11:32 am
invest4 wrote: Fri Jan 14, 2022 9:26 am
prd1982 wrote: Fri Jan 14, 2022 8:28 am Wonder how much they would save by eliminating their mutual fund platform?
This will absolutely happen...just takes time. Personally, I don't really understand why any new investor would seek mutual funds vs ETFs.
401ks and similar plans need a place to put money. Having a single NAV calculated at the end of the day is much easier.

Some people don't like the stock-like nature of ETFs.

Many places don't offer automatic investment into ETFs.

Some places don't offer fractional purchases of ETFs. Mutual funds take exact dollar and cents purchases. This would be less of an issue if the ETFs would do splits to keep the share prices around $100. (Looking at you, VOO!)

People who work in the financial industry have trading restrictions.
prd1982 didn't say anything about eliminating mutual funds.
I was responding to the question as to why new investors would prefer mutual funds over ETFs.

The mobile interface makes it difficult to delete unwanted text.
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by Whakamole »

exodusNH wrote: Fri Jan 14, 2022 11:32 am
invest4 wrote: Fri Jan 14, 2022 9:26 am
prd1982 wrote: Fri Jan 14, 2022 8:28 am Wonder how much they would save by eliminating their mutual fund platform?
This will absolutely happen...just takes time. Personally, I don't really understand why any new investor would seek mutual funds vs ETFs.
401ks and similar plans need a place to put money. Having a single NAV calculated at the end of the day is much easier.

Some people don't like the stock-like nature of ETFs.

Many places don't offer automatic investment into ETFs.

Some places don't offer fractional purchases of ETFs. Mutual funds take exact dollar and cents purchases. This would be less of an issue if the ETFs would do splits to keep the share prices around $100. (Looking at you, VOO!)

People who work in the financial industry have trading restrictions.
Many 401(k) plans use institutional-level share classes or collective investment trusts that are unavailable to the public.

I don't see the rest as keeping Vanguard from moving away from a mutual fund platform (and mutual funds) if they intended to cut costs enough. ETF problems like exact dollar amounts have either been solved (I can do that at Fidelity) or can be solved. Converting mutual fund shares to ETF shares will save Vanguard money. You could even do away with the entire brokerage site at that point if you really wanted to, becoming more like BlackRock.

They're not going to keep the mutual fund only platform up if it's costing them more time and money than it's worth. If there are other brokerages which handle these types of accounts, and it looks like there are, they can just close up shop and ask that you move to another approved broker.

It all depends on how much they want to reduce costs.
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by exodusNH »

Whakamole wrote: Fri Jan 14, 2022 11:52 am
exodusNH wrote: Fri Jan 14, 2022 11:32 am
invest4 wrote: Fri Jan 14, 2022 9:26 am
prd1982 wrote: Fri Jan 14, 2022 8:28 am Wonder how much they would save by eliminating their mutual fund platform?
This will absolutely happen...just takes time. Personally, I don't really understand why any new investor would seek mutual funds vs ETFs.
401ks and similar plans need a place to put money. Having a single NAV calculated at the end of the day is much easier.

Some people don't like the stock-like nature of ETFs.

Many places don't offer automatic investment into ETFs.

Some places don't offer fractional purchases of ETFs. Mutual funds take exact dollar and cents purchases. This would be less of an issue if the ETFs would do splits to keep the share prices around $100. (Looking at you, VOO!)

People who work in the financial industry have trading restrictions.
Many 401(k) plans use institutional-level share classes or collective investment trusts that are unavailable to the public.

I don't see the rest as keeping Vanguard from moving away from a mutual fund platform (and mutual funds) if they intended to cut costs enough. ETF problems like exact dollar amounts have either been solved (I can do that at Fidelity) or can be solved. Converting mutual fund shares to ETF shares will save Vanguard money. You could even do away with the entire brokerage site at that point if you really wanted to, becoming more like BlackRock.

They're not going to keep the mutual fund only platform up if it's costing them more time and money than it's worth. If there are other brokerages which handle these types of accounts, and it looks like there are, they can just close up shop and ask that you move to another approved broker.

It all depends on how much they want to reduce costs.
I agree with all of that. I was replying to the question of "why would new investors use mutual funds."

I think they should go the Blackrock route. My once concern is that without the pressure from Vanguard's brokerage (as flawed as it may be), we'd see the industry move away from no trading costs on ETFs.
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by Whakamole »

exodusNH wrote: Fri Jan 14, 2022 12:12 pm I agree with all of that. I was replying to the question of "why would new investors use mutual funds."

I think they should go the Blackrock route. My once concern is that without the pressure from Vanguard's brokerage (as flawed as it may be), we'd see the industry move away from no trading costs on ETFs.
Maybe, but other brokerages (TD Ameritrade and Robinhood) were offering no-fee trades before Vanguard.
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by Tamalak »

I'd rather pay an extra measly basis point or two if it means they'll answer the phone..
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by anon_investor »

galawdawg wrote: Fri Jan 14, 2022 11:01 am
Whakamole wrote: Fri Jan 14, 2022 10:45 am
anon_investor wrote: Fri Jan 14, 2022 1:18 am Note to self, buy more VTI at Fidelity. :twisted:
I own Fidelity funds at Fidelity (in tax-deferred) in part to support their good customer service. That their ERs are lower is a nice benefit. If my account was at Schwab, I'd be doing the same there.
I'm at Schwab and that's what I did last year. Divested all of our Vanguard holdings in our tax-advantaged accounts and invested instead in Schwab funds. Still hold a modest Vanguard position in our taxable brokerage account which will gradually be sold off over the next few years.
At Fidelity I have Vanguard ETFs in taxable and Fidelity mutual funds in my HSA.
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CRC_Volunteer
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by CRC_Volunteer »

My take is that various funds will be reducing the amount of money they are contributing to Vanguard (hence the lower ER). Does anyone know what Vanguard’s cash flow from the funds are today?
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jeffyscott
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by jeffyscott »

quietseas wrote: Fri Jan 14, 2022 10:57 am Folks, $1B on maybe a projection of $10T total in assets under management is 1/10,000th or 0.0001%, or 0.01 basis point reduction. So dropping ER from 3 basis point to 2.99 basis point. That's actually not a big reduction and could entirely be covered by a $1B increase in revenue generated by PAS. So they are continuing to transfer customer support costs from the funds business to the brokerage business and making the brokerage business generate revenue to pay its own way. That's my take anyways.
1/10,000 is 0.0001, which is 0.01% or 1 basis point.
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quietseas
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Re: Vanguard to cut $1bn in expense ratios by 2025

Post by quietseas »

jeffyscott wrote: Fri Jan 14, 2022 4:11 pm
quietseas wrote: Fri Jan 14, 2022 10:57 am Folks, $1B on maybe a projection of $10T total in assets under management is 1/10,000th or 0.0001%, or 0.01 basis point reduction. So dropping ER from 3 basis point to 2.99 basis point. That's actually not a big reduction and could entirely be covered by a $1B increase in revenue generated by PAS. So they are continuing to transfer customer support costs from the funds business to the brokerage business and making the brokerage business generate revenue to pay its own way. That's my take anyways.
1/10,000 is 0.0001, which is 0.01% or 1 basis point.
Ooops
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