Vanguard Active Funds

Discussion in 'Shares & Funds' started by dunno, 11th Sep, 2019.

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  1. dunno

    dunno Well-Known Member

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  2. Nodrog

    Nodrog Well-Known Member

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    Any going on your watch list:)?
     
  3. Pleep

    Pleep Well-Known Member

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    With the rise of passive investing I am wondering a few badly formed whole-of-market theories:

    1. When passive is a huge share of the market, say 65%, then the remaining active or director holders with smaller share will actually have more influence. That is 35% will be setting the market and then a huge wave of indexing follows them. Won't this create more volatility than in the past where you had 100% active folks all smoothing each other out a bit. Now 35% calling the shots?

    2. If smart beta type funds take a large proportion, then they can influence asset prices as there are less active managers out there, and that'll draw indexers to follow the smart beta investments making them go up - therefore smart beta winning at the cost of indexers even if they were not actually the best stocks....
     
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  4. Pleep

    Pleep Well-Known Member

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    Does Vanguard have any history of being a good active manager? They'll draw funds in due to people thinking "Vanguard? oh it must be as good/safe as an index fund then".
    Who are the humans behind their active funds???
     
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  5. sfdoddsy

    sfdoddsy Well-Known Member

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    I think the theory is no-one really has history of being great active managers. But in some areas active might either be perceived to be better, or (who knows) actually better.

    And by undercutting the fees of traditional active managers, if you are that way inclined it makes sense.

    Plus Vanguard has a bunch of active funds already, like VVLU.

    My eyebrow is more raised by the funds they are promoting, especially the Growth one.

    At this stage of the cycle, active managers are justifying themselves by saying 'wait until there is downturn, then you'll see our value'.

    Given their past history this seems dubious.

    But a growth fund seems rather optimistic to me.

    A Vanguard Defensive Fund comprising a blend of their Infrastructure, REIT, Value and Minimum Volatility funds would be interesting.
     
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  6. Nodrog

    Nodrog Well-Known Member

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  7. Nodrog

    Nodrog Well-Known Member

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    Hey @dunno,

    With a foot in both camps what do you think the odds are of these particular active Mgrs beating the index? In theory despite talent, costs, patience the odds are still stacked against them if one has a belief in the theory behind indexing.

    Then again, as seen on the video you posted today featuring Aswath perhaps given the right circumstances just maybe?
     
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  8. Pleep

    Pleep Well-Known Member

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  9. dunno

    dunno Well-Known Member

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    They don’t look like bad additions to the active world. It brings some nice expense ratio pressure to that universe. The +/- performance fee seems a bit gimmicky but its interesting.

    It won’t surprise you that the growth fund is zero interest to me at the moment.

    The active emerging markets is a bit more interesting. I would put it a bit in the QVE camp, A reasonable price, reasonably logical field to be active in, sensible managers. If you wanted to have an emerging exposure it would be worth considering up against the broader passive options that are going to hold everything. Not personally something I’m looking to hold but I will probably keep observing and thinking about it.
     
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  10. Nodrog

    Nodrog Well-Known Member

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    Funny out of these despite my dislike of EM the Wellington EM Fund was the only one that looked somewhat attractive. Damn side cheaper fee than my holding in PMC with their Asia tilt. Although likely a false sense of security given my distrust of China, PMC being a “Global” Fund albeit with a strong tilt to Asia unlike an index ETF can choose to exit their Chinese exposure.

    Not something I’ll be acting on certainly not at this stage until more is known. Besides I never invest in unlisted product for a start.