ETF Vanguard Global Value Equity Active ETF (VVLU)

Discussion in 'Shares & Funds' started by Nodrog, 29th Sep, 2018.

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  1. Zenith Chaos

    Zenith Chaos Well-Known Member

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    I read that Vanguard report as only VVLU lost AMIT, while VAS, VGS et al did not.
     
  2. Nodrog

    Nodrog Well-Known Member

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    It was the reference to “multiclass” that has me confused? Might have to ring them but the guys you talk to often know less than forum members here! So perhaps an email might be better.
     
  3. dunno

    dunno Well-Known Member

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    The two active funds no longer qualify for AMIT as either the fund or ETF. Some of the Funds/ETF that are multi class (for example VGAD) have converted their accounting to AMIT, others havent converted so there must be an unresolved question mark over their qualification status still. Multi class doesn't seem to be the sole determining factor though. VAS and VGS are in the question mark group with the accounting not yet converted.
    I don't know anything about AMIT qualification so no idea what the problem may be.
     
  4. Nodrog

    Nodrog Well-Known Member

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    All a bit of a mystery.

    In theory a stand alone ETF would more easily qualify for AMIT it would appear. Then again I always thought a stand alone ETF shouldn’t need AMIT in the first place yet STW use it?

    LICs are beginning to look simple in comparison:).
     
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  5. SatayKing

    SatayKing Well-Known Member

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  6. Nodrog

    Nodrog Well-Known Member

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    Just got off the phone from Vanguard.

    As @dunno said one of the issues is that the underlying active wholesale funds are non-Amit compliant so any ETF as a unit class above that is same.

    The guy I spoke to is going to have someone with more detailed knowledge email me about the reasons.

    Other ETFs such as VAS / VGS are fine as the wholesale unlisted funds are AMIT compliant.

    Apparently he thinks the size of the fund and number of investors may even play a role in choosing to become AMIT compliant? The likes of VVLU is quite small in FUM and number of investors at this time.

    Had a long chat about a number of different things.

    I asked about VVLU being slow to take off and does Vanguard consider closing funds if there is limited interest overtime. There was in-depth discussion about a more problematic product where despite a large investor leaving the fund they remain committed to it regardless of size of FUM. To sum up given the amount of product research that Vanguard does before releasing new funds the likelihood of closing a fund would be very unlikely. VVLU was Developed to be very strong on the value factor and is a fund both here and globally that they are committed to. I think he said to date no Australian Vanguard Fund has been closed so it’s not something that they would want to do. But of course one can never say never.

    I also raised the issue of hedging messing with income distributions / tax and that IFRA ETF has elected to use TOFA so distributions are consistent and more in line with the ETF yield. I know there has been endless complaints from investors to Vanguard in relation to hedged product about the distribution issue. Apparently Vanguard have been actively investigating a number of strategies including TOFA to see if this issue could be significantly improved. But any decision would need to consider if it can be done cost effectively etc.
     
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  7. Zenith Chaos

    Zenith Chaos Well-Known Member

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    Who would be interested in a product that is an ETF index proxy, but doesn't have the disadvantages of an ETF such as AMIT and inconsistent dividends? It would be exactly like a LIC but stock picking would be algorithmic to stick as closely as possible with the index whilst having rules about the size / number of trades to maintain LIC status. Creating it as a LIT structure may also be a good idea.
     
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  8. Nodrog

    Nodrog Well-Known Member

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    I think the recent reduction in your consumption of wine is causing you to have strange thoughts:).
     
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  9. Ouga

    Ouga Well-Known Member

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    Thank you so much @Nodrog for looking into this and sharing the feedback you got from Vanguard, it is greatly appreciated.
     
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  10. Nodrog

    Nodrog Well-Known Member

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    @dunno and others interested, Vanguard got back to me about AMIT. It looks like potentially good news once the likes of VVLU hopefully grows over time:
     
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  11. dunno

    dunno Well-Known Member

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    Thankyou Mr @Nodrog. I have learnt something, Yay I'm not as dumb as I was yesterday, nope, wait there, scratch that, I've forgotten at least two things today..... The down hill slide continues.
     
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  12. Nodrog

    Nodrog Well-Known Member

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    He he. Well it’s very rare I’m able to provide some information that you don’t already know. So the knowledge score is @Nodrog = 1, @dunno = 100,000 plus.
     
  13. Zenith Chaos

    Zenith Chaos Well-Known Member

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    Awfully arbitrary rule. Why not 23, at least that's prime. At least that is good news, I thought it's AMIT status was related to turnover rather than age.