Managed Funds Vanguard

Discussion in 'Shares & Funds' started by Redwing, 23rd Feb, 2017.

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  1. Nodrog

    Nodrog Well-Known Member

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    Yes the EM (or even VAE if Asia preferred) bit is easy. But I was more interested in having control over allocation between US and Other Developed.
     
  2. oracle

    oracle Well-Known Member

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    Did an interesting exercise today about VAS ETF

    VAS ETF debuted on ASX around May 2009

    On 31st Dec 2009 number of outstanding units for VAS were 1,240,932 (see announcement here). On 31st Dec 2017 just eight years later number of outstanding units for VAS were 34,172,080 (see announcement here). That is a compounded annual growth of 51.35% .

    When it debuted the fees for VAS were 0.27% (see announcement here) and today it's 0.14%. So in 8 years the fees have come down 48%. I fully expect in the next eight years we will be paying fees lower than current 0.14% as the size of VAS ETF increases.

    Just thought I would share my findings :)

    Cheers,
    Oracle.
     
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  3. Nodrog

    Nodrog Well-Known Member

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    The man on a mission to future proof financial advice
     
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  4. SatayKing

    SatayKing Well-Known Member

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    Very interesting comments there @Nodrog.

    An out there thought. If everyone goes index, who is buying individual shares to cause any price and valuation movements?

    Should have a Four Pillars or three. Then I'd make sense even to myself.
     
  5. sash

    sash Well-Known Member

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    Very interesting reading...if this takes up in Australia..it is going to wipe out the dodgy advisors....

    No wonder people like scandal prone CBA wealth...and others are getting out.....about time.

    I personally believe...most Financial Planners are pretty useless.
     
  6. Hodor

    Hodor Well-Known Member

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    In a discussion with Malkiel and someone else they discussed the point at which markets would begin to breakdown due to the weight of funds in indexes, I think it was 80-90% of FUM in their opinion (which is likely heavily researched).

    Vanguard is capturing 90% and others provide further index funds, so it would appear we are heading towards this point. Then there is the effect and dilution of smart Beta to the Vanguard inflows (not all Vanguard funds are pure index plays).
     
  7. Nodrog

    Nodrog Well-Known Member

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    He he. I won’t be selling our LICs anytime soon. But we do own a little index product. Just keeping the indexers happy with these stories.

    Short term performance chasing desired by many combined with fear and greed will ensure actives continue to survive although likely less in number. A strong bull market especially in the US works in favour of indexing popularity.

    I just wish indexing would reduce the popularity of the better LICs here. One of the wonderful advantages of LICs is their structure which results in NTA discount / premium. As an income investor I’d love to see some of the LIC investors flock to indexing thereby creating excellent LIC discount opportunities. Then unlike the index funds I can get my future income streams at a great discount. Then it will be more like the good old days before LICs became more widely known and significantly more popular. Remember those days @SatayKing:).

    So spread the word, indexing is good and LICs are crap;).

    There you go @SatayKing no need for the Four Pillars, it all makes sense:D. You’ll have to find another excuse:).
     
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  8. Redwing

    Redwing Well-Known Member

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    Speaking of 4 pillars, an excerpt from the book on the drag of fees
     

    Attached Files:

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  9. Nodrog

    Nodrog Well-Known Member

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    G&T much more enjoyable than that 4 Pillars:).
     
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  10. Nodrog

    Nodrog Well-Known Member

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  11. Redwing

    Redwing Well-Known Member

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    The Endowment funds are also tax exempt as Non-Profits

    These US College funds are huge

    Currently, Harvard University boasts the largest endowment, at $37.6 billion – more than neighboring state Vermont’s entire annual GDP.

    Harvard, however, is not alone in having a hefty endowment. Fellow private universities Yale, Stanford and Princeton all have more than $20 billion each, as does the public University of Texas. The 10 biggest endowments combined were worth more than $183 billion in 2016, about a third of the total

    Universities Seek to Defend Endowments From Republican Tax Plan
     
  12. The Falcon

    The Falcon Well-Known Member

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  13. Nodrog

    Nodrog Well-Known Member

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  14. Redwing

    Redwing Well-Known Member

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    I see Vanguard has released 2 new ethically & socially conscious funds

    VESG and VEFI

    Vanguard Australia has announced the launch of a range of Environmental, Social and Governance (ESG) funds, providing greater choice for investors who wish to reflect their values in their investment holdings.

    The Vanguard Ethically Conscious International Shares Index Fund and Vanguard Ethically Conscious Global Aggregate Bond Index Fund will offer investors access to broadly diversified international equities and international fixed income exposures that exclude fossil fuel reserves, alcohol, tobacco, gambling, weapons, nuclear power and adult entertainment. The new funds will also be offered as exchange traded funds (ETFs) from September 2018.

    The Vanguard Ethically Conscious International Shares Index Fund and ETF (ASX:VESG) will provide exposure to over 1,600 securities listed in major developed countries, at a low management expense ratio of 0.20 per cent and 0.18 per cent respectively.

    The Vanguard Ethically Conscious Global Aggregate Bond Index Fund (Hedged) and the ETF (ASX:VEFI) include exposure to over 18,000 fixed income securities in major developed and emerging countries, and will be available at 0.28 per cent for the managed fund, and 0.26 per cent for the ETF.

    upload_2018-9-2_13-11-17.png
     
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  15. qak

    qak Well-Known Member

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    I'm sure I have seen a discussion of whether to invest in the ETF or managed fund versions of Vanguard index funds, but can't find it here. I do understand that the managed funds invest in the ETFs, ie it is the same underlying investment.

    I'm concerned about the potential buy/sell spread with ETFs traded on market in comparison to the wholesale managed fund (MF) option. Does anyone have a view on this they could share? Or any other pros/cons of either option? The management fee is 0.02% higher with the MF, and the spread is +/- 0.11%.

    This is intended to be a long-term investment, with reinvestment of income.

    Edit - I would be aiming for rebalancing periodically - say annually; and my concern about the ETF spreads is really in a falling market - I'm not clear what a market maker may do in that situation? The funds I'm looking at are the Aust Shares, Global Equity Value & Growth index ones.
     
    Last edited: 13th Sep, 2018
  16. Gormy

    Gormy Member

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    I am interested in VHY as an income play for the very long term although I realize it has underperformed the ASX 200.
    VHY's dividends and share price performance is about that of the banks with the advantage of being more diversified. I know some here are not keen on VHY and would be interested in the reasons why.
     
  17. Zenith Chaos

    Zenith Chaos Well-Known Member

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    The dividend trap built into a trading algorithm.
     
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  18. Hodor

    Hodor Well-Known Member

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    Problem with the turnover associated is that any capital gains are realised when they rebalance, tax needs to be paid and you get lumpy distributions and the underlying asset base doesn't grow
     
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  19. Redwing

    Redwing Well-Known Member

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    VAS vs VHY



    upload_2018-9-17_7-49-10.png
    upload_2018-9-17_7-49-43.png

    VAS and VHY are both low cost Australian share ETFs, with VAS available for 0.14% pa and VHY 0.25% per annum. The most recent investment cycle has shown periods of outperformance of both options, with 7 year performance roughly the same. For those looking for yield, VHY generally does provide higher distributions than VAS, however part of these distributions tend to be realised capital gains due to the portfolio's higher turnover.
     
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  20. Hodor

    Hodor Well-Known Member

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    It's my belief that VHY got off to a flyer due to favorable market conditions. Over a full cycle I expect it to underperform and add a tax burden to that.