Vanguard Paradox

[k12balla]

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It seems like Vanguard is really trying to push hard their actively managed funds. It seems counterintuitive to me, that a company that prides itself on having the lowest fees, and billions of AUM in passive index fund, are now advocating for us to pay for their advice. Granted, they still might be able to offer the cheapest advice around, what is the likelihood that they will outperform the market?

 

[ThoracicGuy]

It seems like Vanguard is really trying to push hard their actively managed funds. It seems counterintuitive to me, that a company that prides itself on having the lowest fees, and billions of AUM in passive index fund, are now advocating for us to pay for their advice. Granted, they still might be able to offer the cheapest advice around, what is the likelihood that they will outperform the market?

Where have you seen Vanguard pushing these funds versus their Index Funds?

 

[k12balla]

I've been getting personal emails, as well as through my employer 401k. Check their website.

 

[ThoracicGuy]

I've been getting personal emails, as well as through my employer 401k. Check their website.

I've been a Vanguard customer for about 20 years now. The only significant managed fund I've seen is the Windsor II Fund. I actually own a bit of it as well as I was put in it by my parents for an IRA years ago. It's done ok for me. I've not seen Vanguard really pushing hard on actively managed funds, though... or any funds for that matter.

 

[SigmaFS]

OP might be referring to their advisor services, which, I believe, is relatively new.

 

[k12balla]

Yes ^^ It's at the top of their website. I believe they're charging 0.3% /year for their services.

 

[Plastikos]

Vanguard is under intense pressure right now legally/federally for distorting and possibly fraudulently abusing price scheme tax law to avoid taxes (conservatively estimated at 35B within the statute of limitations) in order to reduce their expense ratios. This is going to be very interesting and possibly a step back for investors.

 

[ResidentSensei]

It might be hard to believe, but some people actually like the "hands off" approach. I think most of the people here who frequent a "Finance and Investment" forum would scoff at actively managed funds. However, you can imagine there are people who have "heard of Vanguard" and just want to put their money somewhere and "leave it to the experts."

Do I agree with it? No. Do I understand? Sure.

@Plastikos - That certainly will be interesting. Although I hope nothing comes from it. If anything changes... it will almost certainly make things worse for investors.

-Sensei