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Vanguard Fund Comparisons - ERs?
Old 01-17-2013, 06:42 PM   #1
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Vanguard Fund Comparisons - ERs?

When comparing several Vanguard funds on their site, using the Growth of $10,000 chart, the footnote states:

Figures include reinvestment of dividends and capital gains but don't reflect the effect of any sales charges or redemption fees, which would lower them.

It doesn't mention whether or not ERs are taken into account, which may also lower results. Does anyone know if ERs are included? IOW, I'm looking at 3 funds that are very close to each other performance-wise, except that one has an ER almost twice as much as the other two, and I don't know if the chart reflects this, or if it will matter all that much... Thanks.

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Old 01-17-2013, 06:55 PM   #2
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Although I cannot find anything that specifically says ER's are included in performance (didn't spend much time searching) it is my understanding that yes, they are included. Unlike sales charges and redemption fees which are separate, distinct charges and associated only with the purchase and sale of funds, expenses are "baked into" the funds share price and reflected in the funds performance.
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Old 01-17-2013, 09:15 PM   #3
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Quote:
Originally Posted by REWahoo View Post
Although I cannot find anything that specifically says ER's are included in performance (didn't spend much time searching) it is my understanding that yes, they are included. Unlike sales charges and redemption fees which are separate, distinct charges and associated only with the purchase and sale of funds, expenses are "baked into" the funds share price and reflected in the funds performance.
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Old 01-17-2013, 10:10 PM   #4
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All fund performance numbers are reported after expenses. No need to adjust them for ER. Sales charges and redemption fees are dependent on investor behavior, so they can't be reported the same way.
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Old 01-18-2013, 03:26 AM   #5
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Yet, Bogleheads still make it clear that ER should be considered a separate factor. ER is (pretty) consistent and reliable, while returns aren't, and ER will always eat away at returns in precisely the same way (skimming a certain percentage of the whole, generally unrelated to how large the returns are).
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Old 01-18-2013, 01:08 PM   #6
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Yet, Bogleheads still make it clear that ER should be considered a separate factor.
Yes, that's why I'm asking the question. I've never seen any VG funds that have front or back-end loads, so I'm just guessing (I always read prospectuses anyway) either I missed the small few that do, or to help investors in comparing performance to other fund families' products.
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Old 01-18-2013, 09:53 PM   #7
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Yes, that's why I'm asking the question. I've never seen any VG funds that have front or back-end loads, so I'm just guessing (I always read prospectuses anyway) either I missed the small few that do, or to help investors in comparing performance to other fund families' products.
Well, there are a few Vanguard funds that charge redemption fees if you hold them for periods shorter than a month or a few months (depends on the funds). Also, a few of the Vanguard international and other funds levy a small fee (0.5%, perhaps) when you purchase them because of the costs to the fund to buy foreign stocks. Rather than make existing fund holders pay for this, Vanguard figures it's more "fair" to make the buyers of the fund pay the fee.
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Old 01-19-2013, 10:08 PM   #8
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Well, there are a few Vanguard funds that charge redemption fees if you hold them for periods shorter than a month or a few months (depends on the funds). Also, a few of the Vanguard international and other funds levy a small fee (0.5%, perhaps) when you purchase them because of the costs to the fund to buy foreign stocks. Rather than make existing fund holders pay for this, Vanguard figures it's more "fair" to make the buyers of the fund pay the fee.
And I've only found the fees on the foreign funds to be your first purchase. Everytime I buy more VEMAX they don't hit me with their fee. They did the first time though.
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