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11-18-2015, 02:28 PM
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#1
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Thinks s/he gets paid by the post
Join Date: Feb 2012
Location: Northern Ohio
Posts: 3,182
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Cheaper than Vanguard
BlackRock broad-market iShares ETF becoming cheaper than Vanguard's | Reuters
Quote:
Nov 10 BlackRock Inc on Tuesday will announce it is slashing fees on seven of its exchange-traded funds, making one iShares product cheaper than a competing offering from low-cost rival Vanguard Group.
With the drop in annual expenses - from 0.07 percent of assets to 0.03 percent for the iShares Core S&P Total U.S. Stock Market ETF - the sticker price of that $2.8 billion fund will fall below that of the Vanguard Total Stock Market ETF , which is responsible for $58 billion in assets. The Vanguard fund carries a 0.05 percent expense ratio.
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For those looking for the absolute best deal...
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11-18-2015, 02:30 PM
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#2
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Thinks s/he gets paid by the post
Join Date: May 2014
Location: Utrecht
Posts: 2,650
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Competition, good.
Thanks for posting
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11-18-2015, 02:36 PM
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#3
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2004
Location: South Texas~29N/98W Just West of Woman Hollering Creek
Posts: 6,674
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I love to hear that other firms are reducing their ERs below VG. That should be an indicator that VG will be making a move soon. Just sayin...
__________________
Part-Owner of Texas
Outside of a dog, a book is man's best friend. Inside of a dog, it's too dark to read. Groucho Marx
In dire need of: faster horses, younger woman, older whiskey, more money.
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11-18-2015, 04:55 PM
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#4
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Thinks s/he gets paid by the post
Join Date: Aug 2014
Location: Red Rock Country
Posts: 1,932
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While it's nice to have low fees, I'm primarily interested in performance and I'm still not convinced that passively managed funds with the most rock bottom fees will always perform better than actively managed funds that have higher fees.
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11-18-2015, 08:24 PM
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#5
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Thinks s/he gets paid by the post
Join Date: Feb 2012
Location: Northern Ohio
Posts: 3,182
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Quote:
Originally Posted by Ian S
...I'm still not convinced that passively managed funds with the most rock bottom fees will always perform better than actively managed funds that have higher fees.
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Of course not. There will definitely be funds that outperform the index funds. But on average, they don't - especially after fees.
Of course you have to figure out which one will do this in the future. Good luck with that!
(I'm a mostly index fund investor)
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11-18-2015, 08:32 PM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2004
Location: SW Ohio
Posts: 14,404
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Quote:
Originally Posted by mpeirce
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On the mutual fund side, Fidelity Spartan funds can sometimes be cheaper than Vanguard counterparts. I own some, but only because I had to go with Fido for my Solo 401K (Vanguard didn't have them then, they do now). On the whole, I trust Vanguard a bit more to keep their prices low for the long haul, due to their corporate structure and culture. We'll see.
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11-18-2015, 09:05 PM
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#7
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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Free market is good. Fair competition is good. Adam Smith is smiling in his grave.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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11-18-2015, 09:07 PM
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#8
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Thinks s/he gets paid by the post
Join Date: Jun 2010
Posts: 2,301
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Are they actually running their fund cheaper than Vanguard? or are they subsidizing the ER for use as a loss leader/marketing?
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11-18-2015, 09:30 PM
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#9
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Full time employment: Posting here.
Join Date: Apr 2010
Posts: 717
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Quote:
Originally Posted by Ian S
While it's nice to have low fees, I'm primarily interested in performance and I'm still not convinced that passively managed funds with the most rock bottom fees will always perform better than actively managed funds that have higher fees.
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you have a difficult task to cherry pick those...
__________________
“The problem with the world is that the intelligent people are full of doubt, while the stupid people are full of confidence.”
(—Charles Bukowski)
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11-18-2015, 09:34 PM
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#10
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2013
Posts: 11,078
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Follows the long term trend of lower fees. Competition is good for all of us.
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11-18-2015, 09:35 PM
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#11
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2004
Location: SW Ohio
Posts: 14,404
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Quote:
Originally Posted by wanaberetiree
you have a difficult task to cherry pick those...
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Shhhh! There's a whole industry that depends on folks who are sure they can pick a winner.
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11-18-2015, 10:32 PM
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#12
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Thinks s/he gets paid by the post
Join Date: Aug 2014
Location: Red Rock Country
Posts: 1,932
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Quote:
Originally Posted by samclem
Shhhh! There's a whole industry that depends on folks who are sure they can pick a winner.
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Even with an index fund you still have to pick which index you think will be a winner.
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11-18-2015, 10:37 PM
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#13
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Full time employment: Posting here.
Join Date: Apr 2010
Posts: 717
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Well you would pick what you need to have your AA in order.
Sent from my iPad using Early Retirement Forum
__________________
“The problem with the world is that the intelligent people are full of doubt, while the stupid people are full of confidence.”
(—Charles Bukowski)
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11-18-2015, 10:45 PM
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#14
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2004
Location: SW Ohio
Posts: 14,404
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Quote:
Originally Posted by Ian S
Even with an index fund you still have to pick which index you think will be a winner.
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Re: equities--Lots of folks bet on everything (US and Intl), so there's not much "picking" and they can be sure to do as well as the markets as a whole. As far as choosing an asset allocation, that's just setting a mix you are comfortable with and rebalancing back to it. No gurus, low costs.
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11-18-2015, 11:21 PM
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#15
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2005
Location: Chicago
Posts: 13,186
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Quote:
Originally Posted by Ian S
Even with an index fund you still have to pick which index you think will be a winner.
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So true! There are dozens and dozens of indexes. You can choose to keep things very broad with total USA, total world ex-USA, total USA bond, etc. Or you can slice and dice the equity and fixed markets by picking indexes representing subsets of the broad indexes.
Most of my holdings are in index funds. But I have not been able to keep the number of funds to a simple 3 or 4. And some actively managed funds like Wellesley have slipped in too....... Then there's the individual stocks and bonds.
On the subject of expense ratios, once they're below 0.1 or so, I don't worry about it. Of all the things I need to do to optimize my portfolio for highest earnings and lowest taxes, fretting over whether a fund or ETF's ER is 0.07 or 0.05 doesn't rank very high.......
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"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
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11-19-2015, 09:15 AM
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#16
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2005
Posts: 10,252
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Once expense ratios are down into the single basis points then other factors become more important. Those factors include tax-efficiency, tracking error, liquidity (average daily volume), bid/ask spread, commissions (one shouldn't pay commissions), premium/discount to NAV, how NAV is calculated (is it accurate?), reactions to flash crashes, and so on.
I cannot imagine any sane person selling something with e.r. of 0.07% in order to move to something with e.r. 0.03%, but I suppose those folks exist.
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11-19-2015, 09:31 AM
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#17
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2004
Location: SW Ohio
Posts: 14,404
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Quote:
Originally Posted by LOL!
I cannot imagine any sane person selling something with e.r. of 0.07% in order to move to something with e.r. 0.03%, but I suppose those folks exist.
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Well, that's $400 per year on a $1 million portfolio, and you get it for spending 15 minutes online. Given what I see people do in the supermarket checkout lane to save $0.35 on a roll of paper towels, I'd say some folks are probably doing it.
Like you, I probably wouldn't swap funds for an ER difference of .04%, but I do place a premium on making sure it doesn't pop up, as I tend to not watch that stuff closely. So, I wouldn't go for a teaser rate, etc.
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11-19-2015, 10:14 AM
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#18
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2003
Location: Kansas City
Posts: 7,968
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11-19-2015, 10:22 AM
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#19
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Thinks s/he gets paid by the post
Join Date: Jul 2012
Location: Texas
Posts: 3,024
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__________________
Retired at 52 in July 2013. On to better things...
AA: 85/15 WR: 2.7% SI: 2 pensions, SS later
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11-19-2015, 10:44 AM
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#20
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2013
Posts: 11,078
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