New Vanguard active management

[cbo111]

Anybody get the email for this new Vanguard service for PAS clients?
"Your new active equity offer is here
We’re pleased to announce that you now have access to an expanded active equity lineup, exclusive to Personal Advisor clients. If you have an appetite for more active exposure, here’s another way to further customize your portfolio. At a future appointment, your advisor will discuss if active is right for you."

Here is expanded information when you click the link.
We’re pleased to announce that you now have access to an expanded active equity lineup that consists of 3 new mutual funds and 2 existing products—Vanguard Capital Opportunity Fund and Vanguard International Core Stock Fund.

Designed to meet the evolving needs and preferences of investors looking for more active within their portfolio, the new offer provides broad global active equity exposure and the potential for enhanced long-term performance.

[catii]

Got it, & tossed it. More active exposure = churning. I'm satisfied handling my own trading.

[Markola]

.43 and .46 ER ratios, respectively. Looks like they can’t afford to offer what actually works: Low Fee passive index funds. Sad.

[target2019]

John Bogle knows the course is changing.

[Helen]

Quote:

Originally Posted by target2019 John Bogle knows the course is changing.

What do you mean?

[target2019]

Quote:

Originally Posted by Helen What do you mean?

John Bogle frequently used the phrase, "Stay the Course," and wrote a book with that title.

[VanWinkle]

Quote:

Originally Posted by Markola .43 and .46 ER ratios, respectively. Looks like they can’t afford to offer what actually works: Low Fee passive index funds. Sad.

I agree with the passive fund portfolio, but some people can't see the value in matching the market. For them, Edward Jones(Slick Eddie) and other very high cost, fund churning, "buy your advisor a yacht" type advisory brokers are the often chosen answer. This might give them a reasonable alternative with lower cost funds and lower AUM fees. I could see some value in it for those certain people that believe active is the only way to beat the market.

VW

[OldShooter]

IMO this is simply a revenue-raiser for VG. Just another example of how these brokers are trying to fix up the income line after losing trading fees.

[Markola]

Quote:

Originally Posted by VanWinkle I agree with the passive fund portfolio, but some people can't see the value in matching the market. For them, Edward Jones(Slick Eddie) and other very high cost, fund churning, "buy your advisor a yacht" type advisory brokers are the often chosen answer. This might give them a reasonable alternative with lower cost funds and lower AUM fees. I could see some value in it for those certain people that believe active is the only way to beat the market. VW

They might believe it but extensive analysis of the history of active funds shows they’d be wrong, barring a lucky miracle.

[OldShooter]

Quote:

Originally Posted by Markola They might believe it but extensive analysis of the history of active funds shows they’d be wrong, barring a lucky miracle.

Sure, but there is an entire multi-billion dollar industry devoted to convincing people of two myths:

1: There are people with investment skills that enable them to consistently beat the stock market’s average performance.

2: It is possible to identify such people in advance and it is possible for retail investors to hire them.

[RetiredAt55.5]

It does beg a question - why limit this to only 5 active funds?

This seems like a bad idea and a slippery slope.

[aja8888]

Quote:

Originally Posted by RetiredAt55.5 It does beg a question - why limit this to only 5 active funds? This seems like a bad idea and a slippery slope.

Vanguard is probably still creating more new funds with even higher fees for the next round of mailings. This is a test run.

[Koolau]

Speaking of JB. He's probably turning over in his grave. Maybe good he can't see what's been happening to VG. GOOD news is we don't have to play along. YMMV

[FindingForward]

They likely need some active fund revenue to stay alive in the "race to zero" index fund war they're in against Schwab, Fidelity and the rest. Personally, as a passive fund investor who still has that choice at Vanguard, I actually hope they get some decent response to their PAS and active fund marketing.

Maybe they'll earn enough profit to prioritize some much-overdue fixes to their IT & operational issues.

[Markola]

I heard a Bogleheads on Investing podcast (Rick Ferri host) episode exploring an apparent Vanguard foray on the horizon into a private equity component for their Target Date funds (! [emoji43]*[emoji94]). Ferri said he sees no reason that Vanguard has any particular advantage in evaluating private equity offerings well enough to overcome its high fees and that you can get about the same returns with the VG small cap value index.

[Which Roger]

Quote:

Originally Posted by VanWinkle I agree with the passive fund portfolio, but some people can't see the value in matching the market. For them, Edward Jones(Slick Eddie) and other very high cost, fund churning, "buy your advisor a yacht" type advisory brokers are the often chosen answer. This might give them a reasonable alternative with lower cost funds and lower AUM fees. I could see some value in it for those certain people that believe active is the only way to beat the market. VW

I'm as passive as they come, but I agree that for anyone who is stubbornly sticking to active investing, what Vanguard is offering is preferable to the super-high-cost-and-churn options such as you describe above.
Also, it really depends on how Vanguard markets this. If they push the active funds too hard, and de-emphasize what made them attractive in the first place, then shame on them. But if they offer the active management as just another option for those who really want it, then I don't see a problem.

[USGrant1962]

Vanguard has lots of active funds. I'm not sure why any of these new ones would be preferable to Wellington, Wellesley, the global versions of same, or the PRIMECAP lineup (though some the later are closed).

[easysurfer]

Quote:

Originally Posted by Koolau Speaking of JB. He's probably turning over in his grave. Maybe good he can't see what's been happening to VG. GOOD news is we don't have to play along. YMMV

+1

Beware of them Heelots.