mickeyd
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
A recent study was done on the actual cost that Vanguard mutual fund investors are charged for commissions. The summary below pretty much clears it all up. In addition to super low expense ratios, the amount paid on commissions is also low.
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Our examination of Vanguard brokerage commission expense has demonstrated that Vanguard fund managers, in the aggregate, have produced lower than average commission costs then their peers. Investors in all management styles: active, passive, tax-managed, and variable annuity, have accrued these cost savings in addition to the already low expense ratio costs of the funds. We find that passive management consistently provides the lowest commission costs. Although one year's data is not a valid holding period for drawing definitive conclusions, we find that, at least in 2003, Vanguard shareholders; churned their fund and variable annuity holdings at below average rates.
Finally, the supplemental ratio, based as it is on quantified costs, provides a more thorough assessment of the costs a fund manager must recover, either through transactional efficiency or investment prowess, to match or exceed market returns. As such, the measure provides investors with useful information.
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Our examination of Vanguard brokerage commission expense has demonstrated that Vanguard fund managers, in the aggregate, have produced lower than average commission costs then their peers. Investors in all management styles: active, passive, tax-managed, and variable annuity, have accrued these cost savings in addition to the already low expense ratio costs of the funds. We find that passive management consistently provides the lowest commission costs. Although one year's data is not a valid holding period for drawing definitive conclusions, we find that, at least in 2003, Vanguard shareholders; churned their fund and variable annuity holdings at below average rates.
Finally, the supplemental ratio, based as it is on quantified costs, provides a more thorough assessment of the costs a fund manager must recover, either through transactional efficiency or investment prowess, to match or exceed market returns. As such, the measure provides investors with useful information.
