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Is Any Mutual Fund Company Better Than Vanguard? 1 Comes Close


  • I was thinking you were going to say T Rowe Price. They are great!
  • edited September 2019
    dryflower said:

    I was thinking you were going to say T Rowe Price. They are great!

    No argument from me on that!

    I’m probably rare in that I’ve never owned a Vanguard fund. Our workplace offered (initially) load-based Templeton and than later TRP as 403B options. Since the 90s TRP has managed about 50% of my funds.

    Using custodian-to-custodian transfers some money was moved to others. D&C has about 25% - another highly respected house. The remainder is divided between Invesco ($$ formerly with Oppenheimer) and Permanent Portfolio. Re Oppenheimer / Invesco - I’ll grade them C overall based mostly on higher fees. But they offer some niche funds I use that Price doesn’t.

    Price has always run a first-rate shop. Their problem today, IMHO, is too many funds. Obviously they’re fighting for market share. Geez - 25 years ago I might have named every fund in their stable and told you how it invested. Today that’s hopeless.
  • Any chance that D&C will offer a money market fund?
  • edited September 2019
    carew388 said:

    Any chance that D&C will offer a money market fund?

    Don’t hold your breath waiting. Have seen no indication.

    On that question, not sure what their gig is. Seemingly, being the savvy investors they are, they’d rather folks park cash in DODIX. That bothers me a bit. However, DODIX is quite conservatively run - probably out only about 3 years on the maturity curve at present. I don’t doubt that it will beat any money market fund hands-down over 5 and 10 year periods. But shorter term, has the potential for a couple lousy (negative) years.
  • Unfortunately, selling shares of DODIX to dollar cost average into, say DODBX would generate a taxable gain or loss each time ,since the net asset value of DODIX is not fixed at $1 unlike a Fidelity or Vanguard money market fund. Perhaps this is their way of limiting what they deem to be frequent or excessive trading.
  • dryflower said:

    I was thinking you were going to say T Rowe Price. They are great!

    I second that! I'm surprised it wasn't TRP, to be honest. You won't find a more comprehensive range of funds so well managed at such low fees and available at such minimums. There are a couple of stragglers in their lineup, but that can be said of every fund family.

  • Schwab index funds are cheaper than VG.
    Managed funds:
    It's so easy to find better funds than VG+D&C.
    PRWCX is better than DODBX and most/all other allocation funds.
    PIMIX isn't as good in the last 1-2 years but beat DODIX by a lot for 5-10 years. VG doesn't have Multisetcor funds. Don't fool by DODIX, it's also a light MS fund.
    SPY is better than DODGX. USMV is better than both.
    MFAPX easily beat DODFX for performance and risk attributes
    Pimco bonds funds are better than VG bond funds
    QQQ is better than POGRX.
    Probably, Wellesley is the best VG fund and hard to beat for risk/reward unless you use 2 funds such as USMV+PIMIX.

    Basically, the magic of VG is gone and I was always able to find better funds than D&C.
  • +1 (or DSEEX and PIMIX)
  • FD1000 said:

    Schwab index funds are cheaper than VG.

    Expense ratios are just one part of the equation.

    On the cost side there are tax costs. When you buy an OEF share class of a Vanguard fund you benefit from the fund's ability to dump any cap gains via the fund's ETF share class.

    Vanguard 2018 YE distributions (no cap gains for index funds, except institutional funds that have no ETF class shares)
    Schwab 2018 YE distributions (see p. 3)

    On the revenue side, there's security lending. "Consistent with Vanguard’s client-owned structure, Vanguard returns all net lending revenues—after subtracting program costs, agent fees (on non-U.S. securities), and any broker rebates—to the funds."

    As it turns out, Schwab has a similar policy. But unlike Vanguard, with Schwab would you be confident of that without checking?

    The point is that there is much more going on than is reflected in ERs. Relatively speaking a basis point one way or the other is just noise. How much tracking accuracy will the fund trade off for better pricing? DFA does this so extensively that it says its funds are actively managed, albeit indexed. Full replication vs. sampling; quality of sampling methodology. And so on.
  • I find Vanguard is more and more restrictive and making it harder to do anything other than invest in their funds and ETFs.
  • There are three recent changes at Vanguard that I'm aware of. For the reasons I describe below, I tend to view them as "non-events". Are these what you had in mind, or are there other changes that lead you to feel that Vanguard is making it more difficult to do business with them outside of Vanguard funds/ETFs?

    Vanguard stopped selling explicitly leveraged (2x, 3x, etc.) and inverse ETFs last January. Since those funds almost have to be traded frequently, Vanguard never was a good platform for someone investing in these particular ETFs.

    Vanguard recently terminated its cash management features. Very few of their customers were using these features anyway. One had to be a Voyager Select ($500K+ in Vanguard funds) to even have access to these features. Then Vanguard was still charging customers $30/year unless they had at least $1M invested in Vanguard funds. Little wonder almost no one used these services.

    Vanguard is about to transfer the servicing of the Vanguard Variable Annuity to Transamerica. Your comment has to do with Vanguard making it difficult to buy non-Vanguard funds. Since the VA is made up of Vanguard funds, it's not the kind of investment that you were talking about.

    Those are all the recent changes I know of where Vanguard has made it difficult to invest in certain products or have access to certain services. There certainly can be others, potentially more significant, that you had in mind.
  • The question is Better for what? For ESG investing I can think of several. I can also think of several for any sort of niche investing--international small caps, mortgage bonds, etc. But for the big mainstream stuff Vanguard's hard to beat.
  • How is Wellington Mgmt in terms of proxy voting? As we've discussed elsewhere, Vanguard is handing off some of that to its submanagement companies. With Vanguard Global ESG Select Stock Fund VEIGX, Vanguard is explicitly designating Wellington responsible for proxy voting.
  • edited October 2019
    @msf I know I've looked at this data for Wellington, but can't seem to find it online now. My impression is Wellington's proxy voting record is better if I recall correctly but not perfect. Also, worth noting is the new actively managed VEIGX just holds fewer companies that pass its ESG and other screens than passive ESG funds like Vanguard's VFTSX does, which holds a lot of bad environmental actors. When I look at VEIGX's holdings, the two that concern me the most are the mining company BHP and energy company Total:
    The true test will be seeing how VEIGX votes on shareholder proposals at companies like that, and it will be a wait and see.
  • >> for the big mainstream stuff Vanguard's hard to beat

    for sure, but how can anything be better for such than the 'new' Fido zero-ER offerings?
  • @davidrmoran There are a few questions the Fidelity zero funds raise. Breadth of index coverage.—Sometimes these lowest cost funds hold less stocks because it’s cheaper to execute the strategy that way so you generally lose some small cap coverage. Securities lending costs/benefits—most funds lend their securities out for a fee to hedge funds and the like. Whether they keep a portion of the fee or give it all back to shareholders matters as it can actually enable them to beat their benchmark or match it so it becomes a “zero fee” fund. How good they are at securities lending and how much of it they do—and the risks associated with that—also matter. But the biggest concerns I think with the Fidelity zero index funds are two fold—portability and cash yields. Last I checked, the Fidelity zero funds are only available at Fidelity, so if you want to move to a different broker you’re stuck, which is the goal of the products—sticky customers. Cash yields are also important. The Fidelity zero funds are “loss leaders” so Fido wants to recoup the losses from them with other higher cost products. One of those products is its money market funds, which yield I’m fairly certain less than Vanguard’s so every time you hold cash you’re losing money. All of that said, they’re good products.
  • >> for the big mainstream stuff Vanguard's hard to beat

    for sure, but how can anything be better for such than the 'new' Fido zero-ER offerings?

    Compare Fidelity's two extended market offerings. Their zero-ER one FZIPX and their extended market "classic" FSAMX.

    Here's the M* comparison chart from FZIPX's inception date.

    Fidelity's own comparison chart is a bit less useful, as you can't choose arbitrary timeframes. If you look at this chart, I suggest clicking on the 1 year comparison - that's the longest period within FZIPX's lifetime that the chart will illustrate.

  • msf
    edited October 2019

    One of those products is its money market funds, which yield I’m fairly certain less than Vanguard’s so every time you hold cash you’re losing money. All of that said, they’re good products.

    Fidelity's MMFs yield so much less that if you try to get a few basis points closer to Vanguard, you wind up taking on greater risk and you still fall short. Fidelity's prime fund FZDXX has an SEC yield of 1.81% (as of Oct 10th), vs. Vanguard's government MMFs yielding 1.89% for VMFXX and 1.90 for VUSXX (as of Oct. 10th).

    The key there is that government funds are not gated. Prime funds may freeze your cash at the worst possible moment.

    Aside from the gating risk, FZDXX has a higher min ($100K in a taxable account). To get its yield as high as it is, Fidelity is waiving some expenses. That presents two additional risks: termination of the waiver by the Board, and claw backs that impede the ER from dropping.

    For completeness, SPAXX (Fidelity government fund) currently yields 1.57%, and VMRXX (Vanguard prime fund) currently yields 2.03%.

    For day-to-day checking account-like services, the yield you get with Fidelity is great. I use it that way. But for sizeable liquid cash holdings, Fidelity's not the place to be. Vanguard for MMFs, internet banks for FDIC-insured superior yields.

  • $50 underperformance over these last 13mos is striking; what could account for it? (My pondering was 'how', and there clearly is an answer somewhere, perhaps in LB's speculations.)

    FSAMX also beats VEXMX, by $11, for that span, all this for $10k, while VEXAX comes out a hair ahead, and is the winner. Again.
    4* though, and even worse per Lipper. Huh.
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