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Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

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Opinion: How fund giant Vanguard is misleading investors about a tax on stock trades

https://www.marketwatch.com/story/how-fund-giant-vanguard-is-misleading-investors-about-a-proposed-tax-on-stock-trades-2020-01-16

Opinion: How fund giant Vanguard is misleading investors about a tax on stock trades


_financial-transaction tax would not harm Main Street investors, as Vanguard contends_

Be very careful out there and sometimes very helpful to read between fine prints

Comments

  • A good opinion piece/commentary. It's hard to believe that the small tax as proposed would have the huge scary impact. Somebody needs to come up with a lot more detail.
    David
  • Usually when Vanguard shows returns from a high turnover actively managed fund, it does so to show how much better off one would be with one of its low cost, low turnover funds (whether actively or passively managed). Here it is doing somewhat the opposite.

    Rather than suggesting that people use lower turnover funds, Vanguard is implying that it's okay to pay a lot in trading costs because of high turnover. Just let's not make it worse by taxing that.

    After decades, investors are finally getting wise to the explicit costs of funds (as represented by ERs) and moving toward lower cost funds. Perhaps with a higher transaction tax in place (there's already a small fee assessed on sales), trading costs will become more visible and people will gravitate toward lower turnover funds.

    If so, this tax could turn out to actually benefit Main Street investors.
  • Not defending Vanguard here, but this is an opinionpiece after all.
  • Sven said:

    Not defending Vanguard here, but this is an opinionpiece after all.

    I'm with you.

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