Vanguard Mutual Fund Family

Jan 2, 2007 2:51 PM

runner26 :

There is not a lot of history on VWO due to newness. Looking at Morningstar, the 1 year total return as of 11-30-06 for VWO was 32.02% and for VEIEX it was listed as 29.39 as you said.

VEIEX also has a .5% purchase and .5% redemption fee, which is paid to the fund, so it is not called a load. I wonder if this is figured in somehow and if it accounts for the big difference. If not, then the VWO looks that much more attractive. I will be interested in other responses, as I own VEIEX.

Mar 1, 2007 3:54 PM

runner26 :

Mar 1, 4:18 PM (ET)
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VALLEY FORGE, Pa. (AP) - A computer network outage at The Vanguard Group, which manages $1.1 trillion in mutual fund assets, temporarily left customers unable to access online accounts Thursday afternoon.
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The glitch blocked customers from using Vanguard's Web site to place trades or check 401(k)s and other accounts in the wake of Tuesday's big sell-off on Wall Street.
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Vanguard spokesman John Woerth said the outage lasted about an hour. It did not prevent customers from registering trades by calling Vanguard's toll-free number; if they did so they would have been guaranteed a fund's 4 p.m. price, Woerth said. Mutual funds are priced once a day.
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Computer woes have saddled other systems in this busy trading week.
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High volume delayed the processing of trades at the New York Stock Exchange, the Nasdaq Stock Market and major brokerages. In the heat of Tuesday's session, trade data had to be shifted from a backlogged computer at Dow Jones & Co. (DJ) to another system, and when it caught up the Dow industrials dropped 178 points in a minute.

May 11, 2007 7:17 AM

runner26 :

Old structure, there is a $10 fees for four different types of minimums.
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The new fee is simply $20 annually for EACH Vanguard fund with a balance less than $10,000. Vanguard will assess the account service fee in June.
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Most of you can easily avoid the account service fee by meeting any one of the following three conditions:
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1. Sign up for electronic delivery of shareholder statements, confirmations, prospectuses and fund reports. They will still send year-end statements by U.S. mail if requested.
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2. Consolidate your accounts to meet the $10,000 requirement.
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3. Maintain total Vanguard mutual fund assets of $100,000 or more.
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The fee does not apply to money market sweep accounts held through Vanguard Brokerage Services, accounts held in employer-sponsored retirement plans, accounts held in 529 plans or accounts held through financial intermediaries.

May 11, 2007 8:34 AM

runner26 :

Vanguard has moved over the years to favor larger clients. I noticed a big change in my customer service when I became a Voyager client. There seem to be more informed and attentive staff at the end of the Voyager number.
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I suspect in a few years when I get more consolidations done and become a Flagship client, that I will experience another leap in that service, along with free trades and other services.

May 11, 2007 8:49 AM

allancoleman :

Schwab has had the same process underway for years now too . Their minimums have increased too . I no longer advise new investors in Anchorage , Alaska to go down and open a Schwab account in our local Schwab office because most don't have enough to escape these increased fees .

I always select " paper " statements too , Capt. I wonder how long that option will continue to be offered or how long it'll be before we have to pay extra for that service . ? ?

Think the " Flagship " status will mean that I'll have the sun on my face or the wind on my bald head , runner26 , instead of pulling these oars below decks now . Would be nice to be up closer to the helm above decks to see where the ship is going . :)

Jul 12, 2007 7:12 AM

William Marshal :

Bah. Bah, I say!

I was paying no fees...now I am subject to fees on 2 accounts. Effectively, that more than quadruples the expense ratios on those accounts...so much for the "low cost advantage".

The loopholes?

1. Temporarily at least. Remember the advent of ATMs? The banks badly wanted us to use them because they were cheaper than tellers. Now? There are fees for using ATMs, because "they're so expensive". I suspect that fees are coming for e-delivery accounts, too. Then there will be no place to run.

2. Hello, taxable event. Nice.

3. They expect the law of demand to work in reverse? That raising price will RAISE quantity demanded and make people want to invest MORE money with them?!

Color me disgruntled.

Jul 13, 2007 10:49 AM

tjg911 :

Well I just finished reading a rather disturbing thread at the "Morningstar Vanguard Diehards" forum. You can read for free but have to pay I think $5 to join and post, I have not joined.
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The thread I was reading was called "Vanguard Customer Service", it is thread # 56987, dated 2/1/07 at 10:11PM. This is a link to that thread http://socialize.morningstar.com/NewSocialize/asp/FullConv.asp?forumId=F100 000015&convId=193771 but if that doesn't get you there the website is http://socialize.morningstar.com/NewSocialize/asp/AllConv.asp?forumId=F100 000015 and if you type the thread # into the "JUMP TO" box you should go to the thread.
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The jist of the 44 comments to the original poster's question about Vanguard's customer service was surprising negative! This included Voyager and Flagship accounts. Most thought Fidelity service was far superior. I am totally disgusted with Fidelity's handling of my 401k, health care and now the personal department that my company has farmed out to Fidelity to save money. My phone and internet dealings with Vanguard (Flagship) accounts (Roth IRA and taxable) have been positive and I intended to roll over my 401k from the custodian Fidelity to Vanguard. Now I am concerned. While I like Vanguard's index fund choices, low expenses and website layout, I am concerned about the horrid customer service I was reading about. I'd guess it was 60/40 perhaps 70/30 bad experiences/good experiences!
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I read here about runner26's unhappy dealings with getting his 401k rollover into the Vanguard GNMA fund. While I dismissed it as bad luck for runner26, I now wonder? I am retiring on August 3 of this year and wanted to get 1/2 my 401k into the Vanguard GNMA fund ASAP at a time that the fund is experiencing very good nav for purchase.
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I included the info above so that if anyone wants to read this they can, should take about 15-20 minutes. So I am wondering if people here have had bad customer service with Vanguard?
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It would actually be a lot easier to roll the 401k into a Fidelity IRA since they are the custodian right now. Also Fidelity has an office here in my state about 30 minutes from home vs Vanguard's phone only communication but I did not view this as a big deal but again now I wonder. Fidelity does not have all the same funds as I wanted at Vanguard, some do have expense ratios 1/2 of Vanguard's but other Fidelity funds have expense ratios double what they are at Vanguard. I do not want to split the IRA, I want it all

Jul 13, 2007 11:03 AM

tjg911 :

Kirk,

I thought Fidelity was much bigger than Vanguard? Using that logic of higher numbers/volume, it would make sense that the higher volume provider would have more happy and more unhappy people due to volume also considering on any given day who is repling and what their feelings are. I also think people that are unhappy (rightfully or not) complain more than those that are happy will compliment.

So who has more customers, Fidelity or Vanguard?

I think you hit the nail on the head with your other 2 observations! :)

Tom

Jul 13, 2007 11:40 AM

runner26 :

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For what it's worth Tom, Vanguard staff did straighten out my account with all effective dates as if they had processed the transaction correctly from the start.
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Also, to put the matter straight, I eventually found my form that I had sent in and I had entered the wrong account number, though they should have caught it, I accept the blame as having caused my issue in the first place.
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I think the most of the complaints about Vanguard service are related to their brokerage side of the business. They got the lowest ratings of the survey about brokerage I pointed to in this post:
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http://investment.suite101.com/discussion.cfm/7240/948-957#message_957

Jul 13, 2007 1:33 PM

allancoleman :

After reading the comments here about Vanguard , my vote is still for Vanguard . However , Fidelity handled my Roth transfer to Vanguard so professionally , that I would not hesitate to go back to Fidelity in the future .

Schwab is another story . After switching to their new AMT money market fund in person at their local office last month , my statement I received in the mail today showed a margin loan and margin interest that I've never had before . Just came from the local Schwab office and wasn't satisified with the answer I got so I switched back to the old tax free municipal money market fund I had in the past and got them to erase my margin loan and margin interest charged . If future statements aren't straight , I won't hesitate to go back down and talk to them in person again .

Once again , I have yet to have to talk to Vanguard or email them about anything and have handled all business with them totally on line and would advise others to try them . Mark me down as a totally happy Vanguard customer . :)

Jul 13, 2007 1:45 PM

runner26 :

The Bogle book I am reading says as of Jan. 1, 2004 Fido has $527 billion and Vanguard has $415 billion in assets under management.
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Of the Fido pot, 83% is invested in mutual funds.
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Of the Vanguard pot, 97% is invested in mutual funds.
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The large Vanguard % in funds probably explains their lack of effort with regard to brokerage services.

Jul 15, 2007 7:44 AM

William Marshal :

Yes, they are saying that...and we should just take their word for it. Of course.

Actually, what they told me was that they were changing the fees to pay for "postage". How much postage do you think $20 will buy?

See, they did not say "We just want to make more money". They said it's to defray a specific cost. Which is...dubious.

They can of course do this...but they face the same laws of supply and demand as everyone else. Raising price means lower quantity demanded. Meaning lower economies of scale. Meaning a lesser competitive advantage...

Sigh. I have other funds where I pay no fees...guaranteed for life. I guess I must vote with my feet. Alas.

Jul 15, 2007 1:04 PM

Happy_2 :

I bet if they had Union garbage collectors from Oakland CA (now on strike) do the work, it would cost them $50 a year!
Please, when you are making 100+K you are not a garbage collector. You are a Solid Waste Recycler.

Jul 15, 2007 5:53 PM

runner26 :

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Looks like there are more Happy Feet...
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Index Fund Flows Rise
By Matthew Hougan - Monday, 09 July 2007
The latest report from the Financial Research Corporation (FRC)[LLB1] shows that fund flows into index funds (including exchange-traded funds) rose sharply in 2007. Over the first five months of the year, index funds gathered 26% of all long-term fund flows, compared with just 20% during the year-ago period.
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The move helped boost <b>Vanguard to the top of the heap in terms of net inflows.</b> Vanguard gathered $39.5 billion in new assets, up 85% from year-ago levels. American Funds came in a close second with $38.8 billion in new flows. Fidelity, the largest mutual fund manager, pulled in just $4.9 billion for the period.
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Vanguard flows have been boosted by its reinvigorated ETF platform, which have been pulling in assets by the billion.

Jul 16, 2007 10:15 AM

tjg911 :

Oh, I just can't believe the incompetence of fidelity (and I am purposely NOT capitalizing their name out of disgust).
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I have tried at least this entire year if not dating back into last year to get fidelity (hence forth referred to as dog-s - use your imagination) to STOP mailing me statements when I move funds within my 401k. I've had nothing but trouble in every other aspect of dealing with dog-s relative to my 401k since they became the custodian in 1/2006 and now they've taken over our personnel department but this complaint is just about the mailing issue nothing else.
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I have setup my profile online telling dog-s to email me, NOT TO MAIL ME, notification when I move funds in my 401k but they don't email me and they continue to mail me. dog-s continues to send statements detailing my entire 401k value thru the US Post Office mail. I live in a rural area and for whatever reason the mail is not sorted well. I get other peoples' mail and they sometimes get mine. I have gotten my mail put into my mailbox that has been already opened. When you have mail, do you check to see if it is really your mail or do you assume (like most everyone does myself included) that it IS your mail and open it without looking at who it is addressed to? I have managed to get dog-s to stop mailing me quarterly 401k statements and this has been successful, by law they have to mail the year end statement. I've called them many times and spoke to many people and emailed them too asking them to stop the mailing of a statement when I move 401k money but to no avail. Finally, on June 26th someone (the dumb bell) told me that he found the problem - my work email address was incorrect so they couldn't email it and mailed it instead. OK. Finally, it's fixed.
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RIGHT!
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Anyway, I believed them and I rebalanced my 401k from 50/50 to 60/40 which I have wanted to do since mid March. I can only guess what that 10% that has not been in mutual funds has cost me, our mutual fund choices (my employer's mutual funds, a financial services company, not mutual funds from dog-s) have performed very well over the past few years far out pacing the Vanguard index funds I want to invest in. So on July 6th, I rebalanced my 401k to 60/40 and on July 13th the mailed statement arrives via USPO from dog-s. Yeah, they fixed it, just fine.
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There is no way in Hades I'd roll over my 401k to a dog-s IRA tho they sure want me to. I guess I lost my mind thinking that dog-s might be a better choice tha

Jul 16, 2007 5:51 PM

AL_W :

Tig,

I've had no such issue with Fidelity. Everything is electronic. My annual is part of my company's "Wealth Statement" that's mailed to my work address, and as of next year, even that is electronic. Could it be that your employer is not allowing Fidelity to do as you prefer?

My Roth and Rollovers also both are only electronic. No issues with them either.

What I don't like with Fidelity is that when they went electronic, they did not convert all of the previous statements to electronic like Schwab did. The 401K is limited to 2 years online statements and the IRA's to just when they converted to electronic. Schwab converted all of my historical statements to electronic, some 10 years worth.

Jul 17, 2007 5:24 AM

William Marshal :

Maybe.

Again, though, my expense ratio on STAR fund is .34%. Add the $20 lump sum to that and convert the total back to a percentage and my expense ratio is now 1.44%. Vanguard tells me that the "industry average" is 1.29%...

Sure, I could do the electronic thing. But there's no guarantee they won't extend the fees to e-delivery accounts next year. Or invent a new one. Or raise the account minimums to $20,000. In my experience, once a company starts cutting costs or gets a taste of increased revenue it tends to start hearing the "Rocking Horse Winner" whisper.

And these shenanigans erode my trust, frankly.

I'm still on the fence. I'll wait until I have cooled down to make a final decision. Moving means a taxable event, after all.

Grrr. Rock, me, hard place.

Jul 17, 2007 6:48 AM

stocktiger :

I too have had NO issues with Fidelity. It is important when setting up the electronic statements to put the correct Email address in. Most employers email systems will auto filter out emails with attachments, a home email address is the best.

When your 401k/profit sharing is held by Fidelity and ran by your employer, your options to invest are severely limited. When your roll all of this into an IRA your investment choices are almost unlimited.

As far as leaving money in your ex-employers 401K because you are not 59.5 yrs old makes no sense to me. All monies invested and made in an IRA are tax free till you take a distribution.

Sounds like a better user manual would have helped this individual.

Jul 17, 2007 9:40 AM

tjg911 :

<b>As far as leaving money in your ex-employers 401K because you are not 59.5 yrs old makes no sense to me. All monies invested and made in an IRA are tax free till you take a distribution.</b>
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Al_W,
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This has nothing to do with taxes on deferred money it has to do with the 10% penalty incurred if you take that money prior to age 59 1/2.
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My employer's 401k plan allows distributions (without the 10% penalty) to employees that have left the company (for whatever reason) that are at least 55 but not 59 1/2. If I rolled all or part of the 401k into a Vanguard IRA I would have to pay the 10% penalty on distributions from the IRA prior to age 59 1/2. This is why I need to leave some money in the 401k until I am 59 1/2.
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My point was that by leaving some money in my 401k in the Stable Value fund, I can take distributions from it without incurring the 10% penalty. At age 59 1/2 I can then roll any money left in the 401k to my IRA and take distributions from it.
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Tom

Jul 17, 2007 9:49 AM

stocktiger :

The 10% penalty is a valid concern. This can be offset by your tax bracket, possibly having a small business w/write offs.

Sounds like you have a plan, go for it.

If you plan to quit working I would seriously consider paying off all debt, cars, credit cards, etc.. before making the jump.

Jul 17, 2007 11:42 PM

allancoleman :

Having enjoyed the benefits of debt free living myself for years , stocktiger , I whole heartedly agree with your post .

Jul 18, 2007 10:09 AM

tjg911 :

I don't have any debt other than my home mortgage. I have no intention of paying it off, there's 26 years to go so it is not a matter of doing away with it vs having it for just several more years. I'm paying it back using future inflated dollars, at a mere 5.25% fixed rate with tax deductability to boot - virtually free money. There's no sense in paying it off based upon that, besides I can afford to pay it in retirement. The balance is not that big (compared to many people's mortgages!), but it would take a lot of 401k money figuring taxes to Uncle Sam to pay it off. Better to let that money grow that lose it today tho it would be nice to not have to pay it.
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I charge 98% of what I buy on a credit card and pay the balance off in full when the bill comes. I never carry a balance, never have in the past either. The cash back feature is very nice and is adding up real money vs the dopey 'points' I received from my previous credit card.
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Some debt is ok, I think, I feel, I am certain, and my mortgage is in that category.
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Tom

Aug 21, 2007 3:35 PM

tjg911 :

I happened across this at another site that directed me to Vanguard's website.
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"Some investors have even been worried about the safety of money market mutual funds, since some money funds invested in short-term securities backed by subprime mortgage loans. Vanguard® taxable money market funds do not own these securities, yet even some Vanguard investors have opted to buy Treasuries or shares of Treasury money market funds."
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"Does Vanguard Prime Money Market Fund own any of these securities?

Mr. Glocke: No. Our low expense ratio allows us to have very competitive yields without having to hold the types of securities {he is refering to highly rated asset-backed securities and collateralized debt obligations (CDOs) backed by subprime mortgage loans} you are reading about in the media. We have always emphasized safety and liquidity over yield. Therefore, when credit conditions deteriorated, our portfolio has been well-positioned due to the high quality of the credits it holds."
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To read the entire article go to http://www.vanguard.com/VGApp/hnw/VanguardViewsArticle?ArticleJSP=/freshnes s/News_and_Views/news_ALL_mmtreas_08212007_ALL.jsp&SYND=RSS&Channel =AN
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Tom

Aug 22, 2007 3:33 PM

runner26 :

Vanguard has quietly changed its service levels sometime in the last couple of weeks.
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There used to be regular, Voyager (250K-1 million) and Flagship (> 1 million).
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Now Voyager is 100K to 500K and there is a NEW service level called Voyager Select at 500K to 1 million.
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http://flagship.vanguard.com/VGApp/hnw/accounttypes/services