Vanguard Is Growing Faster Than Everybody Else Combined

Re:Vanguard Is Growing Faster Than Everybody Else Combined by bluGill on Wednesday April 19, 2017 @11:37AM (#14148470)

Vanguard is not as passive as you think. they don't trade often, but they do trade. Their S&P500 fund doesn't just hold stocks in the S&P500, it also holds other stocks that could have been but S&P500 had S&P not limited the index to 500 stocks. Vanguard fund managers regularly make active decisions on what stocks to buy/sell.

Vanguard is not nearly as active is most mutual funds, but they are not entirely passive either.

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Re:Vanguard Is Growing Faster Than Everybody Else Combined by jackcosgrove on Wednesday April 19, 2017 @12:31PM (#14149033)

Active and passive are just marketing labels. The frequency of trades should be correlated with the expense ratio. If you do more trades, you better be hiring more analysts to figure out those trades.

Vanguard has lower costs because it employs fewer people to execute fewer trades. That's all I really care about.

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Re:Vanguard Is Growing Faster Than Everybody Else Combined by jessriedel on Wednesday April 19, 2017 @02:55PM (#14150650)

Expense ratios for actively managed funds aren't that tied to trading frequency, I don't think. Most of the cost goes to paying for research, and that can be for positions held on all time scales. Someone picking a handful of blue chip stocks based on fundamentals is still definitely "active investing" even if they buy and hold for a long time.

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Re:Vanguard Is Growing Faster Than Everybody Else Combined by kgwgk on Wednesday April 19, 2017 @02:53PM (#14150626)

Vanguard offers a range of products. Some do really hold the stocks in the benchmark. "Vanguard S&P 500 ETF is an exchange-traded share class of Vanguard 500 Index Fund. Using full replication, the portfolio holds all stocks in the same capitalization weighting as the index."

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