[dmoy]

Vanguard doesn't make money off of short term lending.

They do it, but the proceeds go back to the individual funds (helps boost index tracking performance).

Fidelity and Schwab both take a cut. I forget beyond that, I guess IBKR does stuff.

[toast0]

Vanguard keeps sending me emails lately about enabling lending on my brokerage account[1]; although I only have classic mutual funds in there, which I don't think can be lent. I imagine their brokerage lending will include a cut for the brokerage, although maybe it will be closer to cost than at other brokerages. I don't really know where the Vanguard brokerage net revenue ends up.

[1] And frankly a lot of other 'opportunities' I'm not interested in, that seem outside the John Bogle model of Vanguard helping normal people invest in the public market at low cost. I don't want to invest in off market opportunities, thanks, and it makes me lower my opinion of the company that they push it.

[dmoy]

Most vanguard classical mutual funds are share classes of an underlying ETF, and can be lent.

Last I checked (which to be fair was like a year or so ago), vanguard didn't take a cut for securities lending. It does however boost the fund's performance

https://corporate.vanguard.com/content/corporatesite/us/en/c...

[toast0]

That page is from Vanguard the funds.

Vanguard the brokerage also has a share lending program, advertisement here https://investor.vanguard.com/campaign/earn-additional-incom...

> Vanguard Brokerage maintains an economic interest in Fully Paid Lending program loans and earns revenue in connection with such loans.

Vanguard the brokerage wants me to enable lending, but my mutual fund shares in Vanguard the brokerage can't be lent, because mutual funds are not lendable. If I converted it to an ETF, then the ETF could be lent, but I don't know how much interest there is in borrowing ETFs to short.

The underlying holdings in the mutual fund can be lent by Vanguard the funds. Vanguard says all the proceeds from lending (net of expenses) go to the funds. I think Schwab and Fidelity take a cut of lending proceeds on funds beyond their program expenses, but then they take a 'zero expense ratio'. It doesn't necessarily matter to me where specifically the Fund administrator takes their fees, it's the end of the day net investment value. And honestly, inertia is a big part of it, I have too much unrealized capital gains to really consider changing my stock funds, but I could be convinced to switch to a different brokerage.