[justincpollard]

One of the nice things about Vanguard is that the fee structure is much less than 1-3% for many of their funds. I invest with them in some of their index funds and pay no more than 0.4% in fees; usually much less than that.

[wiredfool]

Vanguard is owned by their funds, so incentives are aligned with the shareholders of the funds. They are very different than most fund companies.

[g_mifo]

That's a bit of a gimmick. Management still pays themselves from the % of invested funds, not fund performance. Same issue as with a nonprofit -- the corporate profit structure is only one source of moral hazard.

[wiredfool]

Their expense ratios are really low. Wellington, an actively managed fund, has an expense ratio of .25%. Their non-actively managed funds, such as the Index500, are under .2%. Those are very low fees compared to other similar investments. To compare with doing it yourself, at retail trade rates, that's about one potential trade per year per $2-3k invested.

Vanguard actively moves clients from their baseline funds to the lower cost/higher minimum Admiral versions.

I just don't see moral hazard in Vanguard, compared to other financial firms with remotely similar capabilities and offerings.

[wiredfool]

Edit, but too late to actually edit --

The expense ratio of Admiral Index 500 is .05%, not .2%. So even better than I'd remembered.

[zo1]

I watched a good documentary about this a while back.

http://www.pbs.org/wgbh/pages/frontline/retirement-gamble/

[hnnewguy]

>I invest with them in some of their index funds and pay no more than 0.4% in fees

The fees for VTI, which is Vanguard's Total Stock Market Fund is 0.05%.

On top of that, in Canada, most brokers will allow you to buy ETFs in a RRSP or TFSA account for no fees. Very cost efficient.