Displaying items by tag: vanguard

(New York)

Barron’s has been running a series of articles outlining the best dividend funds by different category. They have also put out a piece outlining the best performing dividend funds overall. The funds mentioned below have all provided top performance over the last half decade. The three top funds are the Vanguard Dividend Growth Fund (VDIGX), The Bishop Street Dividend Value Fund (BSLIX), and the Madison Dividend Income Fund (BHBFX). The Vanguard fund has achieved an annual 10.19% average return over the last five years, just under the S&P 500’s 10.67%. Its fees are much lower than the others at only 0.26%.

FINSUM: VDIGX is a great option for solid dividends and returns, but the field of these kinds of funds is growing and diverse.

(New York)

Jack Bogle, the founder of Vanguard, is a legendary name is investing. Not only did he found and grow one of the largest asset managers in the world, but he has a habit of being right when he predicts returns. Well, he has just made another prediction, and unfortunately it is not one investors will like. He thinks returns over the next decade are going to lag their historical levels badly. His forecast is that investors can expect a 1.75% net return with a 50%/50% stock-bond portfolio over the next decade.

FINSUM: If this call turns out to be right, it will have huge implications for retirees and pension funds, as “safe spending” rules and total returns for pensions will be devastated. That sad, we think forecasting that far out is all but useless.

(New York)

Vanguard appears to be taking action on one it its biggest weaknesses. Others in the industry, notably Fidelity, have been making moves to try to make their funds ever more accessible and cheaper. Vanguard has been the low cost leader for years, but some of their features now make them look slightly outdated. Perhaps no longer. For its Admiral Shares class, its cheaper option, Vanguard has lowered the minimum investment from $10,000 to $3,000, a significantly lower threshold for younger and less wealthy investors. The changes will apply to 38 of their index mutual funds.

FINSUM: This is a good move but we are surprised they didn’t just change it to no minimums.

(New York)

Here is a mundane but important question: what is the best single fund to track the whole market? There is now a wealth of options, from Fidelity’s free index tracker all the way to popular, but more costly SPY. The answer to this question is not as straightforward as one might think, as each of the funds has its own characteristics. For instance, while Vanguard’s VTI is popular, it has a quirky structure that can boost unrealized gains. It is also harder to trade without fees. Fidelity’s zero fee index mutual fund is a good choice, but only available on its own platform. Blackrock’s ITOT might be the best choice overall when considering fees, performance, and availability.

FINSUM: For being considered “vanilla”, there certainly are a lot of different flavors of index tracker these days.

(New York)

Fidelity is doubling down on its recent move to offer completely free index funds with no investment minimums. The money manager will launch a pair of new free index funds, one focused on large caps, and the other on the “extended market” (or small and midcaps), in late September. The new free funds are part of Fidelity’s strategy to compete vigorously on pricing to bring in new clients, and then try to earn money from them spending on other services.

FINSUM: Fidelity is almost using these funds as loss leaders in order to drum up other business. This may work for them because they have such a large product suite, but for less diversified managers, it poses a serious challenge.