VAS - Vanguard Australian Shares Index ETF

[Value Collector]

yes some rivals were starting to get competitive

am still wondering how these ETFs make a reasonable profit though , i bet the management doesn't come cheap ( those computers need upgrades every so often )

Large volumes, and very easy job, they don’t need to employ high income stock pickers and pay them large bonuses, they just employ people that buy according to the index.

 

[Sharkman]

VAS Portfolio Turnover 0.82%

A200 Portfolio Turnover 4.71%

STW Portfolio Turnover 2.46%

IOZ Portfolio Turnover 4.34%

some seem to be less 'passive' than others , ( i would have thought VAS would turn over more than the rivals with roughly 100 more stocks held )

I'd be interested to see if there was any sort of (inverse) correlation between turnover and tracking error. I'd imagine it boils down to differences in operational methodology eg. if they were using some sort of tolerance limit to decide whether they should go and adjust a position to bring its portfolio weight back into line with the index weight, in which case perhaps the ones with higher turnover are more frequently/stringently adjusting their positions to match the index weights, so in theory they should have lower tracking error.

 

[divs4ever]

Large volumes, and very easy job, they don’t need to employ high income stock pickers and pay them large bonuses, they just employ people that buy according to the index.

well ' the index ' is calculated from outside the fund manager so is likely just a subscription cost , and the trading ( mostly ) can be automated ( except for big moves like the BHP-WDS split/merger ) , but there is still plenty of paperwork and compliance stuff

you hopefully pay good wages to the staff you have so they do a quality job , but 0.0x% per year is a very slim margin

 

[Value Collector]

well ' the index ' is calculated from outside the fund manager so is likely just a subscription cost , and the trading ( mostly ) can be automated ( except for big moves like the BHP-WDS split/merger ) , but there is still plenty of paperwork and compliance stuff

you hopefully pay good wages to the staff you have so they do a quality job , but 0.0x% per year is a very slim margin

Also, Vanguard is member owned, it has no shareholders, so no push to make profits.

Other funds have all the same paper work and compliance stuff, but they also have a whole other layer of costs, to support eg wages for hot shot asset managers, research subscriptions to all sorts of info and of course profit for the firm.

 

[Sharkman]

you hopefully pay good wages to the staff you have so they do a quality job , but 0.0x% per year is a very slim margin

I'd wager that many of their IT and back office processing type roles would've been offshored to cheap labour places (not naming names of course), just like what every other insto has been doing for the last decade or so.

 

[frugal.rock]

i hold VAS ( basically my DRP shares left running , and still participating in the DRP , but maybe

I find the problem here being the share price restricting smaller holdings participating in the DRP, otherwise, I might have a holding.

 

[Belli]

well ' the index ' is calculated from outside the fund manager so is likely just a subscription cost , and the trading ( mostly ) can be automated ( except for big moves like the BHP-WDS split/merger ) , but there is still plenty of paperwork and compliance stuff

you hopefully pay good wages to the staff you have so they do a quality job , but 0.0x% per year is a very slim margin

I assume you have read the PDS and know what VAS ETF actually is. If not:

The effort and cost involved in creating the relevant ETF reflecting the underlying fund is bugger all of nothing.

 

[divs4ever]

I'd wager that many of their IT and back office processing type roles would've been offshored to cheap labour places (not naming names of course), just like what every other insto has been doing for the last decade or so.

that seems to be the wider trend , however some tasks are better done in-house ( in a good company ) off-shoring works well in most cases most of the time , but take the BHP-WDS deal real decisions had to be made and do the restructure smoothly , there will be other deals that still require decisions coming when the circus falls off the trapeze

computers have their moments as well ( and they happen hard and fast )

 

[frugal.rock]

computers have their moments as well

Old people have more moments, now where was I ?
Why am I in a shopping centre in my pyjamas and slippers?

 

[sptrawler]

I find the problem here being the share price restricting smaller holdings participating in the DRP, otherwise, I might have a holding.

How much of a holding do you need to have to participate? I've been sitting on a stash and waiting for armageddon, to enter.

 

[divs4ever]

I assume you have read the PDS and know what VAS ETF actually is. If not:

View attachment 158017
View attachment 158018

The effort and cost involved in creating the relevant ETF reflecting the underlying fund is bugger all of nothing.

not recently but was aware the retail fund ( the trades on the ASX ) is not completely identical to the wholesale version ( they both track the same index , but have differences under the hood )

i bought into the ASX listed version by choice as i wanted the extra flexibility ... and a 0.07% commission wouldn't even get me to roll-over in my sleep , and some rivals are charging less ( for a slightly different package )

 

[frugal.rock]

It's the price of each share being around $90 each being restrictive on the DRP.
Need a fair size holding to start off with.

 

[Belli]

How much of a holding do you need to have to participate? I've been sitting on a stash and waiting for armageddon, to enter.

One unit.

However, you will not be allocated any additional units under the DRP until the carry-forward balance is sufficient for that to occur.

That's if you're buying on market. If you're doing it through one of those stake type of brokerages, you appear to be allocated a fraction of a unit but really all you have is "an interest in" a portion of a unit.

 

[divs4ever]

I'd be interested to see if there was any sort of (inverse) correlation between turnover and tracking error. I'd imagine it boils down to differences in operational methodology eg. if they were using some sort of tolerance limit to decide whether they should go and adjust a position to bring its portfolio weight back into line with the index weight, in which case perhaps the ones with higher turnover are more frequently/stringently adjusting their positions to match the index weights, so in theory they should have lower tracking error.

yes doesn't the math look complicated when looking for tracking error , i would guess each fund rebalances to fund regularly ( not just 3 monthly with the S&P index changes the rise of BKL ( and it's probable departure ) and PME both fairly illiquid but included in the XJO can be cumbersome , another interesting time is when the BIG banks go ex-div. ( but the ETFs track the daily NTA of the portfolio )

buying VAS in a sliding market in 2011 was very entertaining

i assume most of the 'tracking error' is monetized by the market makers

 

[frugal.rock]

If they did a 1:15 split, it would open the door to many more poor sods to participate in the DRP and buy their product, IMO. 15 times more units, at around $6 each

I'd like to treat it like a bank savings account, put a chunk in every 3 or 6 months and have it all compounding itself. Current price knocks that idea if you dont have a fairly big chunk to start.

 

[sptrawler]

One unit.

However, you will not be allocated any additional units under the DRP until the carry-forward balance is sufficient for that to occur.

That's if you're buying on market. If you're doing it through one of those stake type of brokerages, you appear to be allocated a fraction of a unit but really all you have is "an interest in" a portion of a unit.

Well that's a relief, I thought you might have to buy a 1,000, the way frugal was hyperventilating. ?

 

[frugal.rock]

I'm so confused, why is there 2 VAS threads?
Is it a stock or an ETF?
Why is this thread in the stocks thread?

 

[So_Cynical]

I'd like to treat it like a bank savings account, put a chunk in every 3 or 6 months and have it all compounding itself. Current price knocks that idea if you dont have a fairly big chunk to start.

They have a non listed equivalent fund that allows smaller cost free cash additions. not sure if that fund has a DRP.

 

[frugal.rock]

Well that's a relief, I thought you might have to buy a 1,000, the way frugal was hyperventilating. ?

What's the ROI PA on one unit?
About a meat pies worth.

Not enough to participate in the DRP.

 

[frugal.rock]

They have a non listed equivalent fund that allows smaller cost free cash additions. not sure if that fund has a DRP.

I'm just having a winge for the little guy.
That sounds interesting as a concept. Might look into that instead. Cheers