Vanguard Australian Shares Index ETF (VAS).

[divs4ever]

Vanguard Investments Australia Ltd announces the following management fee change effective 3 July
2023: Vanguard Australian Shares Index ETF
ETF ASX CODE Current % p.a. New % p.a. Effective from
VAS 0.10% 0.07% 3 July 2023
Why has Vanguard made this change?
At Vanguard we periodically review the pricing of our funds and, as part of our ongoing commitment to
investors, we aim to pass on any savings to investors where possible.
Following our latest review, we are pleased to announce a fee reduction for our flagship Vanguard
Australian Shares Index ETF (ASX: VAS) effective 3 July 2023.
Further Information
If you have any queries on Vanguard ETFs, please visit vanguard.com.au

DYOR

i hold VAS ( basically my DRP shares left running , and still participating in the DRP , but maybe not forever )

 

[Value Collector]

Vanguard Investments Australia Ltd announces the following management fee change effective 3 July
2023: Vanguard Australian Shares Index ETF
ETF ASX CODE Current % p.a. New % p.a. Effective from
VAS 0.10% 0.07% 3 July 2023
Why has Vanguard made this change?
At Vanguard we periodically review the pricing of our funds and, as part of our ongoing commitment to
investors, we aim to pass on any savings to investors where possible.
Following our latest review, we are pleased to announce a fee reduction for our flagship Vanguard
Australian Shares Index ETF (ASX: VAS) effective 3 July 2023.
Further Information
If you have any queries on Vanguard ETFs, please visit vanguard.com.au

DYOR

i hold VAS ( basically my DRP shares left running , and still participating in the DRP , but maybe not forever )

That’s good ??

 

[divs4ever]

That’s good ??

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 )

 

[Sharkman]

A200 (Betashares) recently dropped their MER from 0.07% to 0.04%. Vanguard probably felt they had to do something to remain competitive.

I don't think it costs that much to run an index fund TBH, there's no discretionary decision making involved once it's all up and running. By up and running I mean building a proprietary system that continually monitors the weights of the fund's underlying holdings vs the weights of the index, and when they diverge past a certain tolerance that can be set by the fund's managers, the computer goes and starts buying or selling the stock in question, possibly using some sort of accumulate/distribute algo to drip feed it in/out in small lots to avoid moving the market too much, until the divergence between fund weight/index weight is within tolerance again.

At least that's how I'd imagine index funds generally operate, in a mostly automated fashion with the computer doing most of the work, the fund managers just need to keep an eye on it and intervene if necessary. As opposed to a discretionary fund where they need to employ a bunch of analysts to research numerous companies, managers to ponder over the reports and make decisions, and they'd still need to pay ongoing operational costs for running computer systems etc. But I've never worked in that area before, so I wouldn't know how they're actually run.

 

[divs4ever]

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 )

 

[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.

 

[frugal.rock]

Mop and bucket to aisle 5 again, please @Joe Blow , bloomin'messy kids...

VAS - Vanguard Australian Shares Index ETF

Doesn't seem to be a thread for this, so here goes. Please see link to Vanguard page outlining details of the new offering - PDS, fact sheets, announcements etc. http://www.vanguard.com.au/personal_investors/investment/etfs/etfs_home.cfm Marginally cheaper than STW at 0.27% versus...

www.aussiestockforums.com

 

[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.

 

[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 )

 

[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 )

 

[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]

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?

 

[Belli]

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?

By looking at who started the thread will give you the answer.

 

[sptrawler]

Very quiet, anyone have any bad experiences dealing with VAS , or is it just a set and forget investment?

 

[divs4ever]

Very quiet, anyone have any bad experiences dealing with VAS , or is it just a set and forget investment?

not 'bad' here , but it basically tracks the appropriate index ( as promised ) so not a lot to get excited/disappointed about

and unless the index dips markedly no compelling reason to add more ( although i participate in the DRP )

now of course all this could change if there is a major market correction ( or melt-up )

 

[monkton]

Very quiet, anyone have any bad experiences dealing with VAS , or is it just a set and forget investment?

Nup, it just chugs along & drops money in my account 4 times per year.