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OT: Citigroup exit from Dow

In a Vanguard 500 index fund, there are no front load fees or redemption fees, as long as you keep your money in long enough. They have a very reasonable policy to discourage frequent trading. The bid/ask spreads that they have to pay, are not part of their states expenses, but due to lack of portfolio turnover, those spreads do not amount to much.

Vanguard also makes a bit of money by lending securities for short selling. I believe that they get adequate collateral. Securities lending, apparently, generates substantial fees that offset their expenses to some extent.

Why not, if "management" is mostly automated. Vanguard has a nice website where most customer requests can be fulfilled by the computer.

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Reply to
Ignoramus4197
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I'm talking about the creation/redemption fees involving the fund as described in the prospectus. Not loads or commissions to buying and selling fund shares.

It has nothing to do with the mechanical costs. Wall Street just does not work for.small fees. Their own capital would earn a much better return elsewhere.

Look, a 0.09 percent expense means that just to pay one guy's salary will require $100s of millions in investments. What do they really charge?

Reply to
Richard J Kinch

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