Hey guys,
Been reading about index funds and I am interested in opening an account with Vanguard here in Australia.
>Warren Buffett
There is talk that even Buffett advocates for index fund investing and that in the long run it would beat active funds.
Has anyone use Vanguard, is it worth it?
Cheers
Yes, I have 70k in Vanguard. Pretty good for long term holding.
Poorfag here. I just started investing myself. I put 2k into vanguard today. I was thinking about making regular 2k contributions but of course there's brokerage each time. Would I be better off in a traditional managed index fund?
>getting cucked by brokerage fees
>isn't /rgt/
mutual funds offered by vanguard australia are pretty overpriced
go for ETFs instead
i have about $150k in vanguard funds right now and i'm pretty pleased with the service. fees are low, web interface is good, customer support is good, tax stuff is always prompt and correct.
>Would I be better off in a traditional managed index fund?
No because the active fund starts at a cost disadvantage which compounds negatively over time
Vanguard, 0.1%
Average active fund, 1.17%
most of the mutual funds offered by vanguard australia have fees of 0.9%, hence why above i suggested going for ETFs (even though many of those are still like 0.2% fees)
What ETF did you go for? How long have you had them and what sort of returns are you getting?
vanguardinvestments.com.au
i live and work in the US at the moment, so i hold mutual funds with vanguard US. i have 68% VTSAX (US stock), 17% VTIAX (non-US stock), 15% VBTLX (US bonds).
when i move back to australia i'll incorporate an investment tracking a real estate index. i'll likely rebalance to 63% US stock, 12% non-US stock, 10% australian real estate, 10% australian bonds.
the ETFs i'd look at for vanguard australia would be VTS and VEU (US, non-US stock), VAS and VGS (AU, non-AU stock), VAF or VIF (AU, global bonds), and VAP (AU property). choose whether you want to go US/non-US or AU/non-AU for stock.
pic related is the performance of my non-retirement account since i opened it in april 2015. S&P 500 returned ~9.6% over the same time period. coincidentally, most of my deposits happened last year before the election, so most of my gains have been in the last couple of months.
FYI, the "rate of return" reported on Vanguard's website is a ROI not a growth rate. It takes into account not only the growth of your investment choices, but also the timing of when you bought them.
As such, you should be careful comparing it to the growth return an index because its really an apples-to-oranges comparison. Your ROI can appear artificially high or low (especially for periods of times of 1 year or less) due to short-term market movements.
yeah, you did a much better job of making the point i was trying to make in the last sentence there.
stocks were largely flat over the year starting april 2015, and then just as the market started going up i happened to make a handful of big deposits, so my ROI is inflated due to coincidence and timing.
I just opened a roth IRA with vanguard. I haven't put that much money into it though. Probably going to put $1000 in for 2016 before April and max it out this year at 5500. Any tips as to what fund I should buy?
>bonds
are you 60 years old? Why gimp 10% of your portfolio
worry about your own investments, i know what i'm doing
This is my portfolio. It used to be the 529 my parents set up for me, but after I graduated my parents let me put whatever was left over in my roth ira (fucking blessed).
Here's how I distributed the money
20% VIGAX (large cap)
20% VEXAX (mid cap)
20% VTMSX (small cap)
10% VEMAX (emerging markets)
10% VHGEX (foreign markets)
10% VGRLX (real estate)
10% VGHCX (health care)
I think it's a pretty good diversification. I'm pretty sure vanguard is technically a non profit hence the super low expense ratios. It can't be beat
...
Are those ETFs or index funds?
>bonds
You do know that long-term bonds outperformed large-caps, mid-caps, small-caps, emerging markets, internationals, and real estate in 2015, right? Not to mention how they round off the volatility in an equity-filled portfolio.
If you're going to shit on an asset class, at least get your facts straight.
Asset allocations looks pretty good, though I'd recommend that you consider at least a 10% bond allocation. See above. I especially like your overweighting into mid- and small-caps.
>I'm pretty sure vanguard is technically a non profit
Not exactly. Its investor-owned, meaning that Vanguard is actually owned by the various Vanguard funds, which in term are owned by the investors (you and me). They do make profits, but the people who ultimately benefit from those profits are the investors. Thus, there's really no incentive to gauge investors for excess fees or costs, since the money flows back to our pockets anyway.
about.vanguard.com
i'll take diversification for 400, alex
I read that VAS last dividend pay was 0.9281. What does that mean exactly? Does it mean they pay .92c for every dollar invested?
i think its $.92 for every share, so the yield would be $.92/share price, which is currently $71
Cheers mate
and then there's this moron
>You do know that long-term bonds outperformed large-caps, mid-caps, small-caps, emerging markets, internationals, and real estate in 2015, right? Not to mention how they round off the volatility in an equity-filled portfolio.
So? Unless someone is dicking about with their investments every 5 mins, stocks will pull ahead in the longer term
What's the point in a 20 year old having bonds in their retirement account
>What's the point in a 20 year old having bonds in their retirement account
Diversification and risk management. In other words, same reason for having any asset class.
I'm not going to punch you in the throat if you don't add bonds until you're a bit older. But by the same token, you shouldn't assume that everyone has the same goals and risk tolerances as you. That's just stupid.
>What's the point in a 20 year old having bonds in their retirement account
why do you care about my asset allocation? someone asked for details about my portfolio and its performance, and i gave them those details. i wasn't giving advice, i was saying "here is what i have and here is how it's performing." if you don't want to buy bonds then don't, but i have good reasons for the asset allocation i've chosen. as i said to someone else above: worry about your own investments, i know what i'm doing.
those are mutual funds tracking indices
ETFs can also track indices, vanguard offers many ETFs which track the same indices as their mutual funds