Vanguard Funds Europe

I phoned them recently and was told by a young lady on the phone that Irish investors can invest but there is a minimum investment of 100k. I think she was irritated that I had wasted 15 seconds out of her precious day and had a few oil barons on hold so I didn't press any further.

It is a pity that Vanguard do not provide the types of service they do in the US. Most American investment books refer to low-cost Vanguard regular investment funds which track indices and are available to small individual investors .. rather like Quinn Life does in Ireland but with much smaller annual charges. 1%, 1.2% and 1.5% are cheap compared to most investment products available in Ireland but US investors are paying a fraction of those charges to invest in trackers.

I suppose we will get there too someday... ho hum.
 
You can buy Vanguard ETFs on the US stock market via you broker. Not exactly what you want but it could meet your need. As with Vanguard funds the charges are very low.
 
PubMan said:
You can buy Vanguard ETFs on the US stock market via you broker. Not exactly what you want but it could meet your need. As with Vanguard funds the charges are very low.
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But John Bogle Vanguard founder, in his book "Common sense investing", favours Vanguard Index Funds ( .18% annual charges) or other providers Index Funds, e.g. Fidelity (.10% annual charges), over ETF's. He cites a study of ETF's & their average annual return was 5% worse than the indexes they were tracking. Vanguard & Fidelity Index Funds were within .2% of the Index return.

As regards Quin funds with nominal 1% annual charges - I doubt if Quin are buying shares directly in companies - I suspect they are buying ETF's - if their ETF provider has annual charge of .5% - then total annual charge is 1.5% - not to mention the 5% annual shortfall above.
It would be well worthwhile for Irish investors to form a syndicate to come up with the 100k mentioned earlier in this thread, & invest in Vanguard Index Fund ( .38% annual charges for Irish investors)
 
cronley said:
But John Bogle Vanguard founder, in his book "Common sense investing", favours Vanguard Index Funds ( .18% annual charges) or other providers Index Funds, e.g. Fidelity (.10% annual charges), over ETF's. He cites a study of ETF's & their average annual return was 5% worse than the indexes they were tracking. Vanguard & Fidelity Index Funds were within .2% of the Index return.

As regards Quin funds with nominal 1% annual charges - I doubt if Quin are buying shares directly in companies - I suspect they are buying ETF's - if their ETF provider has annual charge of .5% - then total annual charge is 1.5% - not to mention the 5% annual shortfall above.
It would be well worthwhile for Irish investors to form a syndicate to come up with the 100k mentioned earlier in this thread, & invest in Vanguard Index Fund ( .38% annual charges for Irish investors)
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There was a couple of threads here before that established that the Quinn funds with the 1% annual fee was the total cost. All other costs were already rolled into this.

I have also seen some recent articles (morningstar?) whereby there were slight advantages to low cost mutual funds over ETF's. However I believe that US Tax laws were the most significant factor. In any event the difference was pretty marginal.

As regards the 5% difference mentioned above, one would really need to see the study to know if they are comparing like with like. Different funds/ETFs use different methods to track an index. This is most likely the main source of the 5% difference. For example there may be a CAP whereby no single share can be more than 10% of the fund. Rules such as this can mean the fund is not the same as the underlying index.

Some ETF's have very low charges....IVV which tracks the S&P500 has a TER of 0.09% and a 5yr trailing return of -0.23% versus the S&P500.
 
cronley said:
He cites a study of ETF's & their average annual return was 5% worse than the indexes they were tracking.
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I'd find that very hard to believe. Check out [broken link removed] of the Vanguard VTI ETF and the Wiltshire 5000 index. Most ETFs I have researched have similar graphs. In fact I would like to see 1 ETF that trails its index by 5% (excluding some esoteric ETFs). It wouldn't last long if it was underperforming that badly. Are you sure you have quoted Bogles claim accurately?
 
PubMan said:
I'd find that very hard to believe. Check out [broken link removed] of the Vanguard VTI ETF and the Wiltshire 5000 index. Most ETFs I have researched have similar graphs. In fact I would like to see 1 ETF that trails its index by 5% (excluding some esoteric ETFs). It wouldn't last long if it was underperforming that badly. Are you sure you have quoted Bogles claim accurately?
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This is the exact piece from Chapter 15, page 171, of his book - "consider the record of the 20 best performing ETF's during 2003-2006. Only one earned a better return for its shareholders than the return it reported. The average shortfall in shareholder return was equal to 5 percentage points per year. The largest gap was 14 percentage points; iShares Austria reported a 42 percent return, but its investors earned just 28 percent."
 
I believe Bogle is making a different point here - when he talks of iShares returning 42% but the investor making 28% - he may be talking about the average investor return - that average investor will join the ETF after missing the initial jump which made that ETF attractive.

If an ETF holds a most or all the companies shares in the index I doubt he'd have a problem with it, it's really sector specific ETFs or ones with a handful of companies that would be the problem, these would be ones that investors will tend to swap in and out of due to trends whereas with an index tracker there's less temptation to do this.
 
ashambles said:
I believe Bogle is making a different point here - when he talks of iShares returning 42% but the investor making 28% - he may be talking about the average investor return - that average investor will join the ETF after missing the initial jump which made that ETF attractive.
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That or the fact that it's traded like a share encourages people to trade them more than they should, diminishing their returns.
 
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