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Re: Happy Birthday, FZROX! (Has it Won the Total Market Fund Battle?)
White Coat Investor wrote: ↑Mon Aug 07, 2023 11:21 am
Clearly not apples to apples given the totally different time intervals, but it surely appears considerably totally different and higher to me. Over 5 years, taxes scale back VTI’s return solely from 8.72% to eight.27% whereas over the lifetime of the fund FZROX went from 18 to 14%.
This put up is a month outdated, however you are evaluating taxes on distributions (Vanguard) vs taxes on distributions and promoting of shares (Constancy). For those who simply have a look at distributions, Constancy is simply barely worse than Vanguard. They do have small capital features distributions annually which contributes to the distinction.
From Morningstar, the 3-year tax value for VG is 0.37 whereas Constancy is 0.42. They need to have 5-year outcomes later this 12 months.
Re: Happy Birthday, FZROX! (Has it Won the Total Market Fund Battle?)
SmileyFace wrote: ↑Fri Sep 06, 2024 7:15 amgavinsiu wrote: ↑Fri Sep 06, 2024 7:13 am
What could be one in every of issues that may happen when you get caught with a portability problem the place it’s a must to understand giant capital acquire to modify? Off the highest of my head
- Constancy modifications the fund’s charge in order that it is now not zero.
- Constancy decides so as to add an energetic part.
- Constancy merge the fund with one other fund.
And all of this is applicable to any fund anyplace – this stuff can occur whether or not the fund is transportable or not. Transferring a fund to a different brokerage prevents none of those points.
Agree it is a dangerous instance. The query is when you really feel Constancy or Vanguard is extra more likely to keep the unique fund mandate. If FZROX is a loss chief, I believe I will likely be much less more likely to spend money on it because it’s artificially substained. I would not have much less problem in tax benefit since I can simply escape by promoting with out tax penalties.
Re: Happy Birthday, FZROX! (Has it Won the Total Market Fund Battle?)
gavinsiu wrote: ↑Fri Sep 06, 2024 9:57 amSmileyFace wrote: ↑Fri Sep 06, 2024 7:15 amgavinsiu wrote: ↑Fri Sep 06, 2024 7:13 am
What could be one in every of issues that may happen when you get caught with a portability problem the place it’s a must to understand giant capital acquire to modify? Off the highest of my head
- Constancy modifications the fund’s charge in order that it is now not zero.
- Constancy decides so as to add an energetic part.
- Constancy merge the fund with one other fund.
And all of this is applicable to any fund anyplace – this stuff can occur whether or not the fund is transportable or not. Transferring a fund to a different brokerage prevents none of those points.
Agree it is a dangerous instance. The query is when you really feel Constancy or Vanguard is extra more likely to keep the unique fund mandate. If FZROX is a loss chief, I believe I will likely be much less more likely to spend money on it because it’s artificially substained. I would not have much less problem in tax benefit since I can simply escape by promoting with out tax penalties.
I’d assume that in a tax-advantaged account it would not matter in the event that they at some point determined to liquidate it. You possibly can simply purchase one thing else.
Get most of it proper and do not make any massive errors. All else being equal, easier is best. Easy is as easy does.
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Re: Happy Birthday, FZROX! (Has it Won the Total Market Fund Battle?)
gavinsiu wrote: ↑Fri Sep 06, 2024 9:57 amSmileyFace wrote: ↑Fri Sep 06, 2024 7:15 amgavinsiu wrote: ↑Fri Sep 06, 2024 7:13 am
What could be one in every of issues that may happen when you get caught with a portability problem the place it’s a must to understand giant capital acquire to modify? Off the highest of my head
- Constancy modifications the fund’s charge in order that it is now not zero.
- Constancy decides so as to add an energetic part.
- Constancy merge the fund with one other fund.
And all of this is applicable to any fund anyplace – this stuff can occur whether or not the fund is transportable or not. Transferring a fund to a different brokerage prevents none of those points.
Agree it is a dangerous instance. The query is when you really feel Constancy or Vanguard is extra more likely to keep the unique fund mandate. If FZROX is a loss chief, I believe I will likely be much less more likely to spend money on it because it’s artificially substained. I would not have much less problem in tax benefit since I can simply escape by promoting with out tax penalties.
We do not know if it’s a loss chief or not. That’s pure hypothesis. However whether it is – the “chief” a part of that equation means they is perhaps extra more likely to maintain it since it’s “main” to different enterprise.
In my case – I do not care. I maintain it in pretax – if they alter it I’ll simply shift again to FSKAX (which additionally has a decrease ER than VTSAX).
Re: Happy Birthday, FZROX! (Has it Won the Total Market Fund Battle?)
Nedsaid was a bit fallacious concerning the Constancy Zero funds, I by no means doubted that they’d be good investments however they only appeared a bit too gimmicky to me. Seems these have been high-quality investments, you in all probability do not wish to personal these in taxable accounts as they don’t seem to be transportable to different brokerages. This was an enormous advertising and marketing win for Constancy, the funds drew investor curiosity, and dethroned Vanguard because the low-cost chief within the index fund area. That stated, Vanguard could be very, excellent at indexing and the fee variations between Vanguard and Constancy are small. Hooray for Constancy!
A idiot and his cash are good for enterprise.
Re: Happy Birthday, FZROX! (Has it Won the Total Market Fund Battle?)
nedsaid wrote: ↑Sat Sep 07, 2024 10:40 am
Nedsaid was a bit fallacious concerning the Constancy Zero funds, I by no means doubted that they’d be good investments however they only appeared a bit too gimmicky to me. Seems these have been high-quality investments, you in all probability do not wish to personal these in taxable accounts as they don’t seem to be transportable to different brokerages. This was an enormous advertising and marketing win for Constancy, the funds drew investor curiosity, and dethroned Vanguard because the low-cost chief within the index fund area. That stated, Vanguard could be very, excellent at indexing and the fee variations between Vanguard and Constancy are small. Hooray for Constancy!
So, I ponder how many individuals purchase zero funds of their taxable account, then later wish to change to a different brokerage, then discover out the tax value to promote, so they only keep at Constancy. Switching prices.
Get most of it proper and do not make any massive errors. All else being equal, easier is best. Easy is as easy does.
Re: Happy Birthday, FZROX! (Has it Won the Total Market Fund Battle?)
GaryA505 wrote: ↑Sat Sep 07, 2024 1:12 pmnedsaid wrote: ↑Sat Sep 07, 2024 10:40 am
Nedsaid was a bit fallacious concerning the Constancy Zero funds, I by no means doubted that they’d be good investments however they only appeared a bit too gimmicky to me. Seems these have been high-quality investments, you in all probability do not wish to personal these in taxable accounts as they don’t seem to be transportable to different brokerages. This was an enormous advertising and marketing win for Constancy, the funds drew investor curiosity, and dethroned Vanguard because the low-cost chief within the index fund area. That stated, Vanguard could be very, excellent at indexing and the fee variations between Vanguard and Constancy are small. Hooray for Constancy!So, I ponder how many individuals purchase zero funds of their taxable account, then later wish to change to a different brokerage, then discover out the tax value to promote, so they only keep at Constancy. Switching prices.
I’m cynical sufficient to assume that is in response to plan, making this an impediment to switching brokers however then again Constancy did not have to supply these within the first place. I personal the Constancy Complete Market Index (FSKAX) which has bills of 0.015% per 12 months or one and one half foundation factors which is sort of free and is transportable. So to unravel this problem simply personal FSKAX in taxable accounts and FZROX in tax deferred accounts.
From the start, Bogleheads have commented on this problem, nobody who follows this discussion board wanted to fall into the entice you described.
A idiot and his cash are good for enterprise.
Re: Happy Birthday, FZROX! (Has it Won the Total Market Fund Battle?)
nedsaid wrote: ↑Sat Sep 07, 2024 1:26 pmGaryA505 wrote: ↑Sat Sep 07, 2024 1:12 pmnedsaid wrote: ↑Sat Sep 07, 2024 10:40 am
Nedsaid was a bit fallacious concerning the Constancy Zero funds, I by no means doubted that they’d be good investments however they only appeared a bit too gimmicky to me. Seems these have been high-quality investments, you in all probability do not wish to personal these in taxable accounts as they don’t seem to be transportable to different brokerages. This was an enormous advertising and marketing win for Constancy, the funds drew investor curiosity, and dethroned Vanguard because the low-cost chief within the index fund area. That stated, Vanguard could be very, excellent at indexing and the fee variations between Vanguard and Constancy are small. Hooray for Constancy!So, I ponder how many individuals purchase zero funds of their taxable account, then later wish to change to a different brokerage, then discover out the tax value to promote, so they only keep at Constancy. Switching prices.
I’m cynical sufficient to assume that is in response to plan, making this an impediment to switching brokers however then again Constancy did not have to supply these within the first place. I personal the Constancy Complete Market Index (FSKAX) which has bills of 0.015% per 12 months or one and one half foundation factors which is sort of free and is transportable. So to unravel this problem simply personal FSKAX in taxable accounts and FZROX in tax deferred accounts.
From the start, Bogleheads have commented on this problem, nobody who follows this discussion board wanted to fall into the entice you described.
Possibly I am much more cynical and/or cautious than you. I plan maintain all Vanguard mutual funds in my Constancy taxable account. That method if Constancy ticks me off or I’ve another cause to maneuver all of it again to Vanguard, I can do this. I plan to make use of Constancy’s automated recurring withdrawals which work with ANY mutual fund, however Vanguard’s automated recurring withdrawals solely work with Vanguard mutual funds.
Get most of it proper and do not make any massive errors. All else being equal, easier is best. Easy is as easy does.
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Re: Happy Birthday, FZROX! (Has it Won the Total Market Fund Battle?)
I might like to see information on what funds are supplied in 401(okay) plans by numerous suppliers.
My private guess is that almost all of FZROX buyers are holding it in 401(okay) plans, however that is only a guess. The ZERO® funds could be very engaging to 401(okay) choice committees as a method of avoiding any complaints about high-expense-ratio funds within the plan. However that’s strictly a guess.
Annual earnings twenty kilos, annual expenditure nineteen nineteen and 6, outcome happiness; Annual earnings twenty kilos, annual expenditure twenty kilos ought and 6, outcome distress.
Re: Happy Birthday, FZROX! (Has it Won the Total Market Fund Battle?)
nisiprius wrote: ↑Sat Sep 07, 2024 1:55 pmI might like to see information on what funds are supplied in 401(okay) plans by numerous suppliers.
My private guess is that almost all of FZROX buyers are holding it in 401(okay) plans, however that is only a guess. The ZERO® funds could be very engaging to 401(okay) choice committees as a method of avoiding any complaints about high-expense-ratio funds within the plan. However that’s strictly a guess.
When my present employer was closing our SEP IRA and establishing a brand new 401K, the CEO and advantages admin had been completely clueless and had been about to make use of some high-cost 401K supplier that was steered by our medical health insurance agent. Yikes. I steered them in direction of Worker Fiduciary and I even gave them an inventory of Vanguard funds which they did find yourself utilizing. I shudder to consider the end result if I hadn’t offered my $.02 (which was not requested).
Get most of it proper and do not make any massive errors. All else being equal, easier is best. Easy is as easy does.
Re: Happy Birthday, FZROX! (Has it Won the Total Market Fund Battle?)
gavinsiu wrote: ↑Fri Sep 06, 2024 7:13 am
What could be one in every of issues that may happen when you get caught with a portability problem the place it’s a must to understand giant capital acquire to modify? Off the highest of my head
- Constancy modifications the fund’s charge in order that it is now not zero.
- Constancy decides so as to add an energetic part.
- Constancy merge the fund with one other fund.
Gavinsu, are you, or is anybody else, conscious of conduct by Constancy, Vanguard, Schwab, T. Rowe Worth, or any of the opposite majors, which is perhaps thought to be a “bait and change” within the context of a mutual fund, or accounts holding mutual funds? I do know they alter their insurance policies from time to time, and withdraw companies, however I personally can not recall an instance of a scenario I assumed represented unscrupulousness and self-dealing of the sort that might be represented by no less than the primary and third of those, and perhaps the second.
Core 4 w/ nominal bonds & TIPS. Refi Rampage: Buy: 3.875% 30 -> R1 3% 20 -> R2 2.375% 15 -> R3 1.99% 15 -> R4 1.875% 15
Re: Happy Birthday, FZROX! (Has it Won the Total Market Fund Battle?)
Because of this, perhaps I need the largest and easiest funds in all of my accounts. You already know, funds which were round for a very long time and are more likely to be round for a very long time.
Get most of it proper and do not make any massive errors. All else being equal, easier is best. Easy is as easy does.
Re: Happy Birthday, FZROX! (Has it Won the Total Market Fund Battle?)
GaryA505 wrote: ↑Sat Sep 07, 2024 2:51 pm
I can consider one other draw back to FZROX. As an instance maintain a big place on this fund in my IRA, which will likely be inherited by my spouse once I “kick the bucket”. So, now let’s imagine Constancy (for no matter cause) decides to shut the fund and return the belongings in money to the IRA. My spouse is “investment-illiterate” and has no want to study something about investing. How does she know what to purchase to interchange it?Because of this, perhaps I need the largest and easiest funds in all of my accounts. You already know, funds which were round for a very long time and are more likely to be round for a very long time.
But when that is allowed in any respect, could not this occur with any fund? I assume all of them have roughly the identical proper to discontinue any specific fund, and tasks when doing so. And when Fido consolidated the entire different whole market funds, it didn’t return funds; IIRC, it consolidated them into FSKAX (which previously had like a $100M minimal funding).
Core 4 w/ nominal bonds & TIPS. Refi Rampage: Buy: 3.875% 30 -> R1 3% 20 -> R2 2.375% 15 -> R3 1.99% 15 -> R4 1.875% 15
Re: Happy Birthday, FZROX! (Has it Won the Total Market Fund Battle?)
Minty wrote: ↑Sat Sep 07, 2024 3:04 pmGaryA505 wrote: ↑Sat Sep 07, 2024 2:51 pm
I can consider one other draw back to FZROX. As an instance maintain a big place on this fund in my IRA, which will likely be inherited by my spouse once I “kick the bucket”. So, now let’s imagine Constancy (for no matter cause) decides to shut the fund and return the belongings in money to the IRA. My spouse is “investment-illiterate” and has no want to study something about investing. How does she know what to purchase to interchange it?Because of this, perhaps I need the largest and easiest funds in all of my accounts. You already know, funds which were round for a very long time and are more likely to be round for a very long time.
But when that is allowed in any respect, could not this occur with any fund? I assume all of them have roughly the identical proper to discontinue any specific fund, and tasks when doing so. And when Fido consolidated the entire different whole market funds, it didn’t return funds; IIRC, it consolidated them into FSKAX (which previously had like a $100M minimal funding).
Sure, hopefully in the event that they discontinued FZROX they’d simply consolidate it into FSKAX.
Get most of it proper and do not make any massive errors. All else being equal, easier is best. Easy is as easy does.
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Re: Happy Birthday, FZROX! (Has it Won the Total Market Fund Battle?)
Minty wrote: ↑Sat Sep 07, 2024 2:40 pm
…Gavinsu, are you, or is anybody else, conscious of conduct by Constancy, Vanguard, Schwab, T. Rowe Worth, or any of the opposite majors, which is perhaps thought to be a “bait and change” within the context of a mutual fund, or accounts holding mutual funds? I do know they alter their insurance policies from time to time, and withdraw companies, however I personally can not recall an instance of a scenario I assumed represented unscrupulousness and self-dealing of the sort that might be represented by no less than the primary and third of those, and perhaps the second…
I agree. For one factor, so far as I can keep in mind, all of them have given very lengthy warnings–like years–before shuttering mutual funds; often first closing the fund to new investments. After which the funds are often terminated by merging them into different, no less than vaguely comparable funds. That’s an annoyance for individuals who particularly needed the traits of the unique fund, however not a disaster.
Years in the past, Vanguard Complete Inventory had an 0.10% ratio, and Constancy’s counterpart has an 0.10% internet, 0.20% gross (i.e. the low ER was backed). There was a number of free discuss “do not belief Constancy, they’ll jack up the ER any time they like,” but it surely by no means occurred.
Annual earnings twenty kilos, annual expenditure nineteen nineteen and 6, outcome happiness; Annual earnings twenty kilos, annual expenditure twenty kilos ought and 6, outcome distress.
Re: Happy Birthday, FZROX! (Has it Won the Total Market Fund Battle?)
Minty wrote: ↑Sat Sep 07, 2024 2:40 pmgavinsiu wrote: ↑Fri Sep 06, 2024 7:13 am
What could be one in every of issues that may happen when you get caught with a portability problem the place it’s a must to understand giant capital acquire to modify? Off the highest of my head
- Constancy modifications the fund’s charge in order that it is now not zero.
- Constancy decides so as to add an energetic part.
- Constancy merge the fund with one other fund.
Gavinsu, are you, or is anybody else, conscious of conduct by Constancy, Vanguard, Schwab, T. Rowe Worth, or any of the opposite majors, which is perhaps thought to be a “bait and change” within the context of a mutual fund, or accounts holding mutual funds? I do know they alter their insurance policies from time to time, and withdraw companies, however I personally can not recall an instance of a scenario I assumed represented unscrupulousness and self-dealing of the sort that might be represented by no less than the primary and third of those, and perhaps the second.
About 10 years in the past Vanguard merged two comparable funds: Vanguard Tax Managed Worldwide and Vanguard Developed Markets Index funds. As described in a Bogleheads wiki article, the best way it occurred was a bit odd:
On April 4, 2014 the Tax-Managed Worldwide Fund absorbed the belongings of the Vanguard Developed Market Index fund (VDMIX). The fund has been renamed because the Vanguard Developed Market Index fund (VDVIX). As a part of the merger, the Tax-Managed Worldwide Fund has adopted the funding goal and the methods of the Developed Markets Index Fund.
You will discover a number of posts about this when you search. For instance:
viewtopic.php?t=124790
viewtopic.php?t=137029
I do not assume it qualifies as a “bait and change” or unscrupulous although there are official causes to be sad about it. Most likely the largest one was that the outdated TMI fund had 100% certified dividend earnings distributions, however the brand new one didn’t and nonetheless doesn’t (73% for 2023, estimated 86% for 2024). If an investor actually needed the unique fund, they ended up caught within the new one as a result of it might be too pricey to promote shares (no less than for long-term buyers with low value foundation shares).
These items can occur. Such is life.
About 70% of my portfolio is in Vanguard funds (not with Vanguard brokerage) so I am not postpone by what occurred.
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Re: Happy Birthday, FZROX! (Has it Won the Total Market Fund Battle?)
ScottW wrote: ↑Fri Sep 06, 2024 7:31 amWhite Coat Investor wrote: ↑Mon Aug 07, 2023 11:21 am
Clearly not apples to apples given the totally different time intervals, but it surely appears considerably totally different and higher to me. Over 5 years, taxes scale back VTI’s return solely from 8.72% to eight.27% whereas over the lifetime of the fund FZROX went from 18 to 14%.This put up is a month outdated, however you are evaluating taxes on distributions (Vanguard) vs taxes on distributions and promoting of shares (Constancy). For those who simply have a look at distributions, Constancy is simply barely worse than Vanguard. They do have small capital features distributions annually which contributes to the distinction.
From Morningstar, the 3-year tax value for VG is 0.37 whereas Constancy is 0.42. They need to have 5-year outcomes later this 12 months.
If we’re arguing vti and fzrox, we have already received. I really personal each, however very barely desire vti for many purposes.
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Re: Happy Birthday, FZROX! (Has it Won the Total Market Fund Battle?)
Minty wrote: ↑Sat Sep 07, 2024 2:40 pm
Gavinsu, are you, or is anybody else, conscious of conduct by Constancy, Vanguard, Schwab, T. Rowe Worth, or any of the opposite majors, which is perhaps thought to be a “bait and change” within the context of a mutual fund, or accounts holding mutual funds? I do know they alter their insurance policies from time to time, and withdraw companies, however I personally can not recall an instance of a scenario I assumed represented unscrupulousness and self-dealing of the sort that might be represented by no less than the primary and third of those, and perhaps the second.
Fund firm do merge funds, this has the impact of burying a poor monitor report. I can not consider an instance off the highest of my head although.
If a mutual fund is absorbing a few of the charges, I’d assume that it might not final ceaselessly and would simply examine the charge with out the absorption with its rivals.
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Re: Happy Birthday, FZROX! (Has it Won the Total Market Fund Battle?)
To this point, I am very proud of the outcomes as in contrast VTI or VXUS. Not prefer it’s a significant distinction although.
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