Latest news with #JackBogle
Yahoo
27-05-2025
- Business
- Yahoo
Newly Minted ETFs Buck Vanguard Effect as Fees Hit Record High
(Bloomberg) -- Jack Bogle may have envisioned a world of rock-bottom fees and sleepy index funds — but the ETF market in 2025 looks more like a speculative arcade than a cost-cutting utopia. UAE's AI University Aims to Become Stanford of the Gulf Pacific Coast Highway to Reopen Near Malibu After January Fires The average fee of an exchange-traded fund launched this year has surged to a record 65 basis points, with leveraged trades, cryptocurrency, and active management among the slew of nearly 350 new offerings, according to a Bloomberg Intelligence analysis. That means an investor putting $1,000 to work in an ETF would have to pay $6.50 in annual fees — that's up from last year's average of under $6 and $4 in 2017. Paradoxically, the all-time high costs can be linked back to the race toward lower fees among the highest ranks of the ETF league tables. Fund giants like the Bogle-founded Vanguard Group, BlackRock Inc. and State Street Corp. have spent years slashing fees, or expense ratios, on their index-tracking, core portfolio funds to near zero, in an effort to attract new investors. But as the so-called Vanguard Effect has lowered fees for investors, it in turn has given them the resources to allocate a slice of their portfolios to more expensive, niche funds. 'The scale and efficiency of ultra-low-cost products have helped subsidize the expansion of higher-fee offerings elsewhere, supporting broader innovation and diversification across the ETF landscape,' wrote Bloomberg Intelligence's Athanasios Psarofagis, in a research note. 'As the ETF market matures, issuers are increasingly seeking higher-margin products to bolster profitability.' Among the freshly minted options this year include: the T-REX 2X Long GME Daily Target ETF, which provides 200% of the daily returns of GameStop Corp. with a 1.5% expense ratio, a fund that provides two times the daily price performance of the XRP crypto token charging 189 basis points and a catastrophe bond ETF at 1.58%. For asset managers operating in an already low-margin business, the opportunities for profits are now mostly in offerings that use active management, complex strategies and leverage. Assets in single-stock leveraged ETFs, for example, have climbed to a record $22 billion as of mid-May, according to BI data. The new funds are also 'emblematic of the hard right turn we've seen,' in a market that's home to over 4,000 ETFs, says Ben Johnson, head of client solutions at Morningstar Inc., adding that there's essentially no more room for new equity-index funds. Despite how expensive new ETFs have gotten, when looking across all funds in total asset terms, investors are still paying less. The average asset-weighted expense ratio is falling and hovering around its lowest level on record, according to data compiled by BI. That ratio for all US ETFs is 17.5 basis points, down from roughly 23 basis points just nine years ago. In fact, over half of total ETF assets are held in funds that charge 10 basis points or less. So marks the new phase of the ETF market, whether or not Bogle would have envisioned it. As index behemoths notch new flow records, investors plow unprecedented levels of cash into pricier leveraged, single-stock ETFs. Mark Zuckerberg Loves MAGA Now. Will MAGA Ever Love Him Back? Why Apple Still Hasn't Cracked AI Inside the First Stargate AI Data Center How Coach Handbags Became a Gen Z Status Symbol Millions of Americans Are Obsessed With This Japanese Barbecue Sauce ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
23-05-2025
- Business
- Bloomberg
New Breed of Complex Funds Are Bucking the ‘Vanguard Effect'
Welcome to ETF IQ, a weekly newsletter dedicated to the $14 trillion global ETF industry. I'm Bloomberg News reporter Emily Graffeo, filling in for Katie Greifeld. I won't pretend to know exactly what the late Jack Bogle would say about the ETF market in 2025, but if I had to venture a guess, I'm not sure he'd be thrilled about the fees at least. The average cost of ETFs launched this year has climbed to a record 65 basis points, according to Bloomberg Intelligence, marking a shift from the low-cost gospel Bogle spent his life preaching.
New Straits Times
22-05-2025
- Business
- New Straits Times
Time in the market is more Important than timing the market
Time in the market more important than timing the market INVESTING in the stock market is often seen as a game of strategy and timing. Many investors dream of buying low and selling high, aiming to beat the market by jumping in and out at the moments. However, decades of market data and investor experiences tell a different story: the key to long-term investment success is not in trying to time the market, but in spending time in the market. This concept, championed by investment legends like Warren Buffett and Jack Bogle, emphasises patience, consistency, and long-term thinking. The Myth of Market Timing Market timing involves making buy or sell decisions based on predictions about future market movements. While it sounds appealing in theory, it is extremely difficult to execute consistently in practice. Even professional investors and hedge fund managers, with access to sophisticated tools and research, often struggle to time the market successfully. The reason is simple: markets are inherently unpredictable. They are influenced by a wide array of factors - economic indicators, geopolitical events, investor sentiment, and unexpected news - that can cause sudden and sharp changes. Predicting these events with accuracy and consistency is nearly impossible. Moreover, successful market timing requires two correct decisions: knowing when to get out of the market and when to get back in. Getting one of these decisions wrong can significantly reduce returns. Even missing a few of the best-performing days can drastically impact long-term gains. The Cost of Missing the Best Days Historical data clearly illustrates the danger of missing just a few of the market's best days. For example, research shows that if an investor remained fully invested in the 500 from 2003 to 2022, they would have earned an average annual return of around 9.8 per cent. However, if they missed just the 10 best days during that 20-year period, the return drops to 5.6 per cent. Missing the 20 best days cuts it to just 2.9 per cent. These best-performing days often occur close to market bottoms - exactly when investors, driven by fear, are most likely to exit the market. If you're out of the market during these critical moments, you miss the rebound and the compounding growth that follows. Compound Growth Rewards Patience Time in the market leverages the power of compounding - the process where gains generate more gains over time. Albert Einstein famously referred to compound interest as the eighth wonder of the world because of its exponential potential. But compound growth only works if investments are allowed to grow uninterrupted over time. The longer you stay invested, the more time your money has to grow. Market fluctuations, while inevitable, tend to even out over long periods. Historically, the stock market has always recovered from crashes and downturns, eventually reaching new highs. Investors who stayed invested through events like the 2008 financial crisis or the 2020 Covid-19 crash were ultimately rewarded, while those who panicked and sold often locked in losses and missed the rebound. Emotional Investing is Risky Investing One of the biggest challenges in timing the market is managing emotions. Fear and greed often drive investment decisions, leading to buying during market highs (due to FOMO - fear of missing out) and selling during lows (due to panic). This behaviour is counterproductive and can result in buying high and selling low - the exact opposite of a successful strategy. By focusing on time in the market, investors can reduce the emotional volatility of investing. A long-term perspective encourages a disciplined approach, helping investors stay focused on their goals rather than reacting to short-term noise. Dollar-Cost Averaging and Consistency One practical benefit of time in the market is that it aligns well with consistent investing strategies like dollar-cost averaging. This involves investing a fixed amount of money at regular intervals, regardless of market conditions. Over time, this strategy reduces the risk of investing a large sum at an inopportune moment and can help smooth out the effects of market volatility. Dollar-cost averaging also removes the need to "guess" when is the best time to invest. Instead of trying to time the market, investors commit to a consistent plan that keeps them invested and disciplined. Real-World Lessons from Legendary Investors Warren Buffett, one of the most successful investors in history, has famously said, "Our favourite holding period is forever". He advises against trying to time the market and instead recommends buying shares in fundamentally sound businesses and holding them over the long term. Jack Bogle, founder of Vanguard and pioneer of index investing, advocated for staying the course with low-cost index funds and emphasised the importance of long-term investing over short-term speculation. Their advice is grounded in decades of experience and supported by strong empirical evidence: over long periods, the market tends to reward patience and discipline. Conclusion In the world of investing, trying to time the market may sound like a strategy for maximizing returns, but in reality, it's a high-risk gamble that few can execute well. The unpredictable nature of markets, the high cost of missing the best days, and the emotional toll of frequent buying and selling all make market timing an unreliable strategy. On the other hand, time in the market - staying invested consistently over the long term - harnesses the power of compounding, smooths out volatility, and promotes a disciplined, goal-focused approach. It may not be flashy, but it is a proven, effective strategy that rewards patience and perseverance. For most investors, the path to long-term success is not in chasing market highs and lows but in trusting the process and staying invested for the journey.
Yahoo
03-05-2025
- Business
- Yahoo
4 Vanguard ETFs to Buy With $1,000 and Hold Forever
Low-cost ETFs are an incredible tool and important foundation for a smart portfolio. Vanguard is a pioneer and one of the best providers in the business. These four options below are a great place to start. It's a chaotic time in the market, that's for sure. The roller-coaster ride of 2025 has left many investors feeling confused and not a little bit fearful. Now is exactly the right time to remember that successful investing doesn't have to be complicated. In fact, sticking to the basics and keeping things simple is usually your best bet. Exchange-traded funds (ETFs) are an amazing tool for investors that removes a lot of complexity. For investors looking for a more "set it and forget it" approach, they're hard to beat, and for investors who still want to take an active role in managing their portfolio, they provide an excellent shortcut to diversification. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » While it's far from the only ETF issuer, Vanguard offers some of the best ETFs around. Founded by the legendary Jack Bogle, who pioneered the low-cost index funds that preceded ETFs, Vanguard is trusted by millions of investors and manages more than $10 trillion in assets. And critically, its ETFs are generally extremely low-cost. The cost to own an ETF is revealed by its expense ratio, which is the percentage of the total value of your investment that the issuer collects in fees. For example, if you have $100 invested in an ETF with an expense ratio of 1%, it would cost you $1 per year to own. Let's take a look at four Vanguard ETFs that are a great addition to any portfolio. 1. Vanguard S&P 500 ETF (NYSEMKT: VOO) This is a broad market ETF covering the S&P 500. With one investment, you gain exposure to the 500 largest U.S companies by market capitalization. This is a great place to start for a broad market ETF. While its sibling, the Vanguard Total Stock Market Index Fund ETF, is also a great option and provides even more diversification, especially with smaller-cap companies, VOO is one of the most popular ETFs on the market for a reason and has the slight edge in performance. Also, it is extremely low-cost. With an expense ratio of just 0.03%, the management fees are negligible. With $1,000 invested, you are paying just $3 in annual fees. 2. Vanguard FTSE Developed Markets ETF (NYSEMKT: VEA) This ETF provides exposure to developed markets outside of the U.S., like Western Europe, Japan, and Australia. It's a nice counterpoint to most ETFs that are focused on U.S. companies. Diversifying outside of the U.S. market is important, but an element that many investors overlook. This ETF also has an expense ratio of just 0.03%. 3. Vanguard Information Technology ETF (NYSEMKT: VGT) This ETF is a little different from the previous two in that it doesn't seek to cover a broad swath of the market; rather, it provides exposure to a focused section of the market. If you believe that AI, robotics, quantum computing, and other technologies will drive the future, this is the Vanguard ETF for you. The fund is invested in more than 300 of the most promising names in tech, large and small, though it is heavily weighted toward the heavy hitters like Nvidia. Since the Information Technology ETF is more focused than the previous two, it is a little bit more expensive. However, at 0.09%, the ETF is still much cheaper than many of its competitors. The ARK Innovation ETF, for instance, has an expense ratio of 0.75%. 4. Vanguard Total Bond Market ETF (NASDAQ: BND) Bonds are an important part of a well-diversified portfolio. The security and stability they provide are invaluable when the stock market is as chaotic as it has been recently -- although it's important to know they're not without risk. This option from Vanguard offers exposure to a broad basket of government and corporate bonds with varying maturity dates, balancing security and yield. And, like the others, it is cheap. Its expense ratio is, once again, just 0.03%. By building a portfolio foundation that includes these four low-cost Vanguard ETFs, investors can better navigate the current market with confidence while maintaining an eye for growth. And while they are a great place to start, they're far from the only options. If you opt for other funds, just make sure you pay attention to their expense ratios; you don't want high costs to eat into your returns. Before you buy stock in Vanguard S&P 500 ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Vanguard S&P 500 ETF wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $623,685!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $701,781!* Now, it's worth noting Stock Advisor's total average return is 906% — a market-crushing outperformance compared to 164% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of April 28, 2025 Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia, Vanguard S&P 500 ETF, Vanguard Tax-Managed Funds-Vanguard Ftse Developed Markets ETF, Vanguard Total Bond Market ETF, and Vanguard Total Stock Market ETF. The Motley Fool has a disclosure policy. 4 Vanguard ETFs to Buy With $1,000 and Hold Forever was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
29-03-2025
- Business
- Yahoo
Vanguard Said to Eye Blackstone, Carlyle Pact to Offer Private Assets
The Vanguard Group, known for its passive, low-cost mutual funds and ETFs, has reportedly held talks with two of the world's biggest private equity companies about offering private assets to investors. Vanguard, which manages $3.1 trillion in 88 U.S.-issued ETFs, in recent months has discussed private asset agreements with Blackstone Inc. (BX) and Carlyle Group Inc. (CG), Bloomberg reported, citing sources familiar with the talks. No deal to market private assets jointly with Carlyle or Blackstone has been finalized, Bloomberg reported, and none of the firms commented on the anonymously sourced story. Vanguard has long been known as the everyman's investing partner, with a large choice of passive, low-cost mutual and exchange-traded funds and thousands of followers called "Bogleheads" after the company's founder, Jack Bogle. While a tie-up with an elite, white-shoe financial firm may or may not challenge that reputation, the suggestion of such comes as a surprise to the firm's long-time watchers. 'It seems out of left field,' Senior ETF Analyst Sumit Roy said. Roy noted that while Vanguard doesn't permit trading of spot bitcoin ETFs because it feels they aren't appropriate for long-term portfolios, questions remain about whether private assets 'are appropriate for individual investors and, if they are, how those assets are offered to individuals.' The suitability of private assets in ETFs was raised earlier this year after State Street and Global Management launched the SPDR SSGA Apollo IG Public & Private Credit ETF (PRIV) which aims to invest in private credit among other instruments. A day after the fund launched, the Securities and Exchange Commission raised concerns over the fund's liquidity risk management program and the use of Apollo in its name. Vanguard, with $10.4 trillion in assets, currently offers private equity to clients through a pact with HarbourVest, Bloomberg said, adding that the partnership manages $2.4 billion as of the end of last year. 'It's like letting the low cost fox inside the high cost hen house,' Bloomberg ETF analyst Eric Balchunas tweeted, adding that 'ETFs could threaten revenue while exposing the mark to magic system.'Permalink | © Copyright 2025 All rights reserved Sign in to access your portfolio
