Vanguard 2014: A Year in Review

Vanguard Reports Lower Fund and ETF Expense Ratios: Vanguard reported expense reductions on 12 ETFs and 15 mutual funds in December 2014. The expense ratios of ten…


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Vanguard sector ETFs dropped two basis points, from 0.14% to 0.12%. In addition, two actively managed stock funds — Vanguard International Growth Fund and Vanguard U.S. Growth Fund — reported modest reductions in expense ratios.

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Vanguard Issues Long-Term Economic and Investment Outlook

In December 2014, Vanguard published its 2015 economic and investment outlook, which provides the firm’s long-term, global perspectives on the growth rates of the major world economies, inflation, interest rates, and stock and bond returns for the next decade. This publication’s primary objectives are to describe the projected long-term return distributions that contribute to strategic asset allocation decisions and to present the rationale for the ranges and probabilities of potential outcomes.

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Vanguard to Expand Low-Cost Fixed Income Offerings with New Ultra-Short-Term Bond Fund

In November 2014, Vanguard filed a registration statement with the U.S. Securities and Exchange Commission for a new Vanguard Ultra-Short-Term Bond Fund. The new actively managed fund, which is expected to be available in the first quarter of 2015, will round out Vanguard’s taxable bond fund lineup. The fund’s Investor Shares, with an estimated expense ratio of 0.20%, will require a minimum initial investment of $3,000. The fund’s Admiral Shares, with an estimated expense ratio of 0.12%, will require a minimum initial investment of $50,000.

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Vanguard 529 College Savings Plan Passes Considerable Cost Savings to Investors for the Seventh Time

Vanguard announced expense ratio reductions on investments in The Vanguard 529 College Savings Plan, resulting in savings of an estimated $2 million per year for the plan’s more than 250,000 beneficiaries. This is the seventh time that the plan — one of the largest available to college-oriented investors — has reduced costs since its introduction in 2002 and the second time in the past 12 months. The Vanguard 529 College Savings Plan was also named a “gold-rated plan” by Morningstar in its annual ratings for “Best 529 College-Savings Plans for 2014.” In total, expenses ratio reductions were reported on investments in 4 of the 5 of Vanguard full-service 529 plans:

    CollegeInvest Savings Plan for Colorado reduced expense ratios from 0.46% to 0.39% on June 2, 2014
    Vanguard 529 College Savings Plan reduced expense ratios on its three age-based options from 0.21% to 0.19% and on the plans 19 individual actively managed and index portfolios, now ranging from 0.19% to 0.49% on September 3, 2014
    New York’s 529 College Savings Plan reduced expense ratios from 0.17% to 0.16% on October 2, 2014
    College Savings Iowa reduced expense ratios from 0.28% to 0.26% on October 15, 2014

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Vanguard’s Enroll Now Option Makes it Easier to Join 401(k) Plan

Vanguard reported that nearly six in ten of employees who joined their company’s 401(k) retirement plan through the new online Enroll Now process also choose to automatically increase their savings by a modest amount each year, which could boost their retirement savings by 40% — or an additional $100,000 — over 20 years. Enroll Now is a simplified enrollment process that distills the online plan enrollment process into three critical decisions:

    How much to save per paycheck
    Whether to increase that amount annually and by how much
    Which investments to choose

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Many Vanguard Small Business 401(k) Participants Have Plan Investments Professionally Managed

Vanguard Retirement Plan Access 2014 –the small business version of Vanguard’s How America Saves 2014 report on retirement planning trends and behaviors within 401(k) and other defined contribution (DC) plans that Vanguard administers — showed that 76% of participants in small company plans held broadly diversified investments in 2013. More than half of those participants did so through a professionally managed investment option of a target-date fund, another type of balanced fund, or a model portfolio. The report is based on an analysis of the retirement saving and investing behavior of more than 60,000 participants in more than 1,400 small plans served through Vanguard Retirement Plan Access at the end of 2013.

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Vanguard Research Quantifies the Value of Advice

According to Vanguard research, financial advisors can add up to about 3% in net returns for their clients using Vanguard Advisor’s Alpha(TM), a wealth management framework that focuses on portfolio construction, behavioral coaching, and asset location. Putting a value on your value: Quantifying Vanguard Advisor’s Alpha includes seven “quantification modules” summarizing key wealth-management best practices and providing a reasonable framework for describing and further differentiating advisors’ value proposition.

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Vanguard Partners with HelloWallet Financial Wellness Service

Vanguard announced a partnership with HelloWallet, a financial wellness service, to help employees save more for retirement by addressing the money pressures and behaviors that stand in their way. HelloWallet provides personalized, unbiased guidance to individuals on managing their debt, spending wisely, and maximizing their company benefits. Vanguard expects that the service will help many employees become more engaged in managing their finances.

Source: ETFWorld.com


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