Money Stuff: The Podcast Another Great Convergence: 7bps, APO, HOOD
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Feb 7, 2025 Dive into Vanguard's ground-breaking fee cuts and what they mean for the investment scene! Discover the intriguing world of private credit trading, including how Apollo is changing the game. Explore the unique investment strategy of 'barbelling' and its impacts. Plus, hear about the collision of betting and finance with event contracts linked to sports, and how liquidity issues reflect historical concerns. It's a rich blend of finance, strategy, and some unexpected surprises!
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Vanguard's Fee Cut
- Vanguard cut fees across 87 mutual funds and ETFs, lowering the average fee to 7 basis points.
- This aggressive move pressures competitors like BlackRock and State Street, which operate under different ownership structures.
Index Funds and Fees
- Index fund investing should be almost free due to scale and technology advancements.
- Vanguard's structure, where investors own the firm, aligns with making indexing low-cost.
Vanguard's Active Management
- Vanguard CEO Salim Ramji emphasizes the company as more than passive index funds, highlighting their actively managed funds.
- He argues that lower fees allow active managers to avoid excessive risk-taking, potentially leading to better long-term performance.