Money Stuff: The Podcast
Another Great Convergence: 7bps, APO, HOOD
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!
28:02
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Quick takeaways
- Vanguard's significant fee reduction to seven basis points demonstrates its dedication to cost efficiency, influencing competitive dynamics within the asset management industry.
- Apollo's exploration of a trading desk for private credit signals a shift towards liquidity and tradability, which may reshape the market landscape for private and public credit.
Deep dives
Vanguard's Significant Fee Cut
Vanguard has announced a major reduction in fees across 87 of its mutual funds and ETFs, bringing the average fee down to just seven basis points. This significant move contrasts sharply with the industry average of 44 basis points, emphasizing Vanguard's commitment to lowering costs for investors. The decision is seen as a strategy to increase competitive pressure on other asset management firms like BlackRock and State Street, which operate differently due to their structures. Vanguard's unique ownership model, where fund investors own the firm, allows them to prioritize fee reductions, leading to a profound impact on the industry landscape.
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