Vanguard Total World ETF: Aligned Incentives and Low Cost

2 months ago

Dan Kaplinger

"Yeah, my approach here was thinking about Vanguard as an organization. There's Invesco and there's Eyesshares which is part of BlackRock, which are some great organizations but most of them are built to generate and derive profit and we love that as investors, right? Vanguard's different. It's owned by investors in the funds that Vanguard creates. And if there's one thing that I love is when management incentives are extremely aligned with the investors. And in this case, it's perfect because the incentives are to build excellent investment products as cheaply as possible. And Vanguard is consistently the lowest cost. So even VT, which is twice as expensive as VO, that S&P 500 index, cost twice as much to invest in it, you still for every thousand you have in the fund, you're only paying 60 a year, right? Six cents for every 100. It's super cheap to invest in Vanguard Funds, and it's an organization that's built to do that."

Dan Kaplinger outlines the unique alignment of Vanguard's management incentives with investors, emphasizing the low-cost structure of Vanguard funds. He points out that despite VT being more expensive than VO in comparative terms, its expense is minimal relative to the investment amount, underscoring its appeal as a diversified core holding for long-term investors.

Related Stocks