Vanguard..Dan Wiener ‘I noticed some very, very curious numbers’

a highlight from Dan Wiener’s newsletter, see page 12 for full comments: Adviser201710 ( you can subscribe for a fee)


“Here’s what got me thinking about this: Going over the semiannual reports for the Vanguard funds reporting for the six-month period from November 30, 2016 to May 31, 2017, I noticed some very, very curious numbers. Under the line items for “Reports,” Convertible Securities’ costs jumped 230%, from $10,000 to $33,000, in just six months, even though assets fell 7.4%. Wellington’s costs for reports jumped 221% for its Investor shares and 148% for its Admiral shares, though Investor share assets only grew 2.7% and Admiral share assets grew 8.9% over the period. And then there were these crazy numbers: New Jersey Long-Term TaxExempt’s “report” costs soared 533% for its Investor shares and 1,167% for its Admiral shares. Meanwhile, assets grew just 1.5% and 4.0%, respectively, for the two share classes over the period. And don’t even ask about New Jersey Municipal Money Market, where report costs soared from $4,000 to $126,000, a 3,050% increase. I could go on and on. The numbers are all over the map. “


“What do we know? Well, Vanguard has been under pressure to get its accounting house in order ever since a former employee, lawyer David Danon, filed suit claiming (among other things) that the company has avoided paying taxes on billions of dollars in income.” (THE IRS IS STILL INVESTIGATING THIS CASE GOING ON 5 YEARS)