Going So Low
Vanguard lowers fees yet again, pushing its average expense ratio down to just six basis points — a move that underscores how dramatically fund costs have fallen over time. Don and Tom contrast this with shockingly expensive ETFs charging double-digit annual fees and explain why those costs are nearly impossible to overcome. They unpack the difference between pure index funds and factor-based funds like Avantis and Dimensional, clarify common confusion around rebalancing and fund-of-funds strategies, answer listener questions about increasing international exposure, and explain why evidence-based investing includes diversification across bonds and real estate — not just stocks. The episode reinforces a core message: fees matter far more than most investors realize, especially the ones they never see.
0:04 Vanguard cuts fees again — average expense ratio now just 0.06%
1:23 Brief detour into model aircraft before returning to money talk
3:43 Fund expense ratios explained — what investors are really paying
5:00 The shock factor: ETFs charging 12%–14% annually
10:08 Why ultra-high expense ratios are nearly impossible to justify
11:13 Vanguard vs. factor funds — why Avantis and Dimensional cost more
14:41 The invisible cost problem — how expense ratios quietly drain returns
16:03 Militia Long Short ETF (ORR) — high fees, no track record
21:02 Listener question: Increasing international exposure inside IRAs
23:03 One fund vs. multiple funds in taxable accounts — rebalancing clarification
24:09 Why Dimensional and Avantis offer mid-cap, REIT, and bond funds
25:51 Evidence-based diversification beyond equities
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