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Weekend reading: Woodford is done, Brexit isn’t, but at least Vanguard is cutting fees

Weekend reading logo

What caught my eye this week.

Nobody beats Vanguard for low-cost product innovation. However the fund giant isn’t the most proactive when it comes to promotion.

For instance, wouldn’t you agree it’d be worth throwing a measly gazillionth of your turnover in the direction of a UK blog that has championed passive investing for a decade and makes diddly squat from those particular efforts?

If you were, you know, the largest provider of passive index funds in the world? And thus with the most to gain from there being an independent voice making the case for passive investing in a country where until recently almost nobody else did?

In a world where the only fund advertisers that really pay are active managers?

I know, right?

Go figure, as they might say.

Cut and dried case

My grumbling aside, you have to applaud the timing of Vanguard’s latest price cuts.

The implosion of super-slumped fund manager Neil Woodford continues. People like Robin Powell are daily urging journalists to encourage more readers towards index funds.

And now here’s Vanguard with an easy story to write about even lower charges.

To quote CityWire:

Vanguard’s 22-strong index fund line up will now levy an average of 0.15%, with its 13 ETFs on 0.1%.

Combined, the average OCF across its passive funds is now 0.14%, down from 0.19% previously.

The OCF on Vanguard’s UK Gilt ETF has dropped from 0.12% to 0.07%, on its US$ Corporate Bond 1-3 Year Bond ETF from 0.15% to 0.09%, while its FTSE Emerging Markets ETF is now 0.22%, down from 0.25%.

ThisIsMoney says we haven’t entirely got Woodford to thank:

From today, savers in these ‘robot’ funds will pay an average annual management fee of 0.2 per cent of the amount they have saved – and as little as 0.06 per cent.

Many investors in Woodford’s doomed flagship Equity Income fund had been paying 0.75 per cent until his empire collapsed last week.

Vanguard was planning to make its move before the Woodford debacle, in which thousands of investors have been denied access to their money since June while continuing to pay millions of pounds in management fees.

But the American firm, which runs around £100bn in the UK, is hoping the negative publicity surrounding the downfall of Britain’s most feted stockpicker may encourage more savers to switch to cheaper tracker funds.

Have you decided to go fully passive? Get started at our passive investing HQ.

From Monevator

10-year retrospective: UK-dedicated passive investors pay the price of home bias – Monevator

From the archive-ator: They don’t tax free time – Monevator


Note: Some links are Google search results – in PC/desktop view you can click to read the piece without being a paid subscriber. Try privacy/incognito mode to avoid cookies. Consider subscribing if you read them a lot!1

Over-50s savers to get new updates and alerts on their retirement pots from next week – ThisIsMoney

Retailers cut 85,000 jobs in the past year – Guardian

A mortgage lenders trade body […] claims buying a home will leave you far better off versus renting, even if house prices never rise – ThisIsMoney

Peer-to-peer lender Funding Secure goes into administration – Guardian

[Click to enlarge the megalopoleis]

The world’s top cities in 2035 by GDP, population, and economic growth – Visual Capitalist

Products and services

If cash is becoming obsolete, why are citizens in rich countries holding ever more of it? – Yahoo Finance

Start-up Penfold sets up self-employed pensions in five minutes, but looks pricey versus DIY – ThisIsMoney

Ratesetter will pay you £100 [and me a cash bonus] if you invest £1,000 for a year – Ratesetter

Nationwide scraps loyalty accounts held by 1.6m, offers its members 1.5% bonds – ThisIsMoney

Seaside destinations dominate the top 20 most popular places to search for a home – ThisIsMoney

Homes for sale on islands [Gallery]Guardian

Comment and opinion

Save lots, spend little… how a shop caretaker built an $8m fortune [Search result]FT

Revisiting the ’87 Crash – Novel Investor

Psychology and the good life – Humble Dollar

Long shot – Indeedably

How to measure your portfolio’s returns [with spreadsheet]UK Value Investor

Ignore your portfolio to avoid falling for ‘regret aversion’ – Klement on Investing

How much time should you spend on your finances? – A Wealth of Common Sense

The things we do for work – The Simple Dollar

Naughty corner: Active antics

Angel investing in the UK: Some examples of what happened next  – Fire V London

Useful biases – Morgan Housel

Looking for great share tips? Join the club [Search result]FT

Glamour stocks have been on an historic tear, but are they starting to fade? – Yahoo Finance

Value hasn’t done so badly – as long as you’ve not been shorting growth – Bloomberg Newswire

The US yield curve has now ‘uninverted’ – Wisdom Tree

Remember when active share was the key to finding alpha? Forget about it – Alpha Architect

Malinvestment mini-special

WeWork’s implosion shows how SoftBank is breaking the world – Vice

WeWork, Neil Woodford and the modern ‘bezzle’ [Search result]FT

Howard Marks warns in his latest letter that negative rates are an unknown quantity –  Market Folly

Ben Inker of GMO: Good returns have to be paid back sometime [Podcast]Meb Faber


Look, I understand there were some principled sovereignty-based reasons to vote Leave. But does the end (let alone the rubbish economics) justify these means?

We have a prime minister who said he’d never ask for an extension (he has), who said we’d be out by 31 October (we won’t), and who insisted no Conservative prime minister would ever allow a customs border in the Irish Sea (he’s agreed one, turning the hated ‘backstop’ into a feature not a bug).

This isn’t about Project Pangloss versus Project Fear. It’s the leader of our country making promises he knows from day one cannot be achieved, to weaponize your anger that Brexit hasn’t been delivered. He wants you to blame his opponents for doing their job, as he knew they would.

He is playing Leavers like a fiddle.

This stuff has consequences. The fact that more moderate Tory candidates who told the truth didn’t get his job is just the least of them.

British journalists have become part of Johnson’s fake news machine – Open Democracy UK

Most voters think violence is ‘a price to worth paying’ for their Brexit preference… – Guardian

…or do they? – Twitter debunk of same survey

LOL: Production of Brexit 50p coin paused amid exit uncertainty – Guardian

‘According to some reports, Brexit coins minted with the 31 October date “could be worth up to £800”. So could €1 coins, soon enough.’– Marina Hyde

But seriously, Brexit is no laughing matter. No, Brexit is hysterical – Politico

Kindle book bargains

Fooled by Randomness by Nassim Nicholas Taleb – £1.99 on Kindle

Who Moved My Cheese? by Dr Spencer Johnson – £0.99 on Kindle

Grit: The Power of Passion and Perseverance by Angela Duckworth – £0.99 on Kindle

Little Black Book: A Toolkit for Working Women by Otegha Uwagba – £0.99 on Kindle

Off our beat

‘Gladiators … ready!’ Whatever became of Wolf, Jet, Rhino, and the show’s other stars? – Guardian

Waitrose and John Lewis to stop putting plastic toys in Christmas crackers – BBC

The difference between US and UK ingredients are disturbing [Bit old]Ron Project

‘Respect is given’: Australia closes climb on sacred Uluru – Guardian

Do today’s global protests have anything in common? – BBC

And finally…

“Mr Spock would be a natural trader. That’s because, of course, he has no emotions – and being emotionless is exactly what you need in the markets.”
Robbie Burns, The Naked Trader

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Comments on this entry are closed.

  • 1 Algernond October 25, 2019, 9:11 pm

    Pah! Don’t think VWRL ETF has come down enough (0.22%); a whole 0.1% extra for 10% exposure to emerging markets. Will have to think of splitting into Developed-World (0.12%) and Emerging markets (0.22%) seperately. What a palaver.

  • 2 Brod October 26, 2019, 10:00 am

    @Algernond – that’s what I do. Own the cheapest funds for UK, US, Eur-UK, etc. But it only saves about 0.1% p.a. so don’t really think it’s worth the hassle. But it does allow me to overweight EM and underweight US. We shall see if that’s a wise decision.

  • 3 A Betta Investor October 26, 2019, 10:25 am

    It is actually more complex than “active funds are the only ones that advertise”.
    Because the FCA doesn’t trust individual investors to make the right decisions about their money it does not allow funds to be marketed directly to the public. It much prefers them to use intermediaries and only allows generic brand advertising.
    No fund is allowed to market itself to the public as having, say, a low PTR because of the way it is run.
    Intermediaries have less interest in costs that their clients pay than they do about their career risks so they play safe and only recommend funds that they feel comfortable with, i.e. have read about in the Sunday paper, seen the manager at a conference or been around for a long time and has a good “reputation”. They won’t ask detailed questions about process because they are frightened they won’t understand the answer, no IFA studies balance sheets or cash flow statements, it’s not their job. Clients think IFAs can select managers that do, but no one can second guess how someone else thinks. And if you don’t know what is involved how can you make a selection?
    No rugby team would allow selection of its players by someone who doesn’t know how to play the game.
    At heart it is the perennial problem of agency v principal.
    The classic example was Laker Airways. It went bust for a variety of reasons but one was that its competitors, Pan Am, BOAC etc paid travel agents bigger commissions.
    Once direct sales were allowed budget airlines flourished and everyone is better off, well except Pan Am and TWA.
    One day it will happen in finance, but it needs a champion.
    Disintermediate, disintermediate, disintermediate as a Dalek private investor might say.

  • 4 Gary Cooper October 26, 2019, 10:32 am

    @Algernond I have taken the 2 etf route.
    HMWO (0.15%) and EMIM (0.18%) both follow MCSI index . This WAS cheaper than the vanguard mix.
    Mixing VEVE and EMIM would be cheaper but heavy S Korea as VEVE follows the FTSE indexing and includes S Korea as a developed market.

  • 5 The Investor October 26, 2019, 11:17 am

    @A Betta Investor — Thanks for sharing that comprehensive view. However as you may recall I don’t really see it the same way you do. From memory, I pointed out counter-examples last time and you said they could afford to risk running close to the regulatory rules because they were very large companies who could contest the matter if required (as opposed to small start-up funds). Even if that were true — I am not convinced the regulation acts exactly as you describe — then Vanguard would fit into that category anyway.

    But it’s all irrelevant because Vanguard does run advertising. I’ve seen it. They could chuck a pittance (for them) here, say a couple of grand a month, and it would transform the economics of running this website.

    We don’t make £0 out of Monevator, nowadays it (just about) pays its way versus, say, providing the same content for established media etc. But I’d much prefer the monetization alignment to be closer to the site’s ideals.

    Anyway not trying to start one of those threads where everyone (kindly! 🙂 ) tells me to start a Patreon and so on. I probably should, but have qualms.

    Was just having a one-to-one moan at Vanguard. 😉

  • 6 Richard October 26, 2019, 11:42 am

    Surely if they started ‘sponsoring’ you, you would lose the right to call yourself independent. I mean they would expect to be able to measure the benefit their spend generated which would mean promoting their products etc. That said, you deserve to earn something out of all the great content. And therein lies the monetisation dilemma.

  • 7 Naeclue October 26, 2019, 11:52 am

    We have always held separate regional trackers. Part of the reason was that world trackers have historically been expensive but another part is that we receive dividends on US shares free of the 15% withholding tax by holding US listed ETFs in our SIPPs. .

    Unfortunately retail investors can no longer buy US listed ETFs due to some very annoying regulations, but can continue to hold those they already have.

    Holding a set of regional trackers is complicated though and if starting now I would probably just hold developed world and emerging market trackers.

  • 8 gadgetmind October 26, 2019, 11:57 am

    OK, it’s a bit Brexit, but I just spotted this breakdown of the 72 EU laws that we had to adopt despite voting against them. Yes, just 72 out of 4514 laws that the EU influenced, and none of them come across as being outright crazy (understatement!).


  • 9 The Investor October 26, 2019, 12:33 pm

    @Richard — Don’t agree at all. The whole world runs on advertising, for good or ill, including dozens of services you and other readers doubtless interact with every day (from Google to Facebook to ITV).

    I’m not proposing they start sponsoring us, I’m talking about replacing one of the ad blocks on the site with a banner advert from Vanguard, a company that is 100% congruent with the main message of this site. As it is, most of the time those ads are serving ads from active fund managers (and sometimes more dubious financial services companies, despite my inserting blocks at the Adsense control level).

    We’ve been multiple times accused for being a ‘front for Vanguard’ over the years, so that’s pretty ironic, too. Plus we have charmers like regular comment troll @Neverland decrying any monetization we do actually do, seemingly believing that the 30-50+ man hours that goes into this site a week should be done for free. 😐

    So all in all, I could live with myself if Vanguard advertised with us. 🙂

  • 10 Richard October 26, 2019, 1:10 pm

    @TI ah, i read it that you wanted them to throw some money at you. A bit like influencers on youtube do. Not that you just wanted to surface their ads on your website in the a similar manner to today. I agree, that is much less of an issue when it comes to staying independent :).

  • 11 Passive Investor October 26, 2019, 1:18 pm

    @TI. everyone said Boris wasn’t looking for a deal and wouldn’t get one if he tried – ‘Unicorn Hunting’ was the term. Anyway he did and while the DUP may not like it David Trimble doesn’t have a problem. If as seems likely we don’t get our on 31st this will be entirely due to a Remain Parliament and completely cynical leader of the opposition who won’t accept Loser’s Consent. They call him a dishonest dictator while refusing an election and forgetting their own broken promises about failing to respect the Referendum and the manifestos they were elected on in 2017.

  • 12 Atlanticspan October 26, 2019, 1:49 pm

    Hi, I’m not sure whether this piece has been posted on here, but I found this article on Charlie Munger really interesting and helpful.

  • 13 RIT October 26, 2019, 2:02 pm

    @Passive Investor
    I don’t see a remain parliament. I see a parliament that wants multiple Brexit varieties and a single remain variety none of which have a majority. The problem was the referendum promised whatever Brexit we as individuals could dream up meaning 17.4M different Brexit varieties were voted for. Everything from cake and eat it to no deal with every combination in between. The root cause is a poor referendum question not parliament.

    I agree that Corbyn seems to have managed this poorly but I don’t see him not consenting to Brexit. He’s just not consenting to the Tories right version of Brexit. I think the issue here is that he wants a much more left Brexit possibly even as left as EEA/EFTA (given he seems to want CU/SM). Why he just doesn’t say it though is beyond me.

    If EEA/EFTA plus a fix for NI/RoI border was put on the table I would suggest a majority in parliament probably exists. It would also seem reasonable given the close 48:52 vote. Let’s do that for a few years and then decide what to do next in either direction. Of course the ERG / Cummings don’t want that so we are where we are.

    The problem I have is that I’m still trying to figure out a single net benefit of leaving. If I could get some benefits then maybe I too could get behind leave. I’ve asked many but I’m yet to have a Brexiteer give me one that couldn’t be implemented within the current EU membership we have so I’m still with remain for now.

  • 14 Mark October 26, 2019, 2:06 pm

    Have always used passive funds. I am content with the risk/reward. Not sure Woodfords fanboys can say the same.

    As to Brexit. I think Boris is playing both sides fantastically. I agree with your comments about the leavers, but he has the retainers completely boxed into a lose/lose corner and has vilified them in the eyes of the public. I suspect a large majority for Boris at the next election with Labour in tatters and the Lib Dems and SNP as the opposition. I say all of this as an objective (ish!) observer who voted remain and is no supporter of Boris Johnson. I am however no longer a supporter of remain due to the behaviour of the EU and our own Parliament. The whole thing is a mess and we will all be the victims either way.

  • 15 The Investor October 26, 2019, 2:21 pm

    @Passive Investor — I agree with everything @RIT said. Plus as is standard you’ve conveniently forgotten to mention that ERG Tories voted several times against Theresa May’s (less bad in my view, but we can differ on that) Brexit deal. A deal that many of the ‘Remain Tories’ voted for.

    Of course you will give this or that reason why they didn’t like that Brexit, but to @RIT’s point those voting against this deal have their very reasonable reasons to vote against it.

    The fact is that if the Conservative party *as a whole* ‘respected’ the result of the 2016 *advisory* referendum and the very close result it delivered, then we’d already have Brexit. Some in the party wanted to go much further, and hence we are where we are.

    They might try to deflect the blame. I’m not so easily duped.

  • 16 Passive Investor October 26, 2019, 2:25 pm

    @TI. I can’t find it now but there is a nice graphic floating round the internet indicating that the majority of the current MPs are for remain. Some of those like Caroline Flint are prepared to vote for a deal but most aren’t.
    I think you are far too kind about Corbyn who flip flops his policy for whatever he sees as to his electoral advantage.
    Although I am one of the ‘sovereignty Brexiters’ you kindly acknowledge at the top of your piece there are economic analyses out there that indicate benefits from leaving the EU – provided we can leave the customs union and get trade deals from non EU countries.
    Finally much is made by Remain about the uncertainty of what Brexit we’ll get. There is just as much uncertainty though about what Remain will entail – no one surely believes that the EU in 10 years time will look the same as today.
    This is rather disjointed as I type this on a train travelling through France indicating I hope that there is nothing inconsistent about being Franco and Europhile (culturally) but pro-Brexit politically.

  • 17 RIT October 26, 2019, 2:26 pm

    It’s the UK leaving the club not them kicking us out. On day 1 Barnier shared a simple slide that showed what options the UK had available to it showing everything from remain in the EU through to no deal. We also knew that before the referendum as it’s not rocket science. We had a pick’n’mix of options available to us and just had to pick one depending on what we were trying to achieve. It’s been us who’s been unable to decide not the EU.

    The EU then agreed a deal with the UK. Then we said no we don’t like what we agreed can we try again. Under some frustration they then agreed a new different deal.

    Then because we’re incompetent the EU have had to give us a homework extension and now look like they’re giving us another one.

    Given the EU’s size which requires strong process and not personalities I’d say the EU has done about all they could.

    What should the EU have done differently?

  • 18 FlyByNight October 26, 2019, 3:28 pm

    @gadgetmind – thanks for sharing the link. One wonders if this is the list of things which will be de-regulated once we leave.

    It’s scary to think we could end up with worse food labelling, reduced animal welfare / harmful agriculture, reduced workers rights, and less regulatory protection. 2, 24, and 25 will need to go to get a US trade deal.

    I wonder how many people in the UK would read that list and think they were mostly reasonable things we should have voted for?

  • 19 Andrew October 26, 2019, 3:42 pm

    Have you ever considered adding a donate button to the site, you might be pleasantly surprised.

  • 20 ZXSpectrum48k October 26, 2019, 3:42 pm

    I must admit, unlike TI, I don’t understand the sovereignty argument for Brexit at all. Where sovereignty is located, whether in Brussels, Westminster or with the decrepit members of my Parish council, is arbitrary and irrelevant. It makes no difference to the end game.

    The 20th century nation-state is incapable of addressing 21st century transnational problems like climate change, terrorism, and the impact of machine learning and AI. It will not protect a mythical ‘national culture’ from outside influences. Protectionism and a reduction of immigration will not make us wealthier or improve wages. The best that most UK citizens can hope for is a managed decline in their living standards, relative to global levels. None of these issues we face are the fault of the EU or globalization. It’s just technological change.

  • 21 The Investor October 26, 2019, 4:08 pm

    As I’ve said before, I don’t agree that sovereignty is a sufficient motivation for Brexit, but unlike most Leave motivations (along with nationalism, racism, and a protest vote by their own limited terms, and no, not all Leavers etc) it is at least intellectually coherent.

    Repatriating full sovereignty from EU does give us more/sort-of-full ‘control’ of our borders and laws. Agreeing with that doesn’t mean I think we lack sufficient ‘control’ in these areas today — and I agree leaving the EU in practical terms gives us less power and influence. We’ll likely still follow most of their supposedly irksome regulations for trading reasons. We won’t be able to influence them. And so on. In the past I’ve called it ‘technically greater sovereignty’ for that reason. 🙂

    Also agree with you that the challenges facing the UK are pretty much at the opposite end of the spectrum from leaving the EU, with the possible exception of present/past migration. Again doesn’t mean *I* personally think migration is bad, or out of control or whatever. But it was clearly too much for some (/many) people and that’s a problem in democracy that governs by consensus. And again, not sufficient reason for me to vote Leave, but an acknowledgement it’s been an issue.

    What we’ve all learned ad naseum — and my comments in the post reflect — is that a large proportion of the Leave vote isn’t interested at all in realities, for whatever reason. It’s an emotional project from the heart.

    Hence you get them supporting a leader who has for example just thrown his Northern Irish partners and potentially the Union under the bus, weeks after saying no Tory leader would do so. Hence you get them blaming MPs for voting against a Hard Brexit without equally blaming ultra Tory MPs for voting against Theresa May’s slightly softer Hard Brexit. Hence you get people *still* arguing there will somehow be economic benefits from Leaving, despite overwhelming consensus there won’t be, the laws of capitalism, and common sense.

    That’s not to say Brexit won’t be economically beneficial for some, but IMHO it pretty much cannot be for the country as a whole. It’s one of the surest bets one could make in macroeconomics right now.

    Again, before anyone says it that doesn’t mean I think it will be an economic catastrophe, either. It will just be slightly lower GDP forever.

    Leavers won’t care, just like they don’t care about the c.£100bn or so of GDP we’ve probably lost as a result of the faff of the past three and a half years. It gets lost in the noise, and given they can blame others in the face of clear facts (e.g. ERG voting against Brexit but not getting blamed for it) there’s no chance of making the argument that a 0.2% lower GDP (say) was due to Leaving.

  • 22 The Investor October 26, 2019, 4:15 pm

    p.s. Re-reading that, I suppose I should caveat that if we go for full deregulation and throw half the population (much of which voted for Brexit) and the environment into the dustbin then I guess we could juice GDP to offset leaving brilliant trading terms with our closest and largest market. There would be a social and probably environmental cost and this is assuming we could get away with it and still agree a decent deal with the EU, who isn’t likely to want a race-to-the-bottom sweatshop on its Western border.

    But if you’re a strong laissez-faire Ayn Rand-ian capitalist I guess you might consider that a price well worth paying for the success of some of the population in an increasingly competitive world.

  • 23 RIT October 26, 2019, 4:29 pm

    I think your p.s. is the end game that is being chased. I make that hypothesis from the US trade deal possibility driving what can be in the WA/PD and the state of the current modified WA/PD.

    I’m on the fence whether to again leave the UK or not. Some international friends have already decided they’re out and have either already left or are in the process of leaving. If your p.s. transpires I know we will 100% be gone. I have no interest in living in a society where through a single accident you can be ruined financially for life or where environmental projects / technologies are not pursued because it’s cheaper to burn dinosaur fuel rather than being pursued because it’s right to name but two.

  • 24 Jonathan October 26, 2019, 4:38 pm

    “… I hope that there is nothing inconsistent about being Franco and Europhile (culturally) but pro-Brexit politically”.

    For me there most certainly would be. I see the whole basis of the EU to be recognising our shared cultures and values and realising they don’t just provide the possibility of tourism: it is exactly those that create the potential for a commonality of purpose for member countries to provide mutual support and create a political and economic block that can stand up to the domineering tendencies of both China and the US.

    I can understand Leavers’ frustration with the rather clunky decision-making processes of the EU, but at least we are part of those (the reason that they are clunky is that they were designed to ensure every single member country is part of every decision). But outside the EU the UK will have in practice to align broadly with one of the major trading and regulatory blocks, and the Leave movement ought to come clean about which. And explain why taking either US or Chinese rules without any say whatever in them would be better than the existing EU rules which the UK played a part in establishing (e.g. the Single Market for example largely reflected a UK initiative).

    The other consequence of shared culture and values is Remainers’ belief that co-operation and friendship is better than distrust and divisiveness. Since the establishment of the original Common Market there has been a 70-year period without war between neighbouring European countries (who are members); in historical terms that is an immense achievement which should surely easily compensate for the minor clunkiness.

  • 25 Old_eyes October 26, 2019, 4:59 pm

    @Passive Investor. As has often been said, you are entitled to your own opinions, but not your own facts. The reason we haven’t left yet is Boris and the Brexit Ultras consistently voted against the May deal. Johnson has got a different deal by the simple expedient of removing the backstop and replacing it with a semi-permanent customs border between GB and NI. If you remember that was the original EU offer, but only as a backstop if required, not as a structural feature.

    We know the ultras were briefed that there was still a way of getting no deal at the end of the transition period, and that the ‘deal’ was set up to prevent Parliament asking for a further extension in the event of no FTA being signed in that 14 month period. In addition, the WAB is full of executive powers to allow the Government to decide all sorts of laws without involving Parliament at all. And we have discovered from leaked documents that the environmental and workers rights alignment was specifically moved from the WAB to the Political Declaration so that a future Government could diverge ( and there goes your easy FTA with the EU).

    Government’s own analysis says that something of the shape of Johnson’s plans would have a negative effect on GDP growth of about 7%. The studies suggest that the FTA’s on offer outside the EU would be worth less than 1%.

    Where we are is entirely on Johnson and his mates. They voted against May’s deal without having an alternative they could agree on. They forced a leadership contest when we had a tight timetable. They came up with the whizzo scheme to prorogue Parliament to prevent debate. They tried to ram through a massive and complex piece of legislation with a generational impact in 3 days. They are refusing to release the required impact assessments (assuming they even exist). Now they are throwing a sulk because they can’t get their own way.

    Whatever is stopping your desired Brexit from happening it is not a remain Parliament!

  • 26 JimJim October 26, 2019, 5:51 pm

    Whilst I have no doubt at all that your independence would be skewed by a nice fat advertisement deal, surely the smaller the advertising budget for any ETF provider, the smaller the fees possible, which, is what we are after in passive investing? You seem to use Vanguard as a bench mark quite often – They probably take you for granted as a convert, spreading the gospel for free. I would love you to benefit from Vanguard as I appreciate greatly your weekly input, but if that means higher fees from Vanguard, perhaps the golden goose is best left to it’s own devices. (at this moment I have zero Vanguard, but it makes so much sense I will crumble soon, possibly if they advertise with you 😉 )
    Double edged sword

  • 27 Grislybear October 26, 2019, 6:33 pm

    The problem with diverging from EU regulations is that it reduces trade with the EU and whats going to replace it. There is a lot of noise about new trade deals with countries outside the EU but where are they. The big one is going to be a trade deal with the US, Trump is like Boris talks a big game but then nothing to show for it. The trade deal with the US might turn out like Trumps wall , big talk but nothing there ( to date construction of 13 miles of a new wall have started, the border is 2000 miles long)

  • 28 Indecisive October 26, 2019, 7:14 pm

    @TI You asked the chief executive of a bank for a mortgage. Why not ask the boss of Vanguard for a deal?

  • 29 Matthew October 26, 2019, 9:22 pm

    A large proportion of brexiteers have no interest in whats best for the country, which is why economic doom won’t work – we had plenty of warning before the referendum that it’d be bad, and few brexiteers actuallly believed the 350m figure or even cared about it – what it’s really about is restricting the supply of cheap unskilled labour, and restraining demand on housing – and even though we haven’t left yet, even this state of limbo has achieved a reduction in unskilled immigration, unskilled wages have increased faster because to coax the british off of benefits into jobs they don’t normally want takes even higher wages. Whatever happens, the uk will feel less hospitable now to this competition.

    Brexiteers had to assess how vulnerable they believed their job actually was, and it tends to be the less educated because it is the unskilled jobs that stand to have these shortages and thus need to increase wages. It is like a strike, restraining the supply of workers to force an increase in wages – but unlike a strike its not your own labour you’re restraining.

    The elderly did indeed have their grandchildren in mind, trying to game the labour market in their favour. It’s not important to these goals whether the union stays intact and it almost makes more sense to allow scotland to go and take themselves out of westminster, or England to leave the UK.

    This brexit limbo did also achieve the goal of shaking up the system. Nobody before the referendum seriously expected we would actually be allowed to leave, and were probably pleasantly surprised it has been taken seriously, and the referendum simply exposed the undercurrent that already existed.

    Also this limbo means we will gradually become relitively deregulated if we are unable to pass laws, government will be less able to interfere and parties won’t bother so much with spending pledges if leave vs remain replaces left vs right, so we will drift more into an austere capitalist society

    Re: vanguard – when you’re right you don’t need to sell it yourself because everyone else naturally will. Also what would it achieve to pay money to people who were promoting them for free?

  • 30 B0b October 26, 2019, 9:30 pm

    MV I am ashamed. In my ill informed and thoughtless way I assumed that Monevator was put together between loading the dishwasher and watching Emmerdale. It really should have been obvious to even room temperature IQs that it took much more work. I would definitely contribute if you think of a way. Alternatively I can send home made fruit bread.

  • 31 The Investor October 26, 2019, 10:16 pm

    @Bob — Hah, cheers. 🙂

    For context, @TA has worked a 6-10+ weekend day about 45 out of 52 weekends on Monevator every year for the past 6-7 years. For much of the past three years or so this has been on our still-not-ready book (as much my fault it’s late now) so that doesn’t necessarily show up in his posting volume. The book is a corker though. I’ve read it. Twice!)

    For my part — until the last year or three when Brexit, trolls, and my active investing divergence with the modus operandi of the site saw me dial things back a bit — I was doing 1-3 days a week on writing for the site and 0.5 to 1 day a week on general admin, commenting etc. Obviously it’s lumpy — when we redesigned (invisibly!) the site design to be responsive etc it was a couple of weeks work but spread over a few months (plus about the same for a designer friend who helped…)

    Just managing comments even at quiet times requires 10-12 logins a day, though sometimes only for a minute or two at a time. (People forget there’s an archive of around 1,500 posts that get new comments… the broker table thread is now up to well over 2,000 comments alone). I’ve written well over 4,000 comments in reply to readers, and few of them have been short! 🙂

    As I said up top this isn’t really a doom and gloom moan this week. We do make some money from Monevator now, and while the entire enterprise has been a waste of time from a pure ROI point of view compared to numerous other things either of us could have been doing, it has (a) repaid buckets in the great appreciative and hugely welcome emails we receive all the time from people we’ve helped (rarely vocal commenters but there we go) and (b) does bring in enough money to cover most of @TA’s time (ignoring the fact it’s a weekend!) and about three-quarters of mine I suppose, albeit not at the rate I’d charge clients.

    Yes we write about Vanguard for free. But they’d still be increasing their awareness with an ad, it’d be a call to action etc. The main thing is it’d be helping to contribute to the continuation of a site seen by over 100,000 people a month that’s mostly dedicated to passive and index fund investing. The company manages nearly $5trillion. I don’t think a couple of thousand a month is going to run up any ETF charges.

    Re: Asking the CEO, ha, it’s an idea. We were in discussions via an agency a few years ago (I was told, at least) but they went nowhere. And that was when it was establishing its UK presence and Monevator was more of a voice in the wilderness versus now, so I’m not hopeful.

    I’d do it in a flash if I were them and I’m sure it’d pay for itself, but then they have $5trillion under management and I am working on a website that only just washes its face 12 years after being set-up, so readers can judge for themselves who has the better business acumen… 😉

  • 32 Matthew October 26, 2019, 10:31 pm

    Perhaps because Vanguard is a mutual, and a big one at that, it doesnt necessarily benefit its customers to grow larger than it already is – once you get so big you face anti competitive regulation and can’t hold really tiny companies because you’d hold too much of them.
    Vanguard managers also would have some pay restraint from the cost cutting nature.

    And also, we do need somebody to be paying for price discovery

  • 33 Richard October 26, 2019, 10:31 pm

    I must say, I rarely hear about sovereignty being the key driver from Brexitiers. It is usually immigration. The 4 week wait to see a GP, the cost of housing, oversubscribed schools, undercutting in the trades to the comment of not hearing English in town centres anymore. I think this is why the economic arguments dont work, people see their community and way of life as under attack and are trying, rightly or wrongly, to defend it almost no matter the cost (perhaps similar to the WWII mentality – no appeasment even if the end result is the destruction of the empire, probably the reason this comparison with leave voters keeps coming up).

  • 34 Passive Investor October 27, 2019, 8:47 am

    @TI, RIT etc all the stuff about loss of environmental protections / workers rights etc doesn’t make sense to me. We have some of the best laws in these areas in the EU. Our relatively generous non contributory benefit system is one of the reasons that migration has been high and controversial. The point is that after Brexit we can have whatever employment laws / environmental laws the democratically elected government puts in place. That’s how democracy works. Talk of Ayn Rand is just hyperbole I am afraid.
    As it happens I would have voted for May’s deal and I was angry with the ERG for rejecting it – not because it wasn’t a poor deal but because I didn’t think there was an alternative on offer and I preferred a (IMHO) poor deal to Remain. But the point is that against prediction the EU did negotiate a new deal and so now it is the Remain Parliament stopping the deal. This deal is no worse (from the Remain perspective) than what was ‘warned’ about in the Remain in the Referendum.
    Finally above someone asked what the EU should reasonable have done in the negotiation when we (the UK) voted to leave the ‘Club’. Well first it isn’t a club if it is virtually impossible to leave on reasonable terms – more like a protection racket. What they should have done is accept that the UK will leave and then negotiate a FTA to the mutual benefit of all the citizens in the EU27 and UK. The fundamental point is that the Commission (and all EU enthusiasts – Mandelssohn Clegg, Clarke, Heseltine etc etc) don’t primarily see the EU as a trading block they see it is a political project of gradual unification. The trading arrangements are subordinate to the political ones which is why the negotiation has been so difficult. That has been the fracture in the UK discourse about the EU from the beginning.

  • 35 two shillings and sixpence October 27, 2019, 9:07 am

    Thanks for the interesting weekend reading

    “British journalists have become part of Johnson’s fake news machine – Open Democracy UK “
    reminded me of a recent discussion that the UK ranks low down (lower than i expected) on the world press freedom index. I should be more careful what news i consume as well as food having read “The difference between US and UK ingredients are disturbing”

    Keep up the good work

  • 36 The Investor October 27, 2019, 9:41 am

    Morning! 🙂

    As usual we’re getting into the typical Internet discussion thing where one says one thing, someone else amplifies it, and then you find yourself associated with something you didn’t quite say.

    So for the record — which I think I have to keep giving here on Monevator, as I’m always going to be here and people chase me up later on what I said, whereas mayfly commenters come and go 🙂 — I’d like to clarify/restate:

    — I don’t think sovereignty was the main reason people voted for Brexit. Fully agree it was more about migration (/anger at modernity / provinces feeling neglected / racism / nationalism / Barry Blimp being angry he’s not 25 anymore / bad maths / voters believing people who shouldn’t be lying to you about economics). What I am saying is to my mind sovereignty IS a valid reason to vote Leave. I don’t agree it’s enough but I respect the argument and the opinion. Unlike, say, the argument that Brexit will bring back heavy manufacturing, which is nonsense, or the idea we should Brexit for the fishing industry, which has a smaller turnover than Halfords. Those motivations are ridiculous.

    — The intellectually coherent reasons to Brexit IMHO are sovereignty, reduced migration, you’re a nationalist, you’re a racist. Even if I was most motivated by those things I still wouldn’t say Brexit makes much sense (we could have reduced migration already, if you’re a racist presumably you prefer EU migrants to other races migrating, sovereignty does not equal power etc) but unlike, notably, economics or bringing more prosperity to the Brexit-voting provinces, there is at least a correlation with those issues and membership of the EU.

    — I personally don’t think we’ll go down the massive deregulation route. 🙂 What I said was that deregulation is the only way I could see us not (moderately) losing out in GDP terms from Brexit, long-term, forever. I am not saying we should deregulate and I am not saying if we did deregulate some wouldn’t win and some wouldn’t lose. (As I’ve said before, personally I’ll do fine from any Brexit, for example, if one overlooks the massive loss of right to live anywhere in Europe without having to go through the hassle of buying a property for residency etc.)

    — The Brexit negotiations have been so difficult because we’re a strong economy and an important country from an EU perspective, but we’re not as strong or important as the 26 member bloc. What’s more there’s understandable wider ramifications for Europe, which isn’t just making a deal with us, it’s preserving its stance as a bloc. To use some hyperbole to make the point, at an extreme “one does not negotiate with kidnappers”. The UK has decided to leave. At that point, the EU’s only option is to negotiate the mutually best outcome *that favours as much as possible the EU*. That is its entire point of being! The people who can’t understand are the British exceptionalists who for 40 years have demanded — and mostly got — their way in Europe with opt-outs, no Euro membership (thankfully), the creation of the single market etc, to get the best deal of any member state and yet still that wasn’t enough. Leave supporters, in other words.

  • 37 Griff October 27, 2019, 9:56 am

    I do like the idea of Vanguard and passive cheap investment, but do worry that with all the press it’s getting nowadays are we at the top of the passive cycle. Let’s face it we are due a correction one way or the other.

  • 38 Marco October 27, 2019, 10:07 am

    @Griff – Corrections of 10 – 20% are common. The last one was in December 2018.

  • 39 Richard October 27, 2019, 10:15 am

    Hi. Just in case anyone from Vanguard is reading (and i am sure they are). It was Monevator that got me to sign up with them. Now i am no massive investor and i only earn a modest sum but if not for Monevator i would have ended up going with someone like Barclays Investment Isas (has that ever been said on here before).

    Since Monevator i have learnt so much about passive investing and Vanguard in particular and i have also been able to pass this site on to my brother who also went on to invest with Vanguard and he has a very good job and income to match.

    So thank you.

  • 40 Passive Investor October 27, 2019, 10:49 am

    @TI agree to differ in most of this as always but do agree with your comments about the EU obligations in negotiation. BUT I say again if the EU was a trading block with a proper Demos then it would be in its overwhelming interest to negotiate a FTA. (Freed trade between economies being a ‘win-win’) The point is that as primarily a political project, if the UK get too good a deal there is a risk (from the EUs view point) that other countries will peel away. Moreover because ultimately democratic influence is at national government level (there being no democratic control at Commission level) then deals get bogged down in inter national governmental horse-trading (French farmers vs German manufacturing workers etc). These are two of the reasons that negotiation is difficult. The others are that the result was quite close, that Parliament is more remain than the voters (and therefore MPs constituencies) and that party activists (Cons Leave, Labour Remain) are more entrenched or different from their voters.

  • 41 RIT October 27, 2019, 10:53 am

    @Passive Investor

    Re: environmental protections / workers rights etc. Why take it out of the WA agreement then? It could be about giving 100% control back to UK parliament (we already had a say as a voting member of the EU) but by doing this by definition then means it is possible they could be reduced in the future. When we start our new relationship with the US (after all we have to choose from the EU, China alliance, Russia alliance or US alliance) it will be interesting to watch what we do to make ourselves “competitive”.

    Re: immigration/benefits. As a member of the EU the UK could have required EU citizens to register if they wanted to stay more than 3 months. This could have included making them prove they were self insured for health (so no free NHS) and were financially self supporting (pension/work/dividends/etc required). When we went to Cyprus we had to do exactly this. After 5 years I was then eligible to start paying into their NHS. I would only have been eligible for benefits if I was ever able to become a citizen. The question should be why did the UK never implement a similar system? UK parliament were 100% in control of this.

    Re: reasonable terms. I don’t understand this. The EU asked us how we’d like to leave and when we couldn’t figure that out allowed us extra time to do so. They also allowed us to change our mind. The cost to the EU of our faffing must be enormous in both lost time and money. What more could they have done?

    Re: FTA. That bit hasn’t come yet but the UK could have easily put that in the PD the first time around. At the moment the UK has been asked to say how it would like to transition from an EU country to a 3rd country (the WA) and give an indication of the direction it would like future relationship negotiations to go (the PD). Also importantly the UK I don’t think just wants a FTA as that on its own would be a disaster. The UK definitely wants free flowing financial services within any future 3rd country relationship to name but one.

  • 42 The Investor October 27, 2019, 10:57 am

    @Passive Investor — Fair points, I see the logic in some of what you’re saying. But I think it’s clear the UK deserves more of the ‘blame’ for no agreed withdrawal agreement so far. The EU has been moving towards a FTA with us. It’s repeatedly agreed withdrawal agreement with us to lead to a future deal with us. We have repeatedly rejected it. The EU has repeatedly granted us extensions. As someone said earlier in the thread, what else could they have been expected to do? To mostly blame them as so many Brexiteers reflexively do is very wide of the truth. (Enjoy France! 🙂 )

  • 43 Jonathan October 27, 2019, 11:09 am

    I echo Richard.

    When a few years ago I realised I and my wife were on the run-in to retirement, I paid for a one-off advice session from a financial advisor. He was very useful in shaping strategy, in part because it created the discipline to make sense of where we then had money and what our financial plans were. I followed that up by trawling the internet, and Monevator was by far the most influential site in my decision that rather than choosing from the financial advisor’s suggested menu of balanced diversified funds, I should DIY and buy Vanguard funds through a low-cost platform.

    I hadn’t even heard of them before, but thanks to Monevator my wife and I now have invested a six figure sum in Vanguard funds, which is increasing with each year’s new ISA allowances.

    Of course Vanguard may feel they have already got the maximum advertising benefit from Monevator they are likely to get, but I would be happy for you to benefit from them buying that banner.

  • 44 Passive Investor October 27, 2019, 11:25 am

    @TI thank you @RIT is your point about UK requiring registration really true? It seems to contradict the EU principle that members have to be treated equally within a state (whatever their primary nationality). So free NHS, child benefit etc all have to be available from the time of entry. I’ve just finished reading Cameron’s autobiography (dull) and he failed to get any kind of compromise on this and kept running up against EU law. Genuinely interested but won’t be able to respond.

  • 45 Matthew October 27, 2019, 12:00 pm

    While it may be possible to reduce immigration from within the EU, I think it was clear that that just wasn’t going to happen, before the referendum it was thought that not many cared enough about that – the referendum captured people who dont normally vote or get polled, and the strong remain arguement for needing immigration to support the economy would have been foremost in the minds of most mps, there was no hope, other than the tiny thing ukip was, of otherwise achieving that

    The referendum shocked people, that shock alone discouraged unskilled immigration, making us seemingly less welcoming

  • 46 RIT October 27, 2019, 12:17 pm

    @Passive Investor
    You don’t have to believe me go straight to the data. The EU Directive on the topic is 2004/38/EC and the relevant Article is 7. Maybe Google 2004/38/EC and have a read as Article 7 is only 2 and a bit pages. After that it’s up to the Member State to implement what suits them. The UK chose to do nothing. I’ve mentioned Cyprus already. When we looked at Spain there was a change occurring into how they were managing healthcare and it was also regional. Where we were looking for the first year you definitely needed to be paying into the system via work or have private insurance. After that first year you could then pay to access the public system via something called a convenio especiale. Rates varied depending if your were over or under 65. I think now they’re moving towards free public access for all after the first year. I think importantly though this is all Spain with the EU not forcing any change. From a financial perspective the requirements were different to Cyprus but you still definitely had to prove you could support yourself through work/pension/other means and we were not eligible for benefits.

    For me the million pound question is why did the UK not do something similar years ago? I’ve never heard anybody even put a hypothesis up. I have a couple but there’s no data to support them.

  • 47 RIT October 27, 2019, 12:27 pm

    If immigration was not slowed pre-Brexit (after all UK parliament were fully in control but chose to do nothing) why do you think it is going to be slowed post Brexit? After all the rules post Brexit will be set by the same lot. My hypothesis is the country demographic will just be changed and immigration will not slow as nobody seems interested in solving the GDP per capita problem and so we need the immigration to feed the GDP growth machine. BTW not saying GDP is a good measure of country prosperity.

  • 48 The Investor October 27, 2019, 12:33 pm

    For me the million pound question is why did the UK not do something similar years ago? I’ve never heard anybody even put a hypothesis up. I have a couple but there’s no data to support them.

    Because immigration was great for our economy, all the data shows it was a net positive, there is one report showing *perhaps* a very small impact on the lowest earners, which could easily be best rectified by redistribution, and in the meantime London in particular attracted thousands of super-bright EU migrants and entrepreneurs.

    In other words, we didn’t change it because it was good for us. Probably what Spain is looking to capture now with the moves you cite.

    But never mind. Fruit is rotting in the fields, start-ups will set up in Berlin or Lisbon now, and we’ll be slightly poorer forever, but at least Leave voters in Leave voting regions (with the lowest levels of immigration in many cases) will encounter one less hard working Polish accent in the High Street. 😐

  • 49 Old_eyes October 27, 2019, 12:46 pm

    Freedom of Movement rights in the EU have limits. Lord Bilimoria spent some time trying to for e an admission of that out of the Government. To quote him:

    “The Free Movement Directive is just one of many of these unknown factors that mean we need to raise the level of discussion and offer the British people a final say on Brexit.

    I finally received an acknowledgement of the directive in writing from a government whip in November last year, after bringing this up in Parliament several times. He confirmed:

    “Where admission is permitted, an EU citizen may remain in the UK for up to three months from the date of entry, provided they do not become a burden on the social assistance system of the UK.

    If an EU citizen does not meet one of the requirements for residence set out in the Directive [employed, self-employed, self-sufficient, student] then they will not have a right to reside in the UK and may be removed.”

    The UK is free to implement this policy as it sees fit, and yet it does not, while other countries – including Belgium and Italy – use this legislation to repatriate thousands of EU migrants each year.

    If the British public knew this one fact – that we do have control of our borders even inside the single market – the fear of uncontrolled EU immigration would be dispelled. The fact is that EU migration is not unrestricted, and EU migrants are not permitted to burden the state by claiming their Treaty rights”.

    Overstating FoM rights and conflating non-EU migration with EU migration was one of the more successful and despicable plots of the Leave campaign.

    There is a conversation to be had about how we manage migration so that everyone can thrive, but it has nothing, nothing at all, to do with the EU. I cannot forgive the Leave campaigns for their cynical use of dog-whistle racism to achieve their ends, whilst knowing that they were lying. It will take a long time to heal the rift they deliberately introduced, and those who voted leave because they bought this line will be angered when immigration just rolls right on.

  • 50 Matthew October 27, 2019, 12:48 pm

    @ rit – it made the point to mps that immigration did matter – hence the drift of the conservatives to head off the threat from farage, beforehand parties didnt bother courting council areas that seamingly never voted

    And also its the belief that in one way or another, there would be barriers – even if marginally higher. Non eu migrants typically need a certain income to stay, so they are higher skilled, and the assumption is that the EU ones will be treated more like the non EU ones.
    And its the message it sends out, of course

    @TI – how did the report know that the impact would be small wothout anything to compare it too – you dont have to look far to see how many eu migrants fill unskilled jobs – if food rots in the field, the imperitive is on the farmers to raise wages to recruit – although I daresay it was unthinkable to think wages could be allowed to rise that significantly and the vested interest (and easier narratitve) was to simply say jobs would be lost in droves- its the same arguement against raising munimum wage

    Leave voters had to assess how likely they were to lose their jobs, or their grandchildren losing their jobs

  • 51 arty October 27, 2019, 1:00 pm

    You may not think sovereignty was the main reason people voted for Brexit, but the best evidence we have, the polling done by Lord Ashcroft, it quite clear on this:

    “Nearly half (49%) of leave voters said the biggest single reason for wanting to leave the EU was “the principle that decisions about the UK should be taken in the UK”. One third (33%) said the main reason was that leaving “offered the best chance for the UK to regain control over immigration and its own borders.” Just over one in eight (13%) said remaining would mean having no choice “about how the EU expanded its membership or its powers in the years ahead.” Only just over one in twenty (6%) said their main reason was that “when it comes to trade and the economy, the UK would benefit more from being outside the EU than from being part of it.”


  • 52 The Investor October 27, 2019, 1:00 pm

    Leave voters had to assess how likely they were to lose their jobs, or their grandchildren losing their jobs

    Employment is at a multi-decade high. Before the referendum hit us for six we were the fastest growing economy in the G7. Immigration has been great, economically speaking, for nearly everyone in the UK. Even despite the stupid Brexit own goal, the economy continues to inch forward.

    Leave voters were entitled to make up their minds however they liked, but it doesn’t make their reasoning right. There is zero economic argument for Brexit.

  • 53 Indecisive October 27, 2019, 1:01 pm

    @Griff, #37: My concern too. The pile-in to passive investing, the overinflation of the price of the shares held (distorted by the demand to buy more of them to keep the correct holding ratio) – when something happens (a small downturn that causes doom and gloom headlines) and passive investors start withdrawing (cf Woodford) I am thinking the effect will be worse. Say it happens to a Vanguard fund; the size of the holding makes the effect of the sell-off on the fund – and the wider market – larger than I can think of happening in an actively managed fund, due to the makeup of the shares held.

    This may be totally unfounded, in which case I look forward to being proved to be an idiot 🙂

  • 54 The Investor October 27, 2019, 1:03 pm

    @arty — Well I read that as immigration, not sovereignty, or at most a mix.

    Additionally it’s the Leave supporters / neutrals on this thread that are telling me sovereignty wasn’t a big issue. One said earlier s/he has never heard it brought up, and it’s all about migration.

    But arguing why Leave voters voted Leave is like trying to tap dance on a water fountain. It’s the ultimate Rorschach inkblot.

  • 55 The Investor October 27, 2019, 1:05 pm

    p.s. Sorry, I misread the order of the percentages. (On phone on tube!) Okay, that evidence does nudge in favour of sovereignty. Still leaves lots of other (stupid or bad) reasons, and given the vote was very close they matter.

    But I’m actually pleased if sovereignty was overall the main motivation, as at least it’s intellectually coherent.

  • 56 arty October 27, 2019, 1:08 pm

    The number one reason given by leave voters, by some margin, is “The principle that decisions about the UK should be taken in the UK”.
    You read that as being about immigration rather than sovereignty?

  • 57 arty October 27, 2019, 1:14 pm

    Posts seem to have crossed – feel free to delete the above if it keeps it more coherent. Though I think we can probably agree that everything and anything on all sides related to Brexit is fairly incoherent so I guess it doen’t really matter.

  • 58 The Investor October 27, 2019, 1:17 pm

    @Griff @Indecisive — Please read back on the other articles we’ve done about this. Passive / index funds can’t inflate prices, because they follow the lead of active fund managers. They can certainly be the vehicle by which a boom is stoked in terms of getting money out of cash/bonds and into equities, but that’s a slightly different matter. (The same thing happened with active funds in the past). Also remember that as active funds must mathematically under-perform whether we’re in an up or downmarket, any bursting of this long bull run won’t favour active funds except to the extent they hold cash or other non-benchmark assets. (Which you can do yourself more cheaply / consistently by selling down some index fund and moving it into, say, short-term bonds).

    @arty — See the post above yours. I was jiggling the Wordpress comments moderator screen while on the move and to my eyes it started with the 33% line. Have since retracted that statement, as above. 🙂

  • 59 RIT October 27, 2019, 1:21 pm

    My replies seem to now not be publishing. Try again…

    Agree with most of what you say. So the Leave campaign were lying at worst and despicable at best. What I think you missed is I think Remain have to also accept some responsibility here as they were somewhere between incompetent and naive on the topic during the campaign.

    So you’re saying we chose to self harm to maybe get an immigration point across. Do you think it worked? I personally see no evidence that MP’s have listened but I might have missed the acknowledgement. To me it feels like we’re chopping an arm off to maybe heal a wound on our leg.

    Importantly, EU migrants under EU rules do need a certain income to stay beyond 3 months. We just chose not to require it so it was all on us.

    Your mention of Farage is an important one though. He is why IMHO we had the referendum in the first place. It was never about what’s better for the people as a collective, which we know under every scenario published has us worse off, it was about stopping the conservative party disappearing into obscurity with the party being pincer moved with Labour/Lib Dems on the left and UKIP growing on the right. Latest polling suggests that they also might just have saved themselves. An amazing recovery but for how long. I know I’ll never forgive them.

  • 60 The Investor October 27, 2019, 1:21 pm

    If you don’t believe me that there is…

    zero economic argument for Brexit.

    …then perhaps you’d like to hear from key Government insider, Sajid Javid MP, who has said:

    One of the advantages of EU membership is that we get to negotiate wider and deeper trade deals from a position of strength. If we leave, the boot will be on the other foot – and that will put Britain at a serious disadvantage.

    The remaining EU nations will want to secure a deal that’s good for their economies. So Germany will want to protect its carmakers from British imports. France will want to protect its farmers from UK rivals. Even little Luxembourg will want to protect its financial services industry from the global hub of London.

    And who could blame them? If I was in their shoes, I’d do the same. If Germany left the EU tomorrow, I’d make damn sure any trade agreement we reached put British businesses first. I’d be failing in my job as Secretary of State if I didn’t.

    Business leaders from kitchen-table start-ups to vast multi-nationals are already telling me that the uncertainty over the referendum result is causing them to delay investment decisions, to think twice about creating new jobs.

    If we vote to leave, that uncertainty won’t end the morning after the referendum. Even the most conservative estimates say it could take years to secure agreements with the EU and other countries.

    Having spent six years fighting to get British businesses back on their feet after Labour’s record-breaking recession, I’m not about to vote for a decade of stagnation and doubt.


    I wonder what it was about getting the job of Chancellor that changed his mind? 😉

  • 61 Passive Investor October 27, 2019, 2:03 pm

    @RIT Party manifestos pledged a Referendum at elections as follows: Labour 2005 (broken commitment) LibDem 2010 and Greens (!)2015 Somewhere there is even a nice video of Jo Swinson demanding a referendum in the Commons. So it wasn’t JUST about the Conservative party. A more plausible analysis is that the country has been deeply divided for more than a generation. With the steady acquisition of powers by the EU and the intention to pursue Ever Closer Union a referendum was becoming an inevitability.

  • 62 Matthew October 27, 2019, 2:39 pm

    It depends of course on what sector you work in as to how exposed to Brexit you are,

    Bad for the overall economy, not disputed (at least in the short term), but its not the national interest we’re concerned about, right 😉 – winners and losers. We agree on that I think, so it really comes down to how many people percieved themselves to be winners

    You do reach a point of thinking “why should I care about the greater good?” – that’s the difference between leave and remain, remain voters care about the country, care about migrants, care about the environment, etc – leave voters are jaded opportunists, who have endured years of serious competition for jobs, suppressing wages, and housing, increasing rents (since houses hardly get built nowadays) and austerity. They are generally left behind while businesses grew on cheap labour.

    The education system sort of conditions you to be remain – to care about your fellow man, and when you’re young you don’t care so much about money, and there is an elitism that looks down upon leave stereotypes, but as you get older you become less conditioned.

    Part of the shock too was because of the degree of self-censorship – true feelings don’t get expressed in opinion polls or out loud because leave (or trump) voters fear how they will be judged or have to explain themselves

    @ Rit – we were suprised mp’s even listened enough to invoke article 50 at all, and the conservatives certainly listened, albeit (I agree) because of Farage, and I agree, without farage in the first place Cameron would never have held the referendum. You couldn’t say Farage was wrong to be there however, because he represented a significant number of voters. Farage is not, however, the best horse to deliver this, at least not while a deal is on the table and Boris is trying (and popular)

    And unskilled immigrants certainly listened – hence the rotting food in fields

  • 63 ZXSpectrum48k October 27, 2019, 2:50 pm

    @arty. The Lord Ashcroft poll, taken just after the referendum was probably the most illuminating about why Leave won and with a sample over over 12,000 sample cannot be easily dismissed. Unsurprisingly it recorded 80% of Leavers see immigration as a “force for ill”. What is even more interesting is what else they see as a force for ill: multiculturalism 81%, Social liberalism 80%, Feminism 74%, the Green Movement 78%, Globalization 69% and, most odd, the Internet 71%. If that is what the balance of this country really thinks then I have little further interest in being British. I’ll stick to being part of the socially liberal, multicultural, elite in London.

  • 64 The Investor October 27, 2019, 3:04 pm

    @Matthew — You write:

    And unskilled immigrants certainly listened – hence the rotting food in fields

    There is surely a bit of the ‘hostile environment’ vibe behind this, for which I personally am deeply regretful if not ashamed of my country. But I think it’s also down to the fall of the pound against the Euro for the past few years. Wages in Euro terms have fallen 20-25% for most of the period, as the pound (and hence Britain and British citizens) have become poorer in global terms. As someone said earlier, to the extent we’ve damaged ourselves to make a point then, I guess it worked.

    @ZXSpectrum — You write:

    What is even more interesting is what else they see as a force for ill: multiculturalism 81%, Social liberalism 80%, Feminism 74%, the Green Movement 78%, Globalization 69% and, most odd, the Internet 71%. If that is what the balance of this country really thinks then I have little further interest in being British.

    I give you my artistic personification, Leave voter and celebrator Barry Blimp:


  • 65 Matthew October 27, 2019, 5:45 pm

    @TI – I think this shame is partly due to how we are told we ought to feel, we are taught to be overly respectful and careful of other cultures to the point where “political correctness” feels like a one way thing – theres no protection against them criticising our culture (eastern european tell me they don’t like how sly or quiet English people can be) – and you start to feel like an underdog, worshipping our protected and venerated guests, for fear of being outcasted and judged, by them and other liberals, because liberals rate the uk underclass below migrants.

    We come to feel like they sort of own the jobs in this country they are born with the right to live here and stopping that is infringing that right, but you couldn’t go to their countries and expect superior treatment or the freedom to follow every aspect of english culture unchallenged on their land.

    And you have to remember that the ones who come generally chose to leave their parents behind in persuit of money – you are dealing with the more mercenary fraction of that country’s population

    Also a parent will do whatever they can to give their children an advantage, and by having strong personal finances helps you support that family

    You could argue it is merely righting a wrong that the political and business elite have been getting away with for years – flooding the market with cheap labour for their profit which rhe underclass never felt like they saw

    Also the assumption is that existing migrants living here would be ok and its new ones in that face a barrier, like we’d face barriers going into other countries around the world. In fact pre existing migrants should see wage rises too, there is a case for them to want to stop their countrymen coming

  • 66 Mr Optimistic October 27, 2019, 10:27 pm

    Perhaps people like cultural security, knowing how they fit in, and cultural stability, not worrying about a too fast changing world. The most manifest presentation of challenges to these were the visible and audible evidence of others, on the street and in their towns. I thought it obvious then, and beyond argument now. Might be irrational, and cause self harm through economics, but……

  • 67 The Investor October 27, 2019, 10:45 pm

    @TI – I think this shame is partly due to how we are told we ought to feel, we are taught to be overly respectful and careful of other cultures to the point where “political correctness” feels like a one way thing – theres no protection against them criticising our culture…

    No, the shame I feel is shame that the sort of sentiments you express here — which I’ll charitably assume you’re articulating but may not hold in full yourself — have been allowed to capture the national conversation and led to this lamentable Brexit.

    What on earth are you on about? EU migrants are mercenary because they come here, but British workers who don’t pick apples because the wages aren’t high enough, as someone said down the thread, are not mercenary?

    People feel like the underclass because someone from Poland is serving them a coffee in Costa?

    …you couldn’t go to their countries and expect superior treatment or the freedom to follow every aspect of english culture unchallenged on their land.

    Have you been to Spain? This is exactly how the British in places like Benidorm have behaved for decades.

    Here’s (apparently for some) a secret. The ones who come here are mostly somewhat dynamic self-starters who want to make the best of their lives, just like the people in this country who are prepared to move city etc for jobs rather than moan and blame migrants who have to cope with no family, language barriers and, self-evidently, a hostile attitude from a segment of the population. They are not mercenary. They are doing what people wanting to better their position have been doing for millennia.

    More: https://monevator.com/what-everybody-needs-to-learn-from-recent-immigrants/

    Perhaps Remainers feel a kinship with these people because it’s exactly what many of us have done. (E.g. Moved to London instead of staying in the provinces and moaning). As I articulated in my first rant post after the EU Referendum result here:


    You then write:

    We come to feel like they sort of own the jobs in this country they are born with the right to live here and stopping that is infringing that right

    No, they are simply taking advantage of the single market that many Britons also take advantage of in Europe, and more could if they wanted to.

    As I say, I’m not going to shoot the messenger here and I’ll presume you realize that EU migrants are exactly like us.

    I’m very clear on why I feel this is on balance a shameful decision by Britain, and Leave apologists telling me it’s mostly because people were worried about Regulation 5845845 (b) about the amount of toxins you could have in petrol being thrust on them by Brussels won’t dissuade me.

    And you’ve helped me remember it.

  • 68 Matthew October 27, 2019, 11:46 pm

    Superior effort should be rewarded, I hear you, but whether we go to the extraordinary lengths of learning a new language ad upping sticks, or doing a feindish university course, our reward; our pay; is valued on our value to our employer, regardless of whether the opportunity exists to be fully utilised, and these migrants get the same pay – have the same value – as a local. At the end of their working life they wouldve contributed something similar. The market is the judge. It is’t fair when people don’t get extra pay for these lengths, but the markets not there to reward effort it can’t value

    They calculate that learning a new language and travelling will be rewarded, I don’t, I think they miscalculate. Even moving to London is a miscalculation in some careers. They have the opportunity to go somewhere with notably higher pay, but people already in wealthy countries have nowhere significantly better to migrate to, that would be worthwhile

    I admit to being mercenary as I had to become to give my family the best house and most family time I can. I admit to using what methods I can to achieve that, just like the migrants using what laws they can utilise, ultimately we have more power in our own land and it’s fair game, it’s just a reminder that thats the way it really is

    I think tourist areas like spain and london tolerate cultural intrusion for tourist money (as well as skilled workers in the case of london) – but exurban spain where it’s a competition for jobs might be a different matter

  • 69 The Investor October 28, 2019, 6:48 pm

    @Matthew — We differ much more than your latest post implies, I think (or at least the view you’re articulating). In fact, this back and forth is not a bad proxy for Leave vs Remain.

    You are saying I should feel this that and the other about “them” coming “here” and supposedly feeling “entitled” and “untouchable”.

    I see “them” as basically “us” and the EU as a first step to getting rid of this kind of IMHO toxic thinking, albeit moving too quickly for some people. There are more distinct cultures where assimilation/integration is more difficult (and we’ll probably see more of them migrate here to fill any gap left by EU migrants, ironically) but Europeans are pretty much the same with different stories and spelling. It makes a lot of sense for us to integrate, albeit at a sensible speed.

    I’m not a deeper integration in the next 10 years kind of guy, but over 50-100 years? Bring it on.

    Not least because the alternative end goal — we’re are ‘different’, we ‘look after our own’ — has a truly horrible track record, something the European Union was set-up to avoid repeating.

    p.s. Closing comments here on this one. Let’s see what the next crazy week in Parliament brings us all. 🙂