Vanguard has changed the wording in its SEC filings, dropping some of its usual terms such as “mutual mutual,” “at-cost,” and “no profit” from the introduction, writes Joseph DiStefano for the Philadelphia Inquirer.
“We are streamlining and simplifying our disclosures,” said Vanguard spokesman John Woerth.
The annual filing for a batch of Vanguard funds published on Jan. 25 gave a preview of the shorter note.
“Most other mutual funds are operated by management companies that are owned by third parties — either public or private stockholders — and not by the funds they serve,” it said.
Also, Vanguard is no longer referred to as “mutual mutual,” which is not a recognized legal status under federal securities law. The claims that Vanguard’s way offers a “no profit” counterpart to the “profit component” packed into the management fees of other companies have also been removed, along with the claim that Vanguard operates “on an at-cost basis.”
According to Barry Ritholtz, chairman of Ritholtz Wealth Management, which invests in Vanguard funds, the new language is more precise and should help Vanguard avoid “nuisance” litigation.
Read more about Vanguard in the Philadelphia Inquirer here.
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