I noticed this with other funds like the Vanguard's Extended Market Index, which got about 16bp in securities lending revenue, which far exceeded the 6bp expense of the ETF class.The income derivable from securities lending seems to have exploded in the last year. Perhaps this corresponds with the rise of interest rates; I don't know enough about securities lending to know. One can see this income from the annual report of Vanguard's small-cap index funds. Last fiscal year securities lending exceeded fund expenses (at least the ones listed in the report under net fund expenses) for all three index funds by between 80--200%. By contrast in previous years lending income covered 30--50% of fund expenses. I looks like Vanguard is letting their brokerage customers with individual stocks in on this particular bonaza.
This year I'm even more astonished than normal about the amount of money shorts spend to borrow stocks. But I thank them for their dollars nonetheless.
In any case, is there any indication of the proportion of securities lending revenue that Vanguard would share with clients? I'm unwilling to do so at Robinhood since they appear to share 15% of revenue, and I would lose SIPC coverage. However, I'd be more likely to enroll in programs run by Fidelity, Schwab or Vanguard.
Statistics: Posted by Lyrrad — Mon Mar 18, 2024 8:05 pm — Replies 16 — Views 716