Super low ETF expenses from Schwab now.

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Jack FFR1846
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Joined: Tue Dec 31, 2013 7:05 am

Re: Super low ETF expenses from Schwab now.

Post by Jack FFR1846 » Wed Oct 19, 2016 11:06 am

Everyone is cutting fees as of late. Fidelity did it to undercut Vanguard's index mutual funds and has banners on their site touting their fees vs Vanguard. Schwab has been doing it without quite so much fanfare. I noticed it with their ETFs as I was looking to open my first ever taxable account and have liked Schwab's total US market ETF SCHB quite a bit. Seeing it lowered to 0.03 got me to pull the trigger. I already have a 2 comma IRA at Fidelity and a quarter mil at Vanguard. My taxable is planned to only hold one ETF, so this is pretty simple for me. Yes....I chase lowest ER and yes, I know that it's only pennies but I don't see enough difference between Vanguard, Fidelity, Schwab and TDA when it comes to large cap, total US market type funds and ETFs so for me, lowest ER wins. Heck.....if TDA comes out with something that's 0.02 tomorrow, I'll move there.
Bogle: Smart Beta is stupid

rgs92
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Re: Super low ETF expenses from Schwab now.

Post by rgs92 » Wed Oct 19, 2016 11:08 am

I guess zero expense ratios are on the horizon. Maybe there will be a negative ER... (Impossible? Well so were bond yields less than zero.)

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jhfenton
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Re: Super low ETF expenses from Schwab now.

Post by jhfenton » Wed Oct 19, 2016 12:00 pm

rgs92 wrote:I guess zero expense ratios are on the horizon. Maybe there will be a negative ER... (Impossible? Well so were bond yields less than zero.)
If you count securities lending revenue there are several funds with net-negative ERs, meaning that you can expect them to out-perform their indexes by a few bp every year.

bnes
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Re: Super low ETF expenses from Schwab now.

Post by bnes » Wed Oct 19, 2016 12:15 pm

Kind of amazing they are reducing ER for everyone, rather than creating new share classes for new purchasers. Good for the lazy.

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