Buying Vanguard Funds at TD Ameritrade

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TJofNOHO
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Joined: Sun Nov 26, 2017 1:02 pm

Buying Vanguard Funds at TD Ameritrade

Post by TJofNOHO » Sun Nov 26, 2017 1:21 pm

Hi! First post, here goes :)

I totally drank the Vanguard Kool aid after reading Bogelheads Guide To Investing, these forums, and several other books of the topic.

BUT it looks like opening up a Solo 401k at Vanguard doesnt make as much sense as TD Ameritrade (thx to the much reading in this forum on the topic!)

TDA has taken Vanguard funds off it’s list of commission free ETFs. Commission is around $6 and I plan on investing monthly.

Below is my ideal asset allocation in Vanguard funds AND what I THINK are the similar funds in TDS commission free list, Akon with both funds expense ratio.

My questions:
Do I buy the TD funds w less or simulate ER to Vanguard funds because all things equal these funds are all similar?
Do I buy Vanguard funds and pay commissions on the purchases, maybe investing quarterly as opposed to monthly to cut down on costs?
I could not find cheap bond funds at TD on commission free list, did I miss them??
Any other advice?? Are the funds I picked in fact comparable to the Vanguard funds I want to love, or am I missing something?

90% STOCK
50% Total US
VTI .04%
SPTM .03%
30% Total International
VXUS .11%
ACWF .36%
15% Small Cap Value
VBR .07%
SLYV .15%
5% REIT
VNQ .12%
USRT .08%

10% BOND
70% Total US
BND .05%
30% Total International
BNDX .12%

Thank u so much in advance!

TJ
Last edited by TJofNOHO on Fri Dec 01, 2017 7:59 am, edited 1 time in total.

livesoft
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Re: Buying Vanguard Funds at TD Ameritrade

Post by livesoft » Sun Nov 26, 2017 2:52 pm

Welcome to the forum.

There are some recent threads about ETFs that trade commission-free at TDAmeritrade that might be suitable substitutes for Vanguard ETFs that are no longer commission-free at TDAmeritrade. Here is just one example: viewtopic.php?f=10&t=232696

You missed the bond ETFs.

I have not decided yet what to do with my assets at TDAmeritrade. I do not intend to pay any commissions that's for sure.

Some of my notes:

No-commission ETF changes at TDAmeritrade

SPSB is short-term corporate e.r. 0.12%. VCSH has e.r. 0.07%.
SPAB is Total Aggregate Bond Market has higher bid/ask spread than AGG, BND

SPTM is Total Stock Market has higher bid/ask spread than VTI
SLYV is Small-cap value has higher bid/ask spread and lower volume than IJS

DGS is now no-commission
SPDW is more like VEA (no emerging) or is it?, e.r. 0.04%
SPEM is more like VWO?

80% SPDW
15% SPEM
05% DGS seems to be close to 100% VXUS
===========
DLS is no commission, might be like VSS
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TJofNOHO
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Re: Buying Vanguard Funds at TD Ameritrade

Post by TJofNOHO » Wed Nov 29, 2017 3:16 pm

Thanks for the heads up on other threads. I just went DEEP haha. Also thanks for the suggestions. Here is where I’ve landed for the moment on paper:

SPTM - US Stocks
SPDW - Int Stocks (U mentioned supplementing w SPEM. Is Emerging Int Stocks an important part of Int exposure or more a preference tilt? Trying to keep it simple but don’t want to shoot myself in the foot. Appreciate u broke down the Van fund)
SPAB - US Bonds
IAGG - Int Bonds
USRT - US REITs

Thinking I’ll put VBR - SCV US Stocks in my ROTH at Vanguard. Seemed like the hardest Van fund to replicate w new funds.

Am I missing exposure to anything glaring? Looking for a simple but sturdy Boglehead approach. Love any thoughts on this or where you’ve landed with your funds. Thanks!
Last edited by TJofNOHO on Wed Nov 29, 2017 3:26 pm, edited 1 time in total.

John Laurens
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Re: Buying Vanguard Funds at TD Ameritrade

Post by John Laurens » Wed Nov 29, 2017 3:23 pm

IMO Vanguard’s i401k is very good if you are willing to solely use a TDF or LS Fund? FWIW I used to have a solo 401k at TDA and used 4 Vanguard ETF’s.

Regards,
John

TJofNOHO
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Joined: Sun Nov 26, 2017 1:02 pm

Re: Buying Vanguard Funds at TD Ameritrade

Post by TJofNOHO » Wed Nov 29, 2017 3:39 pm

John Laurens wrote:
Wed Nov 29, 2017 3:23 pm
IMO Vanguard’s i401k is very good if you are willing to solely use a TDF or LS Fund? FWIW I used to have a solo 401k at TDA and used 4 Vanguard ETF’s.

Regards,
John
I went back and forth on this. Literally opened the TDA Account on Nov 20 only to find that was the last day for Van funds. 🙄

But what are TDF and LS funds?

My problems w Van i401k were no ETF or Admiral share options. But it’s not too late, I’m willing to do Van i401k instead of it makes sense. I haven’t funded yet.

The question stands:
Van i401k w Van funds at higher ERs?
Or TDA i401k w SPDR funds but lower ERs?

livesoft
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Re: Buying Vanguard Funds at TD Ameritrade

Post by livesoft » Wed Nov 29, 2017 3:41 pm

TJofNOHO wrote:
Wed Nov 29, 2017 3:16 pm
Am I missing exposure to anything glaring? Looking for a simple but sturdy Boglehead approach. Love any thoughts on this or where you’ve landed with your funds. Thanks!
I haven't landed anywhere yet. I am going to get TDAmeritrade to give me plenty of free trades, so that I don't have to worry about it. I'll probably continue to use the Vanguard ETFs plus DGS (which I already own in other accounts).

I think SLYV is probably good enough to use for SCV instead of VBR if you are building a portfolio.

As for what Mr Laurens wrote, I have used my i401k for all rebalancing of all my portfolio, so I want the separate asset classes in that account and not a any fund of funds like the ones he mentioned.
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TJofNOHO
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Joined: Sun Nov 26, 2017 1:02 pm

Re: Buying Vanguard Funds at TD Ameritrade

Post by TJofNOHO » Wed Nov 29, 2017 3:57 pm

“I think SLYV is probably good enough to use for SCV instead of VBR if you are building a portfolio.”

I don’t know how to do those cool yellow boxes y’all put around quotes BUT...

I’ll look into SLYV some more. I think u might be right tho. I’ll prob keep VXUS in my Van Roth instead and drop SPDW.

Thx!

Bulgogi Head
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Re: Buying Vanguard Funds at TD Ameritrade

Post by Bulgogi Head » Thu Jan 11, 2018 9:57 pm

Is it worth paying the TDA commission for Vanguard ETFs rather than buy the free SPDR core ETFs? In my own personal situation, I would probably be buying maybe two to three times per year, and would use BND, VTI, VXUS. I have both Pre-tax and Roth 403b, so the max amount of trades per buying session would be 6. This is a retirement account, so holding period would be at least 30 years.

livesoft
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Re: Buying Vanguard Funds at TD Ameritrade

Post by livesoft » Fri Jan 12, 2018 4:00 am

Bulgogi Head wrote:
Thu Jan 11, 2018 9:57 pm
Is it worth paying the TDA commission for Vanguard ETFs rather than buy the free SPDR core ETFs? In my own personal situation, I would probably be buying maybe two to three times per year, and would use BND, VTI, VXUS. I have both Pre-tax and Roth 403b, so the max amount of trades per buying session would be 6. This is a retirement account, so holding period would be at least 30 years.
Probably not. You can buy SPAB, SPTM, and other no-commission ETFs instead. Every few years, if you feel you must have Vanguard ETFs, then sell SPAB, SPTM, ... and buy BND, VTI, .... after asking your TDAm rep for some free trades.
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Bulgogi Head
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Re: Buying Vanguard Funds at TD Ameritrade

Post by Bulgogi Head » Fri Jan 12, 2018 2:28 pm

Thanks for the response,

Do you think that concerns about higher bid/ask spreads and lower liquidity for the SPDR funds are a big negative? What about the fact that the SPDR ETFs have much fewer holdings than the Vanguard equivalents? Lastly, I noticed that the SPDR ETFs’ performance differs a moderate amount from he Vanguard ETFS (sometimes underperforming). Is this really concerning, or would the ability to buy them commission free override these concerns?

Of course I would prefer Vanguard ETFs, perhaps because of irrational bias. However, do you think this is one of those ‘abandoning a good plan in search of a perfect plan’ things?

I’m new to ETFs so don’t know how important some of these factors such as liquidity are when making comparisons.

asif408
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Location: Florida

Re: Buying Vanguard Funds at TD Ameritrade

Post by asif408 » Fri Jan 12, 2018 3:52 pm

Bulgogi Head wrote:
Fri Jan 12, 2018 2:28 pm
Thanks for the response,

Do you think that concerns about higher bid/ask spreads and lower liquidity for the SPDR funds are a big negative? What about the fact that the SPDR ETFs have much fewer holdings than the Vanguard equivalents? Lastly, I noticed that the SPDR ETFs’ performance differs a moderate amount from he Vanguard ETFS (sometimes underperforming). Is this really concerning, or would the ability to buy them commission free override these concerns?

Of course I would prefer Vanguard ETFs, perhaps because of irrational bias. However, do you think this is one of those ‘abandoning a good plan in search of a perfect plan’ things?

I’m new to ETFs so don’t know how important some of these factors such as liquidity are when making comparisons.
The spreads aren't that much different, so unless you transact often that should not be an issue. The SPDR funds have gotten a lot of inflows in the past few months because of the TDAmeritrade change, and the big ones that I use all have over $1 billion AUM, so liquidity is and will continue improving.

The performance has been very close when I compare the funds in Morningstar to Vanguard equivalents over the last 10 years, which includes the financial crisis:
US Market (SPTM vs. VTI)
http://quotes.morningstar.com/chart/etf ... 2%3A955%7D

Developed Markets (SPDW vs. VEA)
http://quotes.morningstar.com/chart/etf ... 2%3A955%7D

Emerging Markets (SPEM vs. VWO)
http://quotes.morningstar.com/chart/etf ... 2%3A955%7D

The US market funds track almost perfectly, and the foreign funds track close enough for me. The SPDR foreign ETFs have actually performed a little better over the last 10 years. Finally, the correlations are almost 1 in the portfolio visualizer app. So all indications are they should perform about the same over the long haul, and any differences are likely to be short term and small. There are no warnings signs that indicate the funds will perform dramatically differently.

livesoft
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Re: Buying Vanguard Funds at TD Ameritrade

Post by livesoft » Fri Jan 12, 2018 4:29 pm

Bulgogi Head wrote:
Fri Jan 12, 2018 2:28 pm
Of course I would prefer Vanguard ETFs, perhaps because of irrational bias. However, do you think this is one of those ‘abandoning a good plan in search of a perfect plan’ things?
I have started buying SPTM, SPSM, SPAB, and SPSB in the past few weeks. I think they are probably just fine for most people, so you should certainly use them to start with.

Since it will cost you absolutely nothing to try them for yourself and you can sell them after holding 30 days or so, there is no reason not to try them. That's why I tried them myself. I've used both market orders and limit orders. I've done small orders and largish orders. What I think should have no bearing on what you do, but I will say right now they are adequate and I will continue to buy them.
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