I have had a HSA bank account for a couple years and just linked it with TD Ameritrade and transferred money to them.
I would like to buy a pure index equity vehicle with the money. Reviewing some other threads, it was suggested that I look at ITOT and SPTM which are ETF's and commission free. When reviewing, I see that one allows the manager to "play" with 10% of the assets and the other with 20% of the assets in the ETF if I understand the material. I don't want a manager to have this discretion. I then looked at mutual funds and if I choose a noncommision fund it will cost me $25 to buy.
So... I looked at SCHB and VOO. VOO is a Vanguard ETF that indexes the SP500. I think the trade would cost me $6.95. SCHB is an index tracker of the largest 2500 stocks, but also allows the manager 10% "wiggle room".
I am leaning on VOO as an ETF for my HSA account with TD Ameritrade.
What are your thoughts and what do you think I may be missing?
Help with HSA with TD Ameritrade - investment choice
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Re: Help with HSA with TD Ameritrade - investment choice
Not sure what you mean by wiggle room. Those broad total stock market etfs track with little or no error. You can use a commission free etf from TDA. I choose to pay $6.95 for a one time purchase of an ETF each year with my max contribution ($6900 in 2018 for family). I have DRIP turned on.
Regards,
John
PS. I don’t believe ITOT trades commission free at TDA. State Street wouldn’t want that.
Regards,
John
PS. I don’t believe ITOT trades commission free at TDA. State Street wouldn’t want that.
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Re: Help with HSA with TD Ameritrade - investment choice
SPTM is the commission free equivalent to VTI as it sounds like you want to use your HSA for a Tot Us Market index. I am not sure about your analysis and if that has any impact as you can see that SPTM and VTI have similar returns.
Re: Help with HSA with TD Ameritrade - investment choice
This is what I call "wiggle room". This is in the fund description for SPTM:
"The investment seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the SSGA Total Stock Market Index that tracks a broad universe of exchange traded U.S. equity securities.The fund generally invests substantially all, but at least 80%, of its total assets in the securities comprising the index. It may invest in equity securities that are not included in the index (including common stock, preferred stock, depositary receipts and shares of other investment companies), cash and cash equivalents or money market instruments. The fund is non-diversified. "
Thanks for the replies so far, I appreciate a second set of eyes.
"The investment seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the SSGA Total Stock Market Index that tracks a broad universe of exchange traded U.S. equity securities.The fund generally invests substantially all, but at least 80%, of its total assets in the securities comprising the index. It may invest in equity securities that are not included in the index (including common stock, preferred stock, depositary receipts and shares of other investment companies), cash and cash equivalents or money market instruments. The fund is non-diversified. "
Thanks for the replies so far, I appreciate a second set of eyes.