Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

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TropikThunder
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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by TropikThunder » Thu Oct 19, 2017 8:50 pm

avalpert wrote:
Thu Oct 19, 2017 4:28 pm
John Laurens wrote:
Thu Oct 19, 2017 4:22 pm

Russell Index 3000 was the old index under the old ticker. With the new ticker they will be tracking the SSGA total market index. Why would they track their “own” index? I assume to save money and control costs in their own interest. I wouldn’t want to be a guinea pig to find out how much tracking error their own index tracks an independent S&P Total Market Index.

Regards,
John
You do realize Vanguard did the exacts same thing 5 years ago to save costs, right? You were okay being a guinea pig then?
What do we know about the new SSGA Total Market Index? I haven't been able to find anything helpful. For example, how far down into small/micro caps does it go? I can see small differences in performance on a day-to-day basis between my Vanguard CSRP fund (VTSAX) and my TIAA Russell 3000 fund (TIQRX) depending on how small caps did relative to the rest of the market that day (the CSRP index goes farther down into micro's). VTSAX has ~3,600 stocks with an average market cap of $52.2B while TIQRX has ~3,000 holdings with an average market cap of $52.8B. Over the past 10 years there has only a slight difference between the two indices (with CSRP performing higher), but it would be nice to know.

avalpert
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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by avalpert » Thu Oct 19, 2017 9:22 pm

TropikThunder wrote:
Thu Oct 19, 2017 8:50 pm
avalpert wrote:
Thu Oct 19, 2017 4:28 pm
John Laurens wrote:
Thu Oct 19, 2017 4:22 pm

Russell Index 3000 was the old index under the old ticker. With the new ticker they will be tracking the SSGA total market index. Why would they track their “own” index? I assume to save money and control costs in their own interest. I wouldn’t want to be a guinea pig to find out how much tracking error their own index tracks an independent S&P Total Market Index.

Regards,
John
You do realize Vanguard did the exacts same thing 5 years ago to save costs, right? You were okay being a guinea pig then?
What do we know about the new SSGA Total Market Index? I haven't been able to find anything helpful. For example, how far down into small/micro caps does it go? I can see small differences in performance on a day-to-day basis between my Vanguard CSRP fund (VTSAX) and my TIAA Russell 3000 fund (TIQRX) depending on how small caps did relative to the rest of the market that day (the CSRP index goes farther down into micro's). VTSAX has ~3,600 stocks with an average market cap of $52.2B while TIQRX has ~3,000 holdings with an average market cap of $52.8B. Over the past 10 years there has only a slight difference between the two indices (with CSRP performing higher), but it would be nice to know.
I don't know that we know that yet - might have to wait until Mid-November when the changeover happens.

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tooluser
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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by tooluser » Thu Oct 19, 2017 9:48 pm

auntie wrote:
Thu Oct 19, 2017 2:45 pm
I don't know if he knew the size of my account or if he was (more likely) just phoning everyone on his list.
I'm pretty sure they have your account details in front of them when they call. I get a call from the nice man *only* when I deposit 10k or more. Since I don't want to talk to anybody I am lucky this does not happen often.

It was so incredibly awesome when I moved from a traditional discount broker to Datek Online back in the day. No more phone calls to get what I want! Huzzah!
"A calm and modest life brings more happiness than the pursuit of success combined with constant restlessness." -- Albert Einstein, just before he won the Nobel Prize.

TropikThunder
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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by TropikThunder » Thu Oct 19, 2017 11:48 pm

avalpert wrote:
Thu Oct 19, 2017 9:22 pm
TropikThunder wrote:
Thu Oct 19, 2017 8:50 pm
What do we know about the new SSGA Total Market Index? I haven't been able to find anything helpful. For example, how far down into small/micro caps does it go? I can see small differences in performance on a day-to-day basis between my Vanguard CSRP fund (VTSAX) and my TIAA Russell 3000 fund (TIQRX) depending on how small caps did relative to the rest of the market that day (the CSRP index goes farther down into micro's). VTSAX has ~3,600 stocks with an average market cap of $52.2B while TIQRX has ~3,000 holdings with an average market cap of $52.8B. Over the past 10 years there has only a slight difference between the two indices (with CSRP performing higher), but it would be nice to know.
I don't know that we know that yet - might have to wait until Mid-November when the changeover happens.
Fair enough. I'll probably end up using it since it will only be for my HSA, which is ~9% of my yearly contributions. I only want one fund in there and the one I'm using now is leaving the commission-free list.

Longtermgrowth
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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by Longtermgrowth » Fri Oct 20, 2017 4:53 am

livesoft wrote:
Thu Oct 19, 2017 10:52 am
nps wrote:
Thu Oct 19, 2017 10:48 am
All of them?

Current quote on SPTM is 31.73 bid, 31.74 ask, .01% premium

VTI is 131.31, 131.32, .02% premium
1 cent of 31.74 is 0.03% spread
1 cent of 131.32 is 0.008% spread

And yes, I know "premium" is something different from "bid/ask spread."

Anyways, one shouldn't pay the full spread.
I was just going by what etf.com said. When I look up SPTM (SPDR Portfolio Total Stock Market ETF) on etf.com, it's telling me the average spread (%) is 0.15%; VTI (Vanguard Total Stock Market ETF) average spread (%) 0.01%.

I like that the State Street funds expense ratios are now lowered, but the fact that they lowered them at the exact time they are becoming available on TDA, makes me wonder if they will always be competitive. I like the equal weight SPYD (SPDR Portfolio S&P 500 High Dividend ETF), but looking at average daily $ volume ($1.47M) and average spread (0.12%), no lump sums for me and limit orders placed with care.

nps
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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by nps » Fri Oct 20, 2017 5:54 am

Longtermgrowth wrote:
Fri Oct 20, 2017 4:53 am
livesoft wrote:
Thu Oct 19, 2017 10:52 am
nps wrote:
Thu Oct 19, 2017 10:48 am
All of them?

Current quote on SPTM is 31.73 bid, 31.74 ask, .01% premium

VTI is 131.31, 131.32, .02% premium
1 cent of 31.74 is 0.03% spread
1 cent of 131.32 is 0.008% spread

And yes, I know "premium" is something different from "bid/ask spread."

Anyways, one shouldn't pay the full spread.
I was just going by what etf.com said. When I look up SPTM (SPDR Portfolio Total Stock Market ETF) on etf.com, it's telling me the average spread (%) is 0.15%; VTI (Vanguard Total Stock Market ETF) average spread (%) 0.01%.

I like that the State Street funds expense ratios are now lowered, but the fact that they lowered them at the exact time they are becoming available on TDA, makes me wonder if they will always be competitive. I like the equal weight SPYD (SPDR Portfolio S&P 500 High Dividend ETF), but looking at average daily $ volume ($1.47M) and average spread (0.12%), no lump sums for me and limit orders placed with care.
I'm not convinced either and don't think I'll bet on it in my taxable account. I'm not so worried in my HSA. But the spread doesn't bother me. What you're showing is the impact share price has on a penny difference in bid/ask. The flip side is with a lower share price, you are likely to have less cash drag.

s2kmw
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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by s2kmw » Fri Oct 20, 2017 2:06 pm

is there a glaring reason NOT to expect the new funds to perform similarly to the corresponding vanguard ETFs?
seems like if the funds are tracking the same things, then they should perform similarly in the long run.

if the funds go out of existence for some reason, then will you lose the money in it?

avalpert
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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by avalpert » Fri Oct 20, 2017 2:52 pm

s2kmw wrote:
Fri Oct 20, 2017 2:06 pm
is there a glaring reason NOT to expect the new funds to perform similarly to the corresponding vanguard ETFs?
seems like if the funds are tracking the same things, then they should perform similarly in the long run.
No, there is no reason not to expect the performances to be very similar.
if the funds go out of existence for some reason, then will you lose the money in it?
You won't lose the money but you may have it distributed to you from the fund - if it is a tax-advantaged account then other than a bit of hassle it isn't a big deal, if it is a taxable account that distribution could trigger capital gains taxes that you would otherwise have avoided. But I don't think that is a big risk for any of the broad index funds.

asif408
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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by asif408 » Fri Oct 20, 2017 3:02 pm

s2kmw wrote:
Fri Oct 20, 2017 2:06 pm
is there a glaring reason NOT to expect the new funds to perform similarly to the corresponding vanguard ETFs?
seems like if the funds are tracking the same things, then they should perform similarly in the long run.
You can actually compare the composition of the SPDR funds to Vanguard's if you are so inclined using Morningstar or something similar. That would tell you if you should expect much difference. Just from a cursory glance of one or two of the total market funds this morning I don't see a discernible difference. That may not be true for some of the more specialty funds, but at least the core funds appear to be constructed very similar to Vanguard's.

deltaneutral83
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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by deltaneutral83 » Fri Oct 20, 2017 3:03 pm

s2kmw wrote:
Fri Oct 20, 2017 2:06 pm
is there a glaring reason NOT to expect the new funds to perform similarly to the corresponding vanguard ETFs?
seems like if the funds are tracking the same things, then they should perform similarly in the long run.

if the funds go out of existence for some reason, then will you lose the money in it?
I don't think the major total market indexes will be different. We all have capital gains most likely in our vanguard ETFs as of today. We (and I am a 2 funder, VTI/VEU) don't won't to start contributing to two new funds and muddy it up and bury those Vanguard ETFs for a few decades. Is it a huge deal, no, modest deal, yes. I will probably move in kind to Schwab/Merrill for the bonus in my taxable. TDA has fulfilled everything they promised, so I'm not angry, but am annoyed at the circumstance. I switched out of VTI into SPTM in my Roth and HSA at TDA. No big deal, I'll keep them there. Will make my taxable move closer to Nov 21.

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serbeer
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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by serbeer » Fri Oct 20, 2017 3:07 pm

s2kmw wrote:
Fri Oct 20, 2017 2:06 pm
is there a glaring reason NOT to expect the new funds to perform similarly to the corresponding vanguard ETFs?
seems like if the funds are tracking the same things, then they should perform similarly in the long run.
Similarly, yes. But if you invest for very long run, even small difference in performance can result in large difference down the road. The same effect as with small difference in ER in every given year making big difference down the road. There is definately more risk involved into investing into new index than into long established and time-proven one, so with new funds you are taking on more risk, that's for sure. And much much lower trading volume is definately not good--due to higher bid-ask spread.
s2kmw wrote:
Fri Oct 20, 2017 2:06 pm
if the funds go out of existence for some reason, then will you lose the money in it?
No, but in taxable accounts, if capital gains as significant, you may face very large tax bill not at the time of your choosing. Not very likely event, but not unheard of either.

avalpert
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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by avalpert » Fri Oct 20, 2017 3:22 pm

serbeer wrote:
Fri Oct 20, 2017 3:07 pm
s2kmw wrote:
Fri Oct 20, 2017 2:06 pm
is there a glaring reason NOT to expect the new funds to perform similarly to the corresponding vanguard ETFs?
seems like if the funds are tracking the same things, then they should perform similarly in the long run.
Similarly, yes. But if you invest for very long run, even small difference in performance can result in large difference down the road. The same effect as with small difference in ER in every given year making big difference down the road. There is definately more risk involved into investing into new index than into long established and time-proven one, so with new funds you are taking on more risk, that's for sure.
Keep in mind Vanguard isn't using long established, time-proven indices either for their core funds - they are using indices that were created 5 years ago.
And much much lower trading volume is definately not good--due to higher bid-ask spread.
Low volume shouldn't really impact bid/ask spreads in broad market ETFs much (a quick look at the bid/ask spread on SPEM and VWO compared to the volume should demonstrate that to you). The reason is because the ability for certain participants to create/destroy units using the underlying holdings acts to keep the spread in line (within the confines of the underlying holdings).
Low volume can impact your ability to buy/sell larger lots on demand though.

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ladders11
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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by ladders11 » Fri Oct 20, 2017 3:38 pm

It's as if you bought a jar of cookies. You worked hard all week to earn your money, and spent time going to the store and picking out your favorite cookies for your jar.

Then one evening you feel hungry and head to your kitchen. Right when you reach for your cookie jar, it disappears! Before you figure out what happened, your partner calls you with an amazing discovery - a cookie jar has appeared in the bathroom, right out of thin air!

You head over and confirm that, in fact, your cookie jar is right there on the bathroom floor. But, when you open the jar, you find that your cookies aren't inside - this jar has completely different cookies, you don't like most of them at first glance, and they're all disorganized, so it's even hard to sort. You notice there may actually be more cookies than you had in your old jar, and it even has one or two that you wish you'd had before. However, these definitely aren't your cookies, and these cookies have appeared in the bathroom out of thin air. You're stunned at this apparent exception to the laws of physics and can't quite find the words to explain what happened. You gaze at the toilet.

So, do you eat the bathroom cookies? Do you return the jar to your kitchen and take some time to think? Do you offer them to friends who visit? Do you go back to the store to repurchase your favorite cookies you had in your old jar? Do you eat more, or less?

Everyone may act differently in this situation, but things aren't the same. It's a simple fact that something has changed.

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serbeer
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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by serbeer » Fri Oct 20, 2017 6:12 pm

ladders11 wrote:
Fri Oct 20, 2017 3:38 pm
It's as if you bought a jar of cookies. You worked hard all week to earn your money, and spent time going to the store and picking out your favorite cookies for your jar.

Then one evening you feel hungry and head to your kitchen. Right when you reach for your cookie jar, it disappears! Before you figure out what happened, your partner calls you with an amazing discovery - a cookie jar has appeared in the bathroom, right out of thin air!

You head over and confirm that, in fact, your cookie jar is right there on the bathroom floor. But, when you open the jar, you find that your cookies aren't inside - this jar has completely different cookies, you don't like most of them at first glance, and they're all disorganized, so it's even hard to sort. You notice there may actually be more cookies than you had in your old jar, and it even has one or two that you wish you'd had before. However, these definitely aren't your cookies, and these cookies have appeared in the bathroom out of thin air. You're stunned at this apparent exception to the laws of physics and can't quite find the words to explain what happened. You gaze at the toilet.

So, do you eat the bathroom cookies? Do you return the jar to your kitchen and take some time to think? Do you offer them to friends who visit? Do you go back to the store to repurchase your favorite cookies you had in your old jar? Do you eat more, or less?

Everyone may act differently in this situation, but things aren't the same. It's a simple fact that something has changed.
This is funny! (and quite good)

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Earl Lemongrab
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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by Earl Lemongrab » Fri Oct 20, 2017 6:46 pm

Nice tale, but not accurate. It's like the store sent you a notice the bargain cookies that they carry and that you buy regularly won't be available at some point in the near future, but they will have a new bargain cookie brand. As always, it's a bad idea to try to compare investments that you keep for extended periods with consumables.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

michaeljc70
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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by michaeljc70 » Sat Oct 21, 2017 9:51 am

goingup wrote:
Thu Oct 19, 2017 10:40 am
Am I the only one that thinks this is kind of insidiously bad? I assume many folks migrated from Vanguard to TDA with their Vanguard ETFs to collect a bonus, and because it was free to buy/sell Vanguard ETFs there anyways.

Now that's changed. You'll have to pay fees to buy/sell Vanguard ETFs, so many folks will change to the ETFs that TDA actually makes money on. How can you not feel duped about that?

Sure, in business things change and prices change. It just seems as though this could have been the TDA business strategy all along. Not exactly bait and switch, but close. If you're an accumulator with a taxable account of Vanguard ETFs you may have to pay... say $50 to hundreds $$ more each year in fees. But you probably won't, because nobody wants to pay fees because they seem punitive. So you'll probably open NTF ETFs and queue up just as TDA knew you would! :annoyed
I transferred a large IRA to TDA from Vanguard for the bonus earlier this year. I don't change things much. so I am not so concerned about changing funds/trading fees. However, I was considering moving a taxable account from Vanguard from to TDA for another bonus. If I convert to iShares or something I will be hit will capital gains. That I make changes more frequently so the Vanguard funds will incur the trading fees.

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goingup
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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by goingup » Sat Oct 21, 2017 10:40 am

michaeljc70 wrote:
Sat Oct 21, 2017 9:51 am
goingup wrote:
Thu Oct 19, 2017 10:40 am
Am I the only one that thinks this is kind of insidiously bad? I assume many folks migrated from Vanguard to TDA with their Vanguard ETFs to collect a bonus, and because it was free to buy/sell Vanguard ETFs there anyways.

Now that's changed. You'll have to pay fees to buy/sell Vanguard ETFs, so many folks will change to the ETFs that TDA actually makes money on. How can you not feel duped about that?

Sure, in business things change and prices change. It just seems as though this could have been the TDA business strategy all along. Not exactly bait and switch, but close. If you're an accumulator with a taxable account of Vanguard ETFs you may have to pay... say $50 to hundreds $$ more each year in fees. But you probably won't, because nobody wants to pay fees because they seem punitive. So you'll probably open NTF ETFs and queue up just as TDA knew you would! :annoyed
I transferred a large IRA to TDA from Vanguard for the bonus earlier this year. I don't change things much. so I am not so concerned about changing funds/trading fees. However, I was considering moving a taxable account from Vanguard from to TDA for another bonus. If I convert to iShares or something I will be hit will capital gains. That I make changes more frequently so the Vanguard funds will incur the trading fees.
Yes, your situation is a perfect case in point. TDA is "nudging" you to use ETFs other than Vanguard's. The sticking point is embedded capital gains in your Vanguard ETFs. An accumulator who makes a lot of purchases a year in a taxable account may have to decide whether to stay and pay fees, migrate to another brokerage, or open parallel NTF ETFs.

Nisiprius has described some of these bonus situations as akin to stealing the cheese from the mousetrap. Sometimes it works, and sometimes it doesn't work out so well.

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tfb
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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by tfb » Sat Oct 21, 2017 10:47 am

avalpert wrote:
Fri Oct 20, 2017 3:22 pm
Low volume shouldn't really impact bid/ask spreads in broad market ETFs much (a quick look at the bid/ask spread on SPEM and VWO compared to the volume should demonstrate that to you). The reason is because the ability for certain participants to create/destroy units using the underlying holdings acts to keep the spread in line (within the confines of the underlying holdings).
Low volume can impact your ability to buy/sell larger lots on demand though.
Exactly. The low spread displayed is for 100 shares. Try put in a market order for 1,000 shares and see what prices you get.
Harry Sit, taking a break from the forums.

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Earl Lemongrab
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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by Earl Lemongrab » Sat Oct 21, 2017 11:00 am

goingup wrote:
Sat Oct 21, 2017 10:40 am
Nisiprius has described some of these bonus situations as akin to stealing the cheese from the mousetrap. Sometimes it works, and sometimes it doesn't work out so well.
Sorry, but this is silly. No one is trapped anywhere. If you don't like the TDA deal, move somewhere where you to DO like the deal. I've mentioned Merrill Edge.

The idea that TDA had some long con in place several years to trick people into buying Vanguard and iShares ETFs (the horror) then switch away from them on their free list (something most brokerages don't even have) so people would be "stuck" with capital gains just isn't credible.

The much more probable explanation is that they reached a deal with the providers of these ETFs to have them prominent on the free list by removing some competition.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

michaeljc70
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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by michaeljc70 » Sat Oct 21, 2017 11:05 am

Earl Lemongrab wrote:
Sat Oct 21, 2017 11:00 am
goingup wrote:
Sat Oct 21, 2017 10:40 am
Nisiprius has described some of these bonus situations as akin to stealing the cheese from the mousetrap. Sometimes it works, and sometimes it doesn't work out so well.
Sorry, but this is silly. No one is trapped anywhere. If you don't like the TDA deal, move somewhere where you to DO like the deal. I've mentioned Merrill Edge.

The idea that TDA had some long con in place several years to trick people into buying Vanguard and iShares ETFs (the horror) then switch away from them on their free list (something most brokerages don't even have) so people would be "stuck" with capital gains just isn't credible.

The much more probable explanation is that they reached a deal with the providers of these ETFs to have them prominent on the free list by removing some competition.
Trapped might be a strong word. However, some (those with taxable accounts) may have 2 options: sell and move into different funds (either at TDA or another brokerage) incurring big capital gains or eat the ETF fees. Granted, depending on how many trades you make, eating the ETF fees generally will not be that big of a deal. If you like to DCA on a monthly basis though and have multiple funds, it could be a few hundred bucks a year.

Saving$
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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by Saving$ » Sat Oct 21, 2017 11:08 am

I've read this entire thread, and others, as well as the wiki (https://www.bogleheads.org/wiki/Three-f ... head-style ) and am still confused. Can someone please confirm or correct the following:

If you have or will have a tax advantaged account at TDA (such as an HSA, Roth, IRA, etc), your current best (lowest cost, most similar) approximation for a the three fund portfolio is:
For total stock market = SPTM (from SPDR family of ETF's) - with ER of 0.1%
For international = IAGG (From iShares family of ETF's) - with ER of 0.09% or SPDW with ER of 0.05% + SPEM with ER unavailable (both from SPDR family)
For total bond = SPAB (from SPDR family of ETF's) - with ER of 0.04%

Further, the above information supersedes what is currently listed in the wiki, which would also lead you to the SPDR family of ETF's, but to:
For total stock market = THRK - with ER of 0.1%
For international = CWI - with ER of 0.3%
For total bond = BNDS - with ER of 0.08%

If the above is not accurate, please advise. If the above is accurate,
1. is it correct that TDA is offering both the SPTM and iShares ETF's as commission free?
2. What is the proper percentage of SPDW + SPEM to get the international component of a 3 fund?
3. Do ETF's give dividends? If so, how does dividend reinvestment work with an ETF at TDA in a tax advantaged account?

Thanks!

avalpert
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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by avalpert » Sat Oct 21, 2017 11:15 am

michaeljc70 wrote:
Sat Oct 21, 2017 11:05 am
Earl Lemongrab wrote:
Sat Oct 21, 2017 11:00 am
goingup wrote:
Sat Oct 21, 2017 10:40 am
Nisiprius has described some of these bonus situations as akin to stealing the cheese from the mousetrap. Sometimes it works, and sometimes it doesn't work out so well.
Sorry, but this is silly. No one is trapped anywhere. If you don't like the TDA deal, move somewhere where you to DO like the deal. I've mentioned Merrill Edge.

The idea that TDA had some long con in place several years to trick people into buying Vanguard and iShares ETFs (the horror) then switch away from them on their free list (something most brokerages don't even have) so people would be "stuck" with capital gains just isn't credible.

The much more probable explanation is that they reached a deal with the providers of these ETFs to have them prominent on the free list by removing some competition.
Trapped might be a strong word. However, some (those with taxable accounts) may have 2 options: sell and move into different funds (either at TDA or another brokerage) incurring big capital gains or eat the ETF fees. Granted, depending on how many trades you make, eating the ETF fees generally will not be that big of a deal. If you like to DCA on a monthly basis though and have multiple funds, it could be a few hundred bucks a year.
There is a third option to keep their current holdings and use new commission-free alternatives for new purchases - and voila no capital gains and no ETF fees.

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goingup
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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by goingup » Sat Oct 21, 2017 11:25 am

michaeljc70 wrote:
Sat Oct 21, 2017 11:05 am
Earl Lemongrab wrote:
Sat Oct 21, 2017 11:00 am
goingup wrote:
Sat Oct 21, 2017 10:40 am
Nisiprius has described some of these bonus situations as akin to stealing the cheese from the mousetrap. Sometimes it works, and sometimes it doesn't work out so well.
Sorry, but this is silly. No one is trapped anywhere. If you don't like the TDA deal, move somewhere where you to DO like the deal. I've mentioned Merrill Edge.

The idea that TDA had some long con in place several years to trick people into buying Vanguard and iShares ETFs (the horror) then switch away from them on their free list (something most brokerages don't even have) so people would be "stuck" with capital gains just isn't credible.

The much more probable explanation is that they reached a deal with the providers of these ETFs to have them prominent on the free list by removing some competition.
Trapped might be a strong word. However, some (those with taxable accounts) may have 2 options: sell and move into different funds (either at TDA or another brokerage) incurring big capital gains or eat the ETF fees. Granted, depending on how many trades you make, eating the ETF fees generally will not be that big of a deal. If you like to DCA on a monthly basis though and have multiple funds, it could be a few hundred bucks a year.
Not trapped, but the rules changed and that can affect the way you planned to invest. I've made 35 buys so far this year so that would be a couple hundred in fees, if I were at TDA. Our embedded gains are considerable so there would be no switching.

Earl, you switch constantly so you're not particularly sympathetic to folks playing the long game who have no desire to hop around to different firms. Yes, I absolutely believe that TDA planned to bring assets over from other firms then "nudge" investors into the funds that would make TDA more money. Just as I think Wealthfront knew all along that it would get people hooked then raise fees. And that WellsTrade would change the rules and begin to limit free trades.

My point is that you better be nimble if you want to chase the bonuses because the rules will change.

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Earl Lemongrab
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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by Earl Lemongrab » Sat Oct 21, 2017 11:45 am

michaeljc70 wrote:
Sat Oct 21, 2017 11:05 am
Trapped might be a strong word. However, some (those with taxable accounts) may have 2 options: sell and move into different funds (either at TDA or another brokerage) incurring big capital gains or eat the ETF fees. Granted, depending on how many trades you make, eating the ETF fees generally will not be that big of a deal. If you like to DCA on a monthly basis though and have multiple funds, it could be a few hundred bucks a year.
No, you DON'T have to sell. You can keep what you have and buy the new ones as needed. If you need to sell while at TDA, then you pay the commission fee.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by michaeljc70 » Sat Oct 21, 2017 11:50 am

avalpert wrote:
Sat Oct 21, 2017 11:15 am
michaeljc70 wrote:
Sat Oct 21, 2017 11:05 am
Earl Lemongrab wrote:
Sat Oct 21, 2017 11:00 am
goingup wrote:
Sat Oct 21, 2017 10:40 am
Nisiprius has described some of these bonus situations as akin to stealing the cheese from the mousetrap. Sometimes it works, and sometimes it doesn't work out so well.
Sorry, but this is silly. No one is trapped anywhere. If you don't like the TDA deal, move somewhere where you to DO like the deal. I've mentioned Merrill Edge.

The idea that TDA had some long con in place several years to trick people into buying Vanguard and iShares ETFs (the horror) then switch away from them on their free list (something most brokerages don't even have) so people would be "stuck" with capital gains just isn't credible.

The much more probable explanation is that they reached a deal with the providers of these ETFs to have them prominent on the free list by removing some competition.
Trapped might be a strong word. However, some (those with taxable accounts) may have 2 options: sell and move into different funds (either at TDA or another brokerage) incurring big capital gains or eat the ETF fees. Granted, depending on how many trades you make, eating the ETF fees generally will not be that big of a deal. If you like to DCA on a monthly basis though and have multiple funds, it could be a few hundred bucks a year.
There is a third option to keep their current holdings and use new commission-free alternatives for new purchases - and voila no capital gains and no ETF fees.
Yes, you can do that....but no longer have a 3 fund (or however many) portfolio. I guess it is more like a virtual 3 fund portfolio.

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Earl Lemongrab
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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by Earl Lemongrab » Sat Oct 21, 2017 11:52 am

goingup wrote:
Sat Oct 21, 2017 11:25 am
Not trapped, but the rules changed and that can affect the way you planned to invest. I've made 35 buys so far this year so that would be a couple hundred in fees, if I were at TDA. Our embedded gains are considerable so there would be no switching.

Earl, you switch constantly so you're not particularly sympathetic to folks playing the long game who have no desire to hop around to different firms. Yes, I absolutely believe that TDA planned to bring assets over from other firms then "nudge" investors into the funds that would make TDA more money. Just as I think Wealthfront knew all along that it would get people hooked then raise fees. And that WellsTrade would change the rules and begin to limit free trades.

My point is that you better be nimble if you want to chase the bonuses because the rules will change.
Yes, things in business change. Generally for the better these days, look at the trend for both ERs and commissions. Doesn't happen to be as good a change this time.

As I just said, there is no requirement to switch anything. Removing the ETFs from the list doesn't mean that you can't keep them. You can stay at TDA if you like it there otherwise, although from the sturm und drang I'd think you'd already be in the process of transferring.

Companies generally don't do things that they think will cost them money. Whether that benefits a particular customer or not is a different matter.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by drk » Sat Oct 21, 2017 12:04 pm

Earl Lemongrab wrote:
Sat Oct 21, 2017 11:00 am
The much more probable explanation is that they reached a deal with the providers of these ETFs to have them prominent on the free list by removing some competition.
That's actually what does bother me. The commission-free list was a big selling point for TDA. On the page comparing TDA with competitors, TDA still tout its "Commission-free ETFs selected by independent third-parties." While the kickbacks from State Street and others are likely the most prominent reason, it's hard to believe that they undertook this change without knowing that there is some friction involved in moving assets elsewhere.*

* I can't help noting that Richard Thaler won the NPE the week before this announcement.

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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by Chuffly » Sat Oct 21, 2017 12:29 pm

michaeljc70 wrote:
Sat Oct 21, 2017 11:05 am
Earl Lemongrab wrote:
Sat Oct 21, 2017 11:00 am
goingup wrote:
Sat Oct 21, 2017 10:40 am
Nisiprius has described some of these bonus situations as akin to stealing the cheese from the mousetrap. Sometimes it works, and sometimes it doesn't work out so well.
Sorry, but this is silly. No one is trapped anywhere. If you don't like the TDA deal, move somewhere where you to DO like the deal. I've mentioned Merrill Edge.

The idea that TDA had some long con in place several years to trick people into buying Vanguard and iShares ETFs (the horror) then switch away from them on their free list (something most brokerages don't even have) so people would be "stuck" with capital gains just isn't credible.

The much more probable explanation is that they reached a deal with the providers of these ETFs to have them prominent on the free list by removing some competition.
Trapped might be a strong word. However, some (those with taxable accounts) may have 2 options: sell and move into different funds (either at TDA or another brokerage) incurring big capital gains or eat the ETF fees. Granted, depending on how many trades you make, eating the ETF fees generally will not be that big of a deal. If you like to DCA on a monthly basis though and have multiple funds, it could be a few hundred bucks a year.
Why are those the only two options for a taxable account? Not sure why switching brokerages requires liquidating all of your assets and taking unnecessary cap gains hits.

Why not transfer (in kind) to a brokerage where they will let you trade your preferred ETF's commission free?

Vanguard seems like they would be happy to do that for you:

https://investor.vanguard.com/account-t ... -questions

michaeljc70
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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by michaeljc70 » Sat Oct 21, 2017 12:32 pm

Chuffly wrote:
Sat Oct 21, 2017 12:29 pm
michaeljc70 wrote:
Sat Oct 21, 2017 11:05 am
Earl Lemongrab wrote:
Sat Oct 21, 2017 11:00 am
goingup wrote:
Sat Oct 21, 2017 10:40 am
Nisiprius has described some of these bonus situations as akin to stealing the cheese from the mousetrap. Sometimes it works, and sometimes it doesn't work out so well.
Sorry, but this is silly. No one is trapped anywhere. If you don't like the TDA deal, move somewhere where you to DO like the deal. I've mentioned Merrill Edge.

The idea that TDA had some long con in place several years to trick people into buying Vanguard and iShares ETFs (the horror) then switch away from them on their free list (something most brokerages don't even have) so people would be "stuck" with capital gains just isn't credible.

The much more probable explanation is that they reached a deal with the providers of these ETFs to have them prominent on the free list by removing some competition.
Trapped might be a strong word. However, some (those with taxable accounts) may have 2 options: sell and move into different funds (either at TDA or another brokerage) incurring big capital gains or eat the ETF fees. Granted, depending on how many trades you make, eating the ETF fees generally will not be that big of a deal. If you like to DCA on a monthly basis though and have multiple funds, it could be a few hundred bucks a year.
Why are those the only two options for a taxable account? Not sure why switching brokerages requires liquidating all of your assets and taking unnecessary cap gains hits.

Why not transfer (in kind) to a brokerage where they will let you trade your preferred ETF's commission free?

Vanguard seems like they would be happy to do that for you:

https://investor.vanguard.com/account-t ... -questions
That is an option. That is going to limit where you can transfer to. I left Vanguard due to bad service.

John Laurens
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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by John Laurens » Sat Oct 21, 2017 12:51 pm

goingup wrote:
Sat Oct 21, 2017 11:25 am
michaeljc70 wrote:
Sat Oct 21, 2017 11:05 am
Earl Lemongrab wrote:
Sat Oct 21, 2017 11:00 am
goingup wrote:
Sat Oct 21, 2017 10:40 am
Nisiprius has described some of these bonus situations as akin to stealing the cheese from the mousetrap. Sometimes it works, and sometimes it doesn't work out so well.
Sorry, but this is silly. No one is trapped anywhere. If you don't like the TDA deal, move somewhere where you to DO like the deal. I've mentioned Merrill Edge.

The idea that TDA had some long con in place several years to trick people into buying Vanguard and iShares ETFs (the horror) then switch away from them on their free list (something most brokerages don't even have) so people would be "stuck" with capital gains just isn't credible.

The much more probable explanation is that they reached a deal with the providers of these ETFs to have them prominent on the free list by removing some competition.
Trapped might be a strong word. However, some (those with taxable accounts) may have 2 options: sell and move into different funds (either at TDA or another brokerage) incurring big capital gains or eat the ETF fees. Granted, depending on how many trades you make, eating the ETF fees generally will not be that big of a deal. If you like to DCA on a monthly basis though and have multiple funds, it could be a few hundred bucks a year.
Not trapped, but the rules changed and that can affect the way you planned to invest. I've made 35 buys so far this year so that would be a couple hundred in fees, if I were at TDA. Our embedded gains are considerable so there would be no switching.

Earl, you switch constantly so you're not particularly sympathetic to folks playing the long game who have no desire to hop around to different firms. Yes, I absolutely believe that TDA planned to bring assets over from other firms then "nudge" investors into the funds that would make TDA more money. Just as I think Wealthfront knew all along that it would get people hooked then raise fees. And that WellsTrade would change the rules and begin to limit free trades.

My point is that you better be nimble if you want to chase the bonuses because the rules will change.
For clarification, Wealthfront hasn’t raised fees. They’ve only added value for the same 0.25%. (I’m not a customer). Betterment has raised fees.

Regards,
John

tj
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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by tj » Sat Oct 21, 2017 1:03 pm

michaeljc70 wrote:
Sat Oct 21, 2017 12:32 pm
Chuffly wrote:
Sat Oct 21, 2017 12:29 pm
michaeljc70 wrote:
Sat Oct 21, 2017 11:05 am
Earl Lemongrab wrote:
Sat Oct 21, 2017 11:00 am
goingup wrote:
Sat Oct 21, 2017 10:40 am
Nisiprius has described some of these bonus situations as akin to stealing the cheese from the mousetrap. Sometimes it works, and sometimes it doesn't work out so well.
Sorry, but this is silly. No one is trapped anywhere. If you don't like the TDA deal, move somewhere where you to DO like the deal. I've mentioned Merrill Edge.

The idea that TDA had some long con in place several years to trick people into buying Vanguard and iShares ETFs (the horror) then switch away from them on their free list (something most brokerages don't even have) so people would be "stuck" with capital gains just isn't credible.

The much more probable explanation is that they reached a deal with the providers of these ETFs to have them prominent on the free list by removing some competition.
Trapped might be a strong word. However, some (those with taxable accounts) may have 2 options: sell and move into different funds (either at TDA or another brokerage) incurring big capital gains or eat the ETF fees. Granted, depending on how many trades you make, eating the ETF fees generally will not be that big of a deal. If you like to DCA on a monthly basis though and have multiple funds, it could be a few hundred bucks a year.
Why are those the only two options for a taxable account? Not sure why switching brokerages requires liquidating all of your assets and taking unnecessary cap gains hits.

Why not transfer (in kind) to a brokerage where they will let you trade your preferred ETF's commission free?

Vanguard seems like they would be happy to do that for you:

https://investor.vanguard.com/account-t ... -questions
That is an option. That is going to limit where you can transfer to. I left Vanguard due to bad service.
Pick Merrill Edge then. They'll more than cover the transfer out fee. Plus, open a token Bank of America checking account and you'll get more free ETF trades than you'll ever need.

avalpert
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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by avalpert » Sat Oct 21, 2017 1:56 pm

michaeljc70 wrote:
Sat Oct 21, 2017 11:50 am
avalpert wrote:
Sat Oct 21, 2017 11:15 am
michaeljc70 wrote:
Sat Oct 21, 2017 11:05 am
Earl Lemongrab wrote:
Sat Oct 21, 2017 11:00 am
goingup wrote:
Sat Oct 21, 2017 10:40 am
Nisiprius has described some of these bonus situations as akin to stealing the cheese from the mousetrap. Sometimes it works, and sometimes it doesn't work out so well.
Sorry, but this is silly. No one is trapped anywhere. If you don't like the TDA deal, move somewhere where you to DO like the deal. I've mentioned Merrill Edge.

The idea that TDA had some long con in place several years to trick people into buying Vanguard and iShares ETFs (the horror) then switch away from them on their free list (something most brokerages don't even have) so people would be "stuck" with capital gains just isn't credible.

The much more probable explanation is that they reached a deal with the providers of these ETFs to have them prominent on the free list by removing some competition.
Trapped might be a strong word. However, some (those with taxable accounts) may have 2 options: sell and move into different funds (either at TDA or another brokerage) incurring big capital gains or eat the ETF fees. Granted, depending on how many trades you make, eating the ETF fees generally will not be that big of a deal. If you like to DCA on a monthly basis though and have multiple funds, it could be a few hundred bucks a year.
There is a third option to keep their current holdings and use new commission-free alternatives for new purchases - and voila no capital gains and no ETF fees.
Yes, you can do that....but no longer have a 3 fund (or however many) portfolio. I guess it is more like a virtual 3 fund portfolio.
It wouldn't have exactly 3 funds no but it would have identical characteristics from an investment perspective to a 3 fund portfolio and that is what is important.

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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by ladders11 » Sat Oct 21, 2017 8:36 pm

Saving$ wrote:
Sat Oct 21, 2017 11:08 am
I've read this entire thread, and others, as well as the wiki (https://www.bogleheads.org/wiki/Three-f ... head-style ) and am still confused. Can someone please confirm or correct the following:

If you have or will have a tax advantaged account at TDA (such as an HSA, Roth, IRA, etc), your current best (lowest cost, most similar) approximation for a the three fund portfolio is:
For total stock market = SPTM (from SPDR family of ETF's) - with ER of 0.1%
For international = IAGG (From iShares family of ETF's) - with ER of 0.09% or SPDW with ER of 0.05% + SPEM with ER unavailable (both from SPDR family)
For total bond = SPAB (from SPDR family of ETF's) - with ER of 0.04%

Further, the above information supersedes what is currently listed in the wiki, which would also lead you to the SPDR family of ETF's, but to:
For total stock market = THRK - with ER of 0.1%
For international = CWI - with ER of 0.3%
For total bond = BNDS - with ER of 0.08%

If the above is not accurate, please advise. If the above is accurate,
1. is it correct that TDA is offering both the SPTM and iShares ETF's as commission free?
2. What is the proper percentage of SPDW + SPEM to get the international component of a 3 fund?
3. Do ETF's give dividends? If so, how does dividend reinvestment work with an ETF at TDA in a tax advantaged account?

Thanks!
For US equities you can use SPTM. For international developed equities you need to use SPDW and emerging SPEM. What you are indicating is IAGG which is international bonds, not equities. And the US bond fund is SPAB.

State Street has a website here: https://us.spdrs.com/product/ and it is necessary to visit them directly due to the recent changes made to their funds.

Most of the iShares aren't commission free anymore, some are. Dividend reinvestment is available under "My Account".

TropikThunder
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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by TropikThunder » Sat Oct 21, 2017 11:57 pm

Saving$ wrote:
Sat Oct 21, 2017 11:08 am
For total stock market = SPTM (from SPDR family of ETF's) - with ER of 0.1%
For international = IAGG (From iShares family of ETF's) - with ER of 0.09% or SPDW with ER of 0.05% + SPEM with ER unavailable (both from SPDR family)
For total bond = SPAB (from SPDR family of ETF's) - with ER of 0.04%

Further, the above information supersedes what is currently listed in the wiki, which would also lead you to the SPDR family of ETF's, but to:
For total stock market = THRK - with ER of 0.1%
For international = CWI - with ER of 0.3%
For total bond = BNDS - with ER of 0.08%

If the above is not accurate, please advise. If the above is accurate,
1. is it correct that TDA is offering both the SPTM and iShares ETF's as commission free?
2. What is the proper percentage of SPDW + SPEM to get the international component of a 3 fund?
3. Do ETF's give dividends? If so, how does dividend reinvestment work with an ETF at TDA in a tax advantaged account?

Thanks!
SPDR changed the names and ERs, THRK at 0/10% is now SPTM at 0.03%, BNDS is now SPAB, etc. The Wiki should have the new names.

Dividend reinvestment at TDA works like it does everywhere else, you can select whether to reinvest each holding. They don't charge transaction fees for dividend reinvesting even if the ETF itself is not commission-free.

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serbeer
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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by serbeer » Mon Oct 23, 2017 12:06 pm

avalpert wrote:
Sat Oct 21, 2017 11:15 am
There is a third option to keep their current holdings and use new commission-free alternatives for new purchases - and voila no capital gains and no ETF fees.
That 3rd option would not work for those of us who want to be able to TLH when it becomes possible (definately will be the case at some point in the near future) and for those who are in distribution phase trying to pull out the ~4% out of accounts annually--or need to sell for RMD reasons.

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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by avalpert » Mon Oct 23, 2017 12:12 pm

serbeer wrote:
Mon Oct 23, 2017 12:06 pm
avalpert wrote:
Sat Oct 21, 2017 11:15 am
There is a third option to keep their current holdings and use new commission-free alternatives for new purchases - and voila no capital gains and no ETF fees.
That 3rd option would not work for those of us who want to be able to TLH when it becomes possible (definately will be the case at some point in the near future) and for those who are in distribution phase trying to pull out the ~4% out of accounts annually--or need to sell for RMD reasons.
Sure it would, if you are selling for TLH purposes you have already eliminated the capital gain tax issue and swallowing $6.95 in commissions shouldn't be a big deal as you get to move into the new commission free option on the other end of the trade. As for distribution phase, you can always transfer in-kind to whatever brokerage will let you sell whatever holdings for free - again, the capital gains issue is no longer relevant as you are selling the lot either way.

As for whether you will 'definately' be TLHing in the near future - well, I wouldn't hold my breath.

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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by triceratop » Mon Oct 23, 2017 12:17 pm

tfb wrote:
Sat Oct 21, 2017 10:47 am
avalpert wrote:
Fri Oct 20, 2017 3:22 pm
Low volume shouldn't really impact bid/ask spreads in broad market ETFs much (a quick look at the bid/ask spread on SPEM and VWO compared to the volume should demonstrate that to you). The reason is because the ability for certain participants to create/destroy units using the underlying holdings acts to keep the spread in line (within the confines of the underlying holdings).
Low volume can impact your ability to buy/sell larger lots on demand though.
Exactly. The low spread displayed is for 100 shares. Try put in a market order for 1,000 shares and see what prices you get.
It's certainly true for 100 shares, but that doesn't mean it's only true for 100 shares. As of the moment (early afternoon trading) you will get 600 shares at the ask, 400 at the bid. (Compare to 59,800/34,100 at the bid/ask for VWO)

After that, who knows. Maybe livesoft will be along to tell us what the Level II quotes look like.
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

avalpert
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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by avalpert » Mon Oct 23, 2017 12:42 pm

triceratop wrote:
Mon Oct 23, 2017 12:17 pm
tfb wrote:
Sat Oct 21, 2017 10:47 am
avalpert wrote:
Fri Oct 20, 2017 3:22 pm
Low volume shouldn't really impact bid/ask spreads in broad market ETFs much (a quick look at the bid/ask spread on SPEM and VWO compared to the volume should demonstrate that to you). The reason is because the ability for certain participants to create/destroy units using the underlying holdings acts to keep the spread in line (within the confines of the underlying holdings).
Low volume can impact your ability to buy/sell larger lots on demand though.
Exactly. The low spread displayed is for 100 shares. Try put in a market order for 1,000 shares and see what prices you get.
It's certainly true for 100 shares, but that doesn't mean it's only true for 100 shares. As of the moment (early afternoon trading) you will get 600 shares at the ask, 400 at the bid. (Compare to 59,800/34,100 at the bid/ask for VWO)

After that, who knows. Maybe livesoft will be along to tell us what the Level II quotes look like.
Who needs Livesoft, TD Ameritrade provides them on their trading platform for free...

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triceratop
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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by triceratop » Mon Oct 23, 2017 1:16 pm

avalpert wrote:
Mon Oct 23, 2017 12:42 pm
triceratop wrote:
Mon Oct 23, 2017 12:17 pm
tfb wrote:
Sat Oct 21, 2017 10:47 am
avalpert wrote:
Fri Oct 20, 2017 3:22 pm
Low volume shouldn't really impact bid/ask spreads in broad market ETFs much (a quick look at the bid/ask spread on SPEM and VWO compared to the volume should demonstrate that to you). The reason is because the ability for certain participants to create/destroy units using the underlying holdings acts to keep the spread in line (within the confines of the underlying holdings).
Low volume can impact your ability to buy/sell larger lots on demand though.
Exactly. The low spread displayed is for 100 shares. Try put in a market order for 1,000 shares and see what prices you get.
It's certainly true for 100 shares, but that doesn't mean it's only true for 100 shares. As of the moment (early afternoon trading) you will get 600 shares at the ask, 400 at the bid. (Compare to 59,800/34,100 at the bid/ask for VWO)

After that, who knows. Maybe livesoft will be along to tell us what the Level II quotes look like.
Who needs Livesoft, TD Ameritrade provides them on their trading platform for free...
Touché.
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by TropikThunder » Mon Oct 23, 2017 3:07 pm

triceratop wrote:
Mon Oct 23, 2017 1:16 pm
avalpert wrote:
Mon Oct 23, 2017 12:42 pm
triceratop wrote:
Mon Oct 23, 2017 12:17 pm
tfb wrote:
Sat Oct 21, 2017 10:47 am
avalpert wrote:
Fri Oct 20, 2017 3:22 pm
Low volume shouldn't really impact bid/ask spreads in broad market ETFs much (a quick look at the bid/ask spread on SPEM and VWO compared to the volume should demonstrate that to you). The reason is because the ability for certain participants to create/destroy units using the underlying holdings acts to keep the spread in line (within the confines of the underlying holdings).
Low volume can impact your ability to buy/sell larger lots on demand though.
Exactly. The low spread displayed is for 100 shares. Try put in a market order for 1,000 shares and see what prices you get.
It's certainly true for 100 shares, but that doesn't mean it's only true for 100 shares. As of the moment (early afternoon trading) you will get 600 shares at the ask, 400 at the bid. (Compare to 59,800/34,100 at the bid/ask for VWO)

After that, who knows. Maybe livesoft will be along to tell us what the Level II quotes look like.
Who needs Livesoft, TD Ameritrade provides them on their trading platform for free...
Touché.
I've been watching the trading for SPTM today since I needed to do some rebalancing between accounts and the spread has consistently been $0.01-0.02 per share all day with the Level II hardly straying at all from that (to the extent TDA shows you on the 1-page Level II listing). For example, I bought some at $31.87 a few minutes before close and the Level II lowest bid was $31.85 while the highest ask was $31.89. Also, volume today was about 7x the last 10 day average, probably some combination of profit taking in the overall market plus new money being driven into the fund by the TDA decision. I'm not going to be actively trading SPTM obviously, so I don't see what all the fuss is about re: bid/ask spread. Yes, the bid/ask spread will be higher on a per-share percentage basis vs VTI but really, you can't get lower than $0.01.

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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by serbeer » Mon Oct 23, 2017 3:31 pm

Looks like not only consumers but also financial advisors are affected by this change and evaluating their options.
http://www.etf.com/sections/features-an ... nopaging=1

Myself, I am close to completion of personal evaluation.

My number one choice, probably what I going to do, is moving my family accounts and those of my parents (total number of accounts in double digits as there are joint and multiple retirement ones per person too) to Merill Edge where both families can qualify for Preferred Platinum status and consequently have at least 30 free trades per month. We would have to also open BOA checking accounts, still have to figure out if one per person or per family, but they would be fee-free due to Merill Edge account balance. They would not be used, but we could keep, say, $5 in them to keep it open.

Both families would also be eligible for "up to $600 bonus" Merill Edge offers, up to 2 bonuses per person actually on taxable and retirement accounts. This is definitely icing on the cake, and the way for me to look at the situation as lemon turned into lemonade, though bonus by itself would not be enough to compel me to switch I must admit, too much hassle with so many accounts I must say.

The risk is that Merill Edge may change their policies, but I think in this case existing members would be grandfathered in, just as they were for Wells Trade program at Wells Fargo.

Another option is to stay put with TDA adding new money into State Street ETF. But my parents definitely have to move as they are about to enter into distribution phase, and I don't think I should stay either because I'd want to TLH freely and don't want commission considerations to impact my AA considerations either if that can be helped--and it certainly can be nowadays it seems.

FinancialDave
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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by FinancialDave » Mon Oct 23, 2017 3:48 pm

ChicagoSparty wrote:
Wed Oct 18, 2017 8:51 am
Anyone planning to leave TD Ameritrade because of this? If you are planning to leave where will you be going?

I am annoyed as a VTI, VEU, and BND holder at TD, but I don't want to jump to any conclusions about my possibility of leaving before I think it through. I have been very happy with the service at TD for the last couple years with my Roth IRA, and I rolled my old 401k to an IRA at TD as well. If I left I would prefer Schwab or Fidelity, but at this point I just don't know.
Yes,
Planning to close my account at the end of the year and pick up the Vanguard fund in my Vanguard account.

Series of problems leading up to this was:
1. Account hack a number of years ago of TDA site that resulted in a relative having identity stolen.
2. Recent 1099-R in which the IRS got the withholding as zero dollars even though my copy was correct. Don't know exactly whose fault this was, but I'll blame TDA anyway.
3. I don't believe in the whole list of new commission free ETF's there is a one with enough liquidity to make it a better buy than the Vanguard ones vacated. I don't see how about half of them (or more) are even viable investments that anyone would want to own and by their present ownership they are very thinly owned.

Dave
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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by beehappy » Mon Oct 23, 2017 4:49 pm

I'm surprised there's not more talk of people migrating to Merrill Edge. For a $100k at Merrill, you're treated like royalty. I get 100 free trades a month. That's more than enough for all my trading needs, be the vanguard ETFs or something else. I don't have to make any of these trade offs between commissions and ETF quality or trading volume. And I haven't even touched the 5.5% to 2.625% I get back in credit card rewards with no fee. I understand folks who're stuck with TD because of employer plans/employer H.S.A. But for the others, if you migrate to Merrill Edge, not only are you likely getting a signup bonus (with only 90'day holding), you're also likely to get more free trades per mont than you can use in a whole year!

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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by Earl Lemongrab » Mon Oct 23, 2017 5:16 pm

Really you only need 50k at Edge, as 30 trades/month is generally plenty for Bogleheads. I've said that if I had pick one, it would ME currently. The differences in trading platforms isn't that meaningful to me, as I just don't trade that often or in very large volumes.

But I don't have to pick one, so I'll keep moving around for bonuses. It was nice being able to buy off the Vanguard/iShares list at TDA, but not that big of a deal.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by avalpert » Mon Oct 23, 2017 5:25 pm

And I too have accounts at both - if I had to pick one I would definitely stick with TDA. Trade execution alone would make up for the commission - but I'm also fine with commission-free alternatives that are now available (at least as fine as I was before). It also offers easier account management for someone with many different account types across multiple owners, has proven useful for free foreign wire transfers among other services and good customer service.

Everyone needs to evaluate their own needs - my hunch is for most on this board, when looked at rationally the commission-free list changes are a very minor impact on that evaluation.

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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by triceratop » Mon Oct 23, 2017 5:54 pm

avalpert wrote:
Mon Oct 23, 2017 5:25 pm
And I too have accounts at both - if I had to pick one I would definitely stick with TDA. Trade execution alone would make up for the commission - but I'm also fine with commission-free alternatives that are now available (at least as fine as I was before). It also offers easier account management for someone with many different account types across multiple owners, has proven useful for free foreign wire transfers among other services and good customer service.

Everyone needs to evaluate their own needs - my hunch is for most on this board, when looked at rationally the commission-free list changes are a very minor impact on that evaluation.
Is trade execution generally an issue with any impact for someone making resting limit orders? My thinking was that it mostly didn't matter when you trade that way. Do you have some evidence or resources showing that this matters?
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by avalpert » Mon Oct 23, 2017 6:15 pm

triceratop wrote:
Mon Oct 23, 2017 5:54 pm
avalpert wrote:
Mon Oct 23, 2017 5:25 pm
And I too have accounts at both - if I had to pick one I would definitely stick with TDA. Trade execution alone would make up for the commission - but I'm also fine with commission-free alternatives that are now available (at least as fine as I was before). It also offers easier account management for someone with many different account types across multiple owners, has proven useful for free foreign wire transfers among other services and good customer service.

Everyone needs to evaluate their own needs - my hunch is for most on this board, when looked at rationally the commission-free list changes are a very minor impact on that evaluation.
Is trade execution generally an issue with any impact for someone making resting limit orders? My thinking was that it mostly didn't matter when you trade that way. Do you have some evidence or resources showing that this matters?
I haven't done any systematic test of non-marketable limit orders so I can't say anything authoritatively. I have seen market orders executed at the same time and Merrill Edge gets it executed at the bottom of the spread while TDA executes in the middle or higher (bottom/top relative to the action) - and I have seen that outcome consistently. To me it indicates that they may be passing payment for order flow back to me.

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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by indexfundfan » Mon Oct 23, 2017 6:35 pm

avalpert wrote:
Mon Oct 23, 2017 6:15 pm
I haven't done any systematic test of non-marketable limit orders so I can't say anything authoritatively. I have seen market orders executed at the same time and Merrill Edge gets it executed at the bottom of the spread while TDA executes in the middle or higher (bottom/top relative to the action) - and I have seen that outcome consistently. To me it indicates that they may be passing payment for order flow back to me.
I don't know about "consistently". I have used market orders with Merrill Edge. If the ETF is very liquid and has huge trading volume, I do sometimes get an executed price that is between the bid and ask prices.
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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by dalmatiandan » Mon Oct 23, 2017 8:57 pm

Saving$ wrote:
Sat Oct 21, 2017 11:08 am
</s>
I've read this entire thread, and others, as well as the wiki (<URL url="https://www.bogleheads.org/wiki/Three-f ... <LINK_TEXT text="https://www.bogleheads.org/wiki/Three-f ... head-style">https://www.bogleheads.org/wiki/Three-f ... TEXT></URL> ) and am still confused. Can someone please confirm or correct the following:<br/>
<br/>
If you have or will have a tax advantaged account at TDA (such as an HSA, Roth, IRA, etc), your current best (lowest cost, most similar) approximation for a the three fund portfolio is:<br/>
For total stock market = SPTM (from SPDR family of ETF's) - with ER of 0.1%<br/>
For international = IAGG (From iShares family of ETF's) - with ER of 0.09% or SPDW with ER of 0.05% + SPEM with ER unavailable (both from SPDR family)<br/>
For total bond = SPAB (from SPDR family of ETF's) - with ER of 0.04%<br/>
<br/>
Further, the above information supersedes what is currently listed in the wiki, which would also lead you to the SPDR family of ETF's, but to:<br/>
For total stock market = THRK - with ER of 0.1%<br/>
For international = CWI - with ER of 0.3%<br/>
For total bond = BNDS - with ER of 0.08%<br/>
<br/>
If the above is not accurate, please advise. If the above is accurate, <br/>
1. is it correct that TDA is offering both the SPTM and iShares ETF's as commission free? <br/>
2. What is the proper percentage of SPDW + SPEM to get the international component of a 3 fund?<br/>
3. Do ETF's give dividends? If so, how does dividend reinvestment work with an ETF at TDA in a tax advantaged account?<br/>
<br/>
Thanks!
<e>
I just ran a Morningstar X-Ray comparing VXUS (Vanguard International ETF) and a couple mixes of SPDW & SPEM (State Street ex-US developed & emerging).

The sweet spot seems to be around an 80/20 split for SPDW & SPEM.

VXUS: -- -- -- -- -- -- -- -- -- -- -- -- 80/20 SPDW/SPEM
North America: 7.58% -- -- -- -- -- 6.12%
Latin America: 3.09% -- -- -- -- -- 3.13%
United Kingdom: 12.35% -- -- -- -- 11.66%
Europe Developed: 31.50% -- -- -- 30.59%
Europe Emerging: 1.41% -- -- -- -- 1.46%
Africa/Middle East: 2.15% -- -- -- -- 2.05%
Japan: 17.15% -- -- -- -- -- -- -- -- 18.51%
Australasia: 4.74% -- -- -- -- -- -- -- 4.88%
Asia Developed: 9.43% -- -- -- -- -- 10.09%
Asia Emerging: 10.61% -- -- -- -- -- 11.49%

I'm far from an expert, but that looks good enough for me for trying to replicate VXUS using the new SPDR commission free ETF's.

Dan

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Re: Fellow TDA bogleheads [TDA dropping Vanguard ETFs from commission-free list]

Post by nps » Tue Oct 24, 2017 8:01 am

Looks like TDA is getting lots of feedback. Complaints from institutional investors have caused them to delay commission-free fund removal for those clients by an additional 60 days:

http://www.investmentnews.com/article/2 ... pular-etfs

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