Which brokerage has the lowest ER on SP500 index fund?

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misterno
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Which brokerage has the lowest ER on SP500 index fund?

Post by misterno » Mon May 07, 2018 9:01 am

I opened all my IRA funds in Vanguard and I am very happy about it

The other day I was looking for a brokerage to open solo401k and I realized Schwab has SP 500 index fund with 0.03% ER. Vanguard's SP500 index fund is 0.04%

Don't get me wrong, I am very happy with Vanguard overall, but if there is something better out there why not?

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Re: Which brokerage has the lowest ER on SP500 index fund?

Post by livesoft » Mon May 07, 2018 9:05 am

Once the expense ratio is in a sub-0.05% range, then other factors are more important, aren't they?

Would you rather have a 0.03% e.r. and 9.97% average annual performance over the next 10 years or 0.05% e.r. and a 10.0% average annual performance over the next 10 years?
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Re: Which brokerage has the lowest ER on SP500 index fund?

Post by greg24 » Mon May 07, 2018 9:13 am

I agree that once you are down to a basis point or two, other factors are more meaningful. Tracking error, customer support, web site, etc.

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Re: Which brokerage has the lowest ER on SP500 index fund?

Post by David Jay » Mon May 07, 2018 9:16 am

My recommendation is to choose the brokerage that you prefer to work with (customer service, browser interface, etc.). I strongly recommend that you do not choose a brokerage based solely on a difference of one one hundredth of one percent on a specific fund for two reasons:

1. The difference is really small when you get down into the second digit after the decimal. Your savings from .04 to .03 will be $10 per year for every $100,000 invested.

2. ERs change over time. In just 3 years I have seen the ERs come down on two (out of my six) Vanguard funds. So the brokerage firm that has the lowest ER right now may not have the lowest in the future.
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Re: Which brokerage has the lowest ER on SP500 index fund?

Post by jhfenton » Mon May 07, 2018 9:17 am

As livesoft said, I would look at other factors. If I were dealing with a Solo 401(k), a brokerage's Solo 401(k) terms and conditions would likely be my primary consideration. They are likely to vary more than ordinary IRA or Roth IRA terms and conditions.

My secondary consideration would be the breadth of available low-cost investment options.

At some point, way down the list, I might consider the S&P 500 (or total market) index funds available. S&P 500 index funds are near commodities at this point. Everyone worth considering is going to have one at 5 bp or less, and an official difference in expense ratio of 1 or 2 basis points can easily be made up or lost with good or bad fund management and higher or lower share lending revenue.

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Re: Which brokerage has the lowest ER on SP500 index fund?

Post by anil686 » Mon May 07, 2018 9:18 am

You should read the annual report from both funds. I think you would find it interesting because it is not exactly the listed expense ratio that’s most important but rather how closely the index fund tracks it’s target index. The Vanguard 500 index fund averages about 0.03 % behind the SP 500 Probably due to securities lending and other income. The Schwab product average is being behind the target index about 0.05% per year. While true the expense ratio shows a slight advantage for Schwab, when we are talking about expense ratios that are so close other issues such as securities lending and experience matching the target index matters more than that. The VG 500 index has, over the past 10 years, finished 0.01% behind the index after expenses - versus Schwab 0.10% behind over the same time period - just FYI and hope it helps....

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Re: Which brokerage has the lowest ER on SP500 index fund?

Post by retiredjg » Mon May 07, 2018 9:22 am

If you have $100k to invest in 500 index, the difference between .03% and .04% is $10 a year. That does not qualify as better enough in my book to base a decision on.

Both are fine funds. Vanguard has lots of other Vanguard mutual funds a person might be interested in. Schwab has a couple of Schwab funds worth considering. To me, that would be a more important contributing factor in picking a brokerage.

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Re: Which brokerage has the lowest ER on SP500 index fund?

Post by SelfEmployed123 » Mon May 07, 2018 9:23 am

I've been looking into setting up a solo 401k as well. I found this review very helpful: https://thecollegeinvestor.com/18174/co ... k-options/

There are also many threads in this forum regarding all of the different brokerage options. I encourage you to think beyond the ER for the funds you will buy. Regarding ERs, you should definitely keep in mind that the Vanguard solo 401k does not allow the purchase of admiral shares...investor shares are all that are available. Fidelity has a good selection of low cost index funds in their solo 401k with the option to get the rock bottom ERs. Others have advocated for Charles Schwab as well. TD Ameritrade and E*Trade are solid choices too. Definitely think about which brokerage you want to be dealing with in addition to ERs and what features you want to make sure are available in your solo 401k (e.g., roth versus non-roth).

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Re: Which brokerage has the lowest ER on SP500 index fund?

Post by nisiprius » Mon May 07, 2018 9:31 am

I think Schwab's is the lowest for an S&P 500 mutual fund, and Schwab also has... according to their website, a minimum $1 purchase (!) compared to $3,000 to for VFINX (0.14% ER), and $10,000 for VFIAX (to get the 0.04% ER). That could make a difference to a starting investor, although I have not checked out the rest of their fee structure for small accounts.

With regard to "if there is something better out there," I would say this. Even on the face of it, I don't believe it is easy to tell whether or not the Schwab fund is actually going to make you more money than Vanguard's. The difference in expense ratio is just so tiny that it gets lost in the noise.

Since inception of SWPPX, the Schwab S&P 500 Index Fund, an investment of $10,000 would have grown to:
-- $60,159.44 in SWPPX
-- $61,411.09, over $1,000 more, in VFIAX
-- $61,695.47 if you could literally invest in the index itself, with no cost.

I don't remember when Schwab began to compete aggressively on expense ratios, but over the last three years, $10,000 would have grown to:
$13,599.81 in SWPPX
$13,616.54, sixteen bucks more, in VFIAX
$13,628.38 if you could invest in index itself.

Added: I do see, however, if you cut it down to one year, Schwab made you $0.77, seventy-seven cents more, on a $10,000 investment.

Does that mean Vanguard is better, after all? In my opinion, no. In particular, it sure looks to me as if the Schwab fund is "better" if you have less than $10,000 to invest, and can do whatever you need to do to avoid paying any account maintenance fees. It means just that the differences are tiny, and that the 0.01% difference in expense ratio is not big enough overcome other unpredictable things that happen in mutual funds.

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Re: Which brokerage has the lowest ER on SP500 index fund?

Post by arcticpineapplecorp. » Mon May 07, 2018 9:32 am

livesoft wrote:
Mon May 07, 2018 9:05 am
Once the expense ratio is in a sub-0.05% range, then other factors are more important, aren't they?

Would you rather have a 0.03% e.r. and 9.97% average annual performance over the next 10 years or 0.05% e.r. and a 10.0% average annual performance over the next 10 years?
I'm not sure I understand your argument here. Are you saying the two S&P500 index funds with Schwab and Vanguard are not identical? Why would one S&P500 index fund have a 9.97% average annual performance but another have a 10.0% average annual performance (assuming before fees)?

Wouldn't the gross return be identical if the two funds are the same? Then only the net return would be different. If you're saying the fund would return 10.0% gross, then it would in both cases. Then the net return would be 9.97% (if 0.03% e.r.) and 9.95% (if 0.05% e.r.).

Can you elaborate a bit more on the argument you're making?
Last edited by arcticpineapplecorp. on Mon May 07, 2018 9:46 am, edited 1 time in total.
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Re: Which brokerage has the lowest ER on SP500 index fund?

Post by Jags4186 » Mon May 07, 2018 9:42 am

arcticpineapplecorp. wrote:
Mon May 07, 2018 9:32 am
livesoft wrote:
Mon May 07, 2018 9:05 am
Once the expense ratio is in a sub-0.05% range, then other factors are more important, aren't they?

Would you rather have a 0.03% e.r. and 9.97% average annual performance over the next 10 years or 0.05% e.r. and a 10.0% average annual performance over the next 10 years?
I'm not sure I understand your argument here. Are you saying the two S&P500 index funds with Schwab and Vanguard are not identical? Why would one S&P500 index fund have a 9.97% average annual performance but another have a 10.0% average annual performance?

Wouldn't the gross return be identical if the two funds are the same? Then only the net return would be different. If you're saying the fund would return 10.0% gross, then it would in both cases. Then the net return would be 9.97% (if 0.03% e.r.) and 9.95% (if 0.05% e.r.).

Can you elaborate a bit more on the argument you're making?
Index funds track an index. It doesn't mean they *are* the index. If you read some SP500 fund prospectuses, they may only hold 400-450 stocks--because stock # 499 at .01% of the index doesn't really move the needle one way or another. But if stock #499 explodes and goes to #300, maybe it would move the overall return a few basis points.. Funds also participate in securities lending. Vanguard reinvests those earnings into the fund. Other companies may keep the profits. If Vanguard makes an extra 2 or 3 basis points on securities lending, that would give it an edge over the Schwab fund even though it has a slightly higher expense ratio.

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Re: Which brokerage has the lowest ER on SP500 index fund?

Post by misterno » Mon May 07, 2018 9:43 am

livesoft wrote:
Mon May 07, 2018 9:05 am
Once the expense ratio is in a sub-0.05% range, then other factors are more important, aren't they?

Would you rather have a 0.03% e.r. and 9.97% average annual performance over the next 10 years or 0.05% e.r. and a 10.0% average annual performance over the next 10 years?
They are all SP 500 index fund

The returns CAN NOT be different. That is impossible

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Re: Which brokerage has the lowest ER on SP500 index fund?

Post by arcticpineapplecorp. » Mon May 07, 2018 9:48 am

Jags4186 wrote:
Mon May 07, 2018 9:42 am
arcticpineapplecorp. wrote:
Mon May 07, 2018 9:32 am
livesoft wrote:
Mon May 07, 2018 9:05 am
Once the expense ratio is in a sub-0.05% range, then other factors are more important, aren't they?

Would you rather have a 0.03% e.r. and 9.97% average annual performance over the next 10 years or 0.05% e.r. and a 10.0% average annual performance over the next 10 years?
I'm not sure I understand your argument here. Are you saying the two S&P500 index funds with Schwab and Vanguard are not identical? Why would one S&P500 index fund have a 9.97% average annual performance but another have a 10.0% average annual performance?

Wouldn't the gross return be identical if the two funds are the same? Then only the net return would be different. If you're saying the fund would return 10.0% gross, then it would in both cases. Then the net return would be 9.97% (if 0.03% e.r.) and 9.95% (if 0.05% e.r.).

Can you elaborate a bit more on the argument you're making?
Index funds track an index. It doesn't mean they *are* the index. If you read some SP500 fund prospectuses, they may only hold 400-450 stocks--because stock # 499 at .01% of the index doesn't really move the needle one way or another. But if stock #499 explodes and goes to #300, maybe it would move the overall return a few basis points.. Funds also participate in securities lending. Vanguard reinvests those earnings into the fund. Other companies may keep the profits. If Vanguard makes an extra 2 or 3 basis points on securities lending, that would give it an edge over the Schwab fund even though it has a slightly higher expense ratio.
ok. thanks. I was not aware of that (it appears misterno was also not aware based on misterno's post below yours). Livesoft, if that answers it, no need to respond. If you have anything different to add, I'm all ears.

Thanks for clarifying.
Last edited by arcticpineapplecorp. on Mon May 07, 2018 9:49 am, edited 1 time in total.
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Re: Which brokerage has the lowest ER on SP500 index fund?

Post by dbr » Mon May 07, 2018 9:49 am

Just a nuance, but all brokerages have many choices of S&P 500 index funds. Where you buy your funds and what funds you buy are two different things. What will happen is that brokerage services offered by different fund companies will often offer lowest transaction costs for their "own" funds. I own mostly Vanguard funds and have no accounts at Vanguard.

Posters are correct that niggling between 0.03 and 0.04 is pointless. Anyway if you want the cheapest funds you will probably find them in institutional funds supplied to 401k plans, etc. For S&P 500 you might even get down to 0.00%, not that it would matter.

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Re: Which brokerage has the lowest ER on SP500 index fund?

Post by nisiprius » Mon May 07, 2018 9:56 am

arcticpineapplecorp. wrote:
Mon May 07, 2018 9:32 am
...Are you saying the two S&P500 index funds with Schwab and Vanguard are not identical?...
misterno wrote: They are all SP 500 index fund. The returns CAN NOT be different. That is impossible.
Index funds from different providers are not identical, even if they literally track the same index, because they have tracking error. From the Summary Prospectus for Schwab's SWPPX, under "Principal Risks:"
Tracking Error Risk. As an index fund, the fund seeks to track the performance of the index, although it may not be successful in doing so. The divergence between the performance of the fund and the index, positive or negative, is called “tracking error.” Tracking error can be caused by many factors and it may be significant.
Interestingly, I see that Vanguard chooses not to mention tracking error under "principal risks," but says in the summary prospectus "The Fund attempts to replicate the target index;" and in the statutory prospectus "An index fund seeks to hold all, or a representative sample, of the securities that make up its target index. Index funds attempt to mirror the performance of the target index, for better or worse. However, an index fund generally does not perform exactly like its target index."

The biggest differences occur with index funds that are

a) trying to track asset classes that are relatively difficult or expensive to invest in, e.g. micro-cap stocks, and

b) funds that track indexes from different index providers, where the definition of the asset class is a matter of judgement and opinion, e.g. some "emerging markets" indexes and index funds invest in South Korean stocks, while others judge that South Korea is no longer an emerging market and do not invest in it.

In the case of the S&P 500 index, there is only one such index, all the stocks it includes in are large-cap US stocks that easy and cheap to invest in, so one would expect that competent mutual fund companies could track it with very little error... and this is the case. But still.
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Re: Which brokerage has the lowest ER on SP500 index fund?

Post by anil686 » Mon May 07, 2018 9:57 am

misterno wrote:
Mon May 07, 2018 9:43 am
livesoft wrote:
Mon May 07, 2018 9:05 am
Once the expense ratio is in a sub-0.05% range, then other factors are more important, aren't they?

Would you rather have a 0.03% e.r. and 9.97% average annual performance over the next 10 years or 0.05% e.r. and a 10.0% average annual performance over the next 10 years?
They are all SP 500 index fund

The returns CAN NOT be different. That is impossible
Not impossible because ER's are costs for running the funds - not net costs minus securities lending and do not take into account whether the index is full replication or sampling. I would assume full replication for both, but if the cost of VG's 500 index admiral shares has been about 0.05% per year for the past several years - it should trail the index by that amount. The fact that it trails by 0.01% over a 10 year period indicates that they are taking in money by securities lending to offset some of the costs - I may be wrong though. Or they are much more efficient than they thought at following the index.

Schwab's ER is higher than 0.03% for most of the past 10 years - however, they trail the target index by only 0.03% over 10 years. There is more to index funds than just the ER - Bogle highlights this in Chapter 5 on Common Sense on Mutual Funds - index tracking and other sources of income are not always considered by investors because the magnitude of these things are likely small - but when you are hashing out a difference of 0.01% in ER - they can become a factor IMO...

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Re: Which brokerage has the lowest ER on SP500 index fund?

Post by nisiprius » Mon May 07, 2018 10:09 am

Just to be ornery: people trying to sell active funds often counter the "expense ratio" objection by saying "all published returns are net of expenses. Why would you care about the expense ratio if the fund can make you more bread, more moolah, more $$$pondulix, more Benjamin$$$, more :moneybag :moneybag :moneybag :moneybag :moneybag ?"

Bogleheads don't usually accept this argument about actively managed funds, so it doesn't seem consistent to turn it around and say sure, Vanguard funds have higher expense ratios, but why would you care about the expense ratio when, thanks to Vanguard's transactional skill, economies of scale in buying and selling stocks, securities lending, and stuff which we certainly won't call "active management," a Vanguard fund with an 0.04% ER might earn you literally hundreds and hundreds of pennies more despite a higher expense ratio?
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Re: Which brokerage has the lowest ER on SP500 index fund?

Post by ofcmetz » Mon May 07, 2018 10:11 am

I agree with Livesoft. Once you are paying five one hundredths of one percent in fee's or less, the other factors be more important. Customer service, website quality, reputation of firm all are more important at that point to me.
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Re: Which brokerage has the lowest ER on SP500 index fund?

Post by EHEngineer » Mon May 07, 2018 10:50 am

misterno wrote:
Mon May 07, 2018 9:01 am
I opened all my IRA funds in Vanguard and I am very happy about it

The other day I was looking for a brokerage to open solo401k and I realized Schwab has SP 500 index fund with 0.03% ER. Vanguard's SP500 index fund is 0.04%

Don't get me wrong, I am very happy with Vanguard overall, but if there is something better out there why not?
Schwab solo 401k allows incoming 401k transfers. Vanguard does not. This can be helpful if you want to do backdoor roth contributions.
Or, you can ... decline to let me, a stranger on the Internet, egg you on to an exercise in time-wasting, and you could say "I'm probably OK and I don't care about it that much." -Nisiprius

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Re: Which brokerage has the lowest ER on SP500 index fund?

Post by lack_ey » Mon May 07, 2018 11:14 am

nisiprius wrote:
Mon May 07, 2018 9:31 am
I think Schwab's is the lowest for an S&P 500 mutual fund, and Schwab also has... according to their website, a minimum $1 purchase (!) compared to $3,000 to for VFINX (0.14% ER), and $10,000 for VFIAX (to get the 0.04% ER). That could make a difference to a starting investor, although I have not checked out the rest of their fee structure for small accounts.

With regard to "if there is something better out there," I would say this. Even on the face of it, I don't believe it is easy to tell whether or not the Schwab fund is actually going to make you more money than Vanguard's. The difference in expense ratio is just so tiny that it gets lost in the noise.

Since inception of SWPPX, the Schwab S&P 500 Index Fund, an investment of $10,000 would have grown to:
-- $60,159.44 in SWPPX
-- $61,411.09, over $1,000 more, in VFIAX
-- $61,695.47 if you could literally invest in the index itself, with no cost.

I don't remember when Schwab began to compete aggressively on expense ratios, but over the last three years, $10,000 would have grown to:
$13,599.81 in SWPPX
$13,616.54, sixteen bucks more, in VFIAX
$13,628.38 if you could invest in index itself.

Added: I do see, however, if you cut it down to one year, Schwab made you $0.77, seventy-seven cents more, on a $10,000 investment.

Does that mean Vanguard is better, after all? In my opinion, no. In particular, it sure looks to me as if the Schwab fund is "better" if you have less than $10,000 to invest, and can do whatever you need to do to avoid paying any account maintenance fees. It means just that the differences are tiny, and that the 0.01% difference in expense ratio is not big enough overcome other unpredictable things that happen in mutual funds.

Source

https://imgur.com/dxD2xcl.png
nisiprius wrote:
Mon May 07, 2018 10:09 am
Just to be ornery: people trying to sell active funds often counter the "expense ratio" objection by saying "all published returns are net of expenses. Why would you care about the expense ratio if the fund can make you more bread, more moolah, more $$$pondulix, more Benjamin$$$, more :moneybag :moneybag :moneybag :moneybag :moneybag ?"

Bogleheads don't usually accept this argument about actively managed funds, so it doesn't seem consistent to turn it around and say sure, Vanguard funds have higher expense ratios, but why would you care about the expense ratio when, thanks to Vanguard's transactional skill, economies of scale in buying and selling stocks, securities lending, and stuff which we certainly won't call "active management," a Vanguard fund with an 0.04% ER might earn you literally hundreds and hundreds of pennies more despite a higher expense ratio?
btw the Schwab fund's expense ratio was 0.09% rather than 0.03% until 2017, and the Vanguard fund's I think 0.05% before as well, so Vanguard had an explicit cost advantage over the trailing 3 years that no longer exists. That is, I don't even think the slightly superior performance was from the actual management. I think Schwab dropped the ER on the big ETFs before they did so for the mutual funds, but I'd have to double check that.

I also think it's possible that implementation alpha from transactions, securities lending, etc. could be more consistent than other forms of alpha (like from securities selection, actual stockpicking), but I don't have data on that. In other words, I don't think the hypothetical position being attacked for inconsistency is necessarily wrong or inconsistent. It may well be but I wouldn't go so far without evidence.

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Re: Which brokerage has the lowest ER on SP500 index fund?

Post by lazyday » Mon May 07, 2018 11:25 am

nisiprius wrote:
Mon May 07, 2018 10:09 am
people trying to sell active funds ... Why would you care about the expense ratio if the fund can make you more [money] ...

Bogleheads don't usually accept this argument about actively managed funds, so it doesn't seem consistent to turn it around and say sure, Vanguard funds have higher expense ratios, but why would you care about the expense ratio when, thanks to Vanguard's transactional skill, ....
It depends how a fund gets its higher return.

Let's say that the fund with higher ER has higher returns.

If it has higher returns because it aggressively uses futures, securities lending, repurchase agreements, etc, then I might choose the lower return fund with lower expenses, thinking it might have better risk adjusted returns. (Looking at risk broadly)

But if it has higher returns because it is well run, without increased risk, then I might choose the high return fund in spite of the higher ER.

In reality, it might be hard to figure this all out, so I'd probably make my decision based on which company I trust more. Because of my trust in Vanguard and my impression that it tends to be conservative, I suspect the Vanguard fund is probably a bit lower risk overall. And I'm willing to pay a couple basis points for that.

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Re: Which brokerage has the lowest ER on SP500 index fund?

Post by David Jay » Mon May 07, 2018 11:27 am

misterno wrote:
Mon May 07, 2018 9:43 am
They are all SP 500 index fund
The returns CAN NOT be different. That is impossible
Sorry, but there are differences (Nisi pointed out the replication versus sampling issue). The funds are not required to have the same policies with regard to front-running avoidance. They receive different amounts of income from securities lending. They have different economies of scale.

So there are, in fact, minor differences which, to quote Nisiprius' in his typical style, will cause: "hundreds and hundreds of pennies" difference per $10,000 of investment.
Last edited by David Jay on Mon May 07, 2018 11:31 am, edited 1 time in total.
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Re: Which brokerage has the lowest ER on SP500 index fund?

Post by willthrill81 » Mon May 07, 2018 11:29 am

David Jay wrote:
Mon May 07, 2018 9:16 am
1. The difference is really small when you get down into the second digit after the decimal. Your savings from .04 to .03 will be $10 per year for every $100,000 invested.
:thumbsup

IMHO, once the ER gets below something like .20, there's little value in chasing after an even lower ER. It's just too much salt for a nickel. There are undoubtedly better ways to spend one's time and effort.
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Re: Which brokerage has the lowest ER on SP500 index fund?

Post by inbox788 » Mon May 07, 2018 11:39 am

jhfenton wrote:
Mon May 07, 2018 9:17 am
My secondary consideration would be the breadth of available low-cost investment options.
A corollary to this is the absence of high-cost investment options. It is one of the reasons I choose Vanguard over Fidelity. For me, both have sufficient low-cost options, but IMO, there are many more high-cost options at Fidelity that I and more importantly, my survivors would need to avoid.
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Re: Which brokerage has the lowest ER on SP500 index fund?

Post by Clever_Username » Mon May 07, 2018 11:40 am

EHEngineer wrote:
Mon May 07, 2018 10:50 am
misterno wrote:
Mon May 07, 2018 9:01 am
I opened all my IRA funds in Vanguard and I am very happy about it

The other day I was looking for a brokerage to open solo401k and I realized Schwab has SP 500 index fund with 0.03% ER. Vanguard's SP500 index fund is 0.04%

Don't get me wrong, I am very happy with Vanguard overall, but if there is something better out there why not?
Schwab solo 401k allows incoming 401k transfers. Vanguard does not. This can be helpful if you want to do backdoor roth contributions.
Wouldn't that be a function of the 401(k) plan, not the host?

If I knew of a brokerage that allowed me to roll t-IRAs (one is rollover, the other is not) into a workplace plan, I'd be super happy as I could finally start doing backdoor Roths instead of waiting for end of year to discover if I'm within the Roth guidelines (and most of the time, I'm not).
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4strings
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Re: Which brokerage has the lowest ER on SP500 index fund?

Post by 4strings » Mon May 07, 2018 11:41 am

Fidelity's S&P 500 Index Fund (FXAIX) is .015%...that is the cheapest I have seen.

bloom2708
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Re: Which brokerage has the lowest ER on SP500 index fund?

Post by bloom2708 » Mon May 07, 2018 11:46 am

You can find a FEW index funds lower outside of Vanguard.

I trust Vanguard to have overall, lower expense ratios. It is what they do. Can you find exceptions? Sure.

Schwab and Fidelity run a different business model. In a vacuum, they want you to buy their more expensive funds.
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misterno
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Re: Which brokerage has the lowest ER on SP500 index fund?

Post by misterno » Mon May 07, 2018 12:12 pm

Clever_Username wrote:
Mon May 07, 2018 11:40 am
EHEngineer wrote:
Mon May 07, 2018 10:50 am
misterno wrote:
Mon May 07, 2018 9:01 am
I opened all my IRA funds in Vanguard and I am very happy about it

The other day I was looking for a brokerage to open solo401k and I realized Schwab has SP 500 index fund with 0.03% ER. Vanguard's SP500 index fund is 0.04%

Don't get me wrong, I am very happy with Vanguard overall, but if there is something better out there why not?
Schwab solo 401k allows incoming 401k transfers. Vanguard does not. This can be helpful if you want to do backdoor roth contributions.
Wouldn't that be a function of the 401(k) plan, not the host?

If I knew of a brokerage that allowed me to roll t-IRAs (one is rollover, the other is not) into a workplace plan, I'd be super happy as I could finally start doing backdoor Roths instead of waiting for end of year to discover if I'm within the Roth guidelines (and most of the time, I'm not).
I am confused here

Allowing incoming 401k transfer stems from the brokerage company or it stems from the solo401k details to you set forth when you establish it?

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Earl Lemongrab
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Re: Which brokerage has the lowest ER on SP500 index fund?

Post by Earl Lemongrab » Mon May 07, 2018 12:36 pm

misterno wrote:
Mon May 07, 2018 12:12 pm
Allowing incoming 401k transfer stems from the brokerage company or it stems from the solo401k details to you set forth when you establish it?
For i401(k)s, the brokerages have a pre-defined plan set up that anyone can use. To do something different, you normally need a third-party administrator and a new plan statement. This will cost money.

The default plan from Vanguard does not allow incoming rollovers. It does not allow Admiral or ETF shares.
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whodidntante
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Re: Which brokerage has the lowest ER on SP500 index fund?

Post by whodidntante » Mon May 07, 2018 12:41 pm

S&P 500 index funds are a low valued commodity these days, with low-cost options available at every discount broker. There is no need to buy Vanguard's fund or to have an account there. I select based on who will pay me a bonus to bring my money there, then buy low cost options once I'm there.

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