For ETFs: Fidelity or Vanguard or others

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get_g0ing
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For ETFs: Fidelity or Vanguard or others

Post by get_g0ing »

Is there a consensus on the BH forum on which firm is best to buy ETFs from?
For example, country ETFs like UAE or PAK, not Vanguard ETFs.

I see many options: Fidelity, Vanguard, Schwab, Scottrade, Td Ameritrade

Schwab, Fidelity commission is $4.95
Scottrade, Td Ameritrade commission is $6.95.

(This is not for retirement investing. I don't know if that makes a difference).
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triceratop
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Re: For ETFs: Fidelity or Vanguard or others

Post by triceratop »

It would be best to not pay commissions at all, which is possible even on those exotic products.

I use Merrill Edge and get 30 free stock/ETF trades per month. That is if you have at least $50k in assets. If you have more than $100k assets then you have 100 free trades per month.
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Re: For ETFs: Fidelity or Vanguard or others

Post by lack_ey »

I guess what could matter more if you're a more frequent trader may be trade execution more than commissions.

If you're trading a lot in relatively large quantities, maybe Interactive Brokers? With $100k assets or more the monthly service charge of max($10 - brokerage commissions that month, 0) is waived. Commissions are $0.005 per share, minimum $1 per order. They have more professional-oriented trading tools, more power.

If you have over $50k but are trading relatively small quantities, maybe Merrill Edge. Over $50k you qualify for Platinum Preferred Rewards and get 30 commission-free trades a month (normal is $6.95). Over $100k that's 100 free trades a month.

I don't have good stats or insight about relative trade execution between different brokers, though. Most here including myself are not frequent traders and not typically buying much of the more niche ETFs with non-trivial spreads.
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get_g0ing
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Re: For ETFs: Fidelity or Vanguard or others

Post by get_g0ing »

triceratop wrote: Tue Dec 12, 2017 10:24 pm It would be best to not pay commissions at all, which is possible even on those exotic products.

I use Merrill Edge and get 30 free stock/ETF trades per month. That is if you have at least $50k in assets. If you have more than $100k assets then you have 100 free trades per month.
I'm not looking for active trading of these ETFs. Maybe just buy once in a while and hold.

I have a Vanguard account with VTSAX and VTIAX. Can I move to Merrill Edge? I'm assuming it's better to hold Vanguard funds inside Vanguard. Is that correct?

Secondly, let's say after a few months, I decide that buying these individual ETFs is not worth it, should I still keep the existing funds/ETFs in ME, or move back to Vanguard?
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Re: For ETFs: Fidelity or Vanguard or others

Post by Jack FFR1846 »

I think you'd want to first decide which ETFs you want to buy and then choose a provider who will allow you to buy and hold these for free. I do understand that there are those who will accept nothing but VTI. If that's the case, then either Vanguard or Merrill Edge are probably the places to consider. If you're simply looking for a broad US stock ETF, then you can go with another and choose based on zero fees, provider service and tools. For example, Schwab's SCHB is similar to VTI and comes along with potential bonus money for opening an account plus Schwab's web, phone and chat service. I forget what the new TDAmeritrade ETF is....maybe SPTM? But same comments as Schwab.
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Earl Lemongrab
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Re: For ETFs: Fidelity or Vanguard or others

Post by Earl Lemongrab »

get_g0ing wrote: Wed Dec 13, 2017 4:17 am I have a Vanguard account with VTSAX and VTIAX. Can I move to Merrill Edge? I'm assuming it's better to hold Vanguard funds inside Vanguard. Is that correct?

Secondly, let's say after a few months, I decide that buying these individual ETFs is not worth it, should I still keep the existing funds/ETFs in ME, or move back to Vanguard?
If you're going to be using ETFs, you might as well convert those funds to ETFs. If they're in taxable, you can do a no-cost, no-tax conversion at Vanguard. If in IRA, that doesn't matter much but you still should do it before moving. You can hold most ETFs at any brokerage, but for obscure ones you should verify.
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Re: For ETFs: Fidelity or Vanguard or others

Post by lack_ey »

Jack FFR1846 wrote: Wed Dec 13, 2017 6:23 am I think you'd want to first decide which ETFs you want to buy and then choose a provider who will allow you to buy and hold these for free. I do understand that there are those who will accept nothing but VTI. If that's the case, then either Vanguard or Merrill Edge are probably the places to consider. If you're simply looking for a broad US stock ETF, then you can go with another and choose based on zero fees, provider service and tools. For example, Schwab's SCHB is similar to VTI and comes along with potential bonus money for opening an account plus Schwab's web, phone and chat service. I forget what the new TDAmeritrade ETF is....maybe SPTM? But same comments as Schwab.
I'm pretty sure you know this, but in case there was any ambiguity for anyone reading, TD Ameritrade does not run funds. SPDR Portfolio Total Stock Market ETF (SPTM) is a US total stock market index product run by State Street under the SPDRs brand that is one of hundreds of ETFs that trade commission free at TD Ameritrade.
get_g0ing wrote: Wed Dec 13, 2017 4:17 am tive trading of these ETFs. Maybe just buy once in a while and hold.

I have a Vanguard account with VTSAX and VTIAX. Can I move to Merrill Edge? I'm assuming it's better to hold Vanguard funds inside Vanguard. Is that correct?

Secondly, let's say after a few months, I decide that buying these individual ETFs is not worth it, should I still keep the existing funds/ETFs in ME, or move back to Vanguard?
In what kind of sense do you mean it's better to hold Vanguard funds inside Vanguard [Brokerage Services]? Are ETFs included in your usage of the word "funds" in that statement? How would it be better? I mean, the underlying return is of course the same no matter where you hold it, and if you're not paying commissions either way, what is a distinguishing difference?

As for the hypothetical for the future, isn't the only real distinguishing factor then the brokerage service, website, support, etc.? I think you would be in a position to answer that yourself then, at least better than we can now.
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Re: For ETFs: Fidelity or Vanguard or others

Post by nisiprius »

Bogleheads often choose to invest in broad funds and ETFs that encompass whole markets, or at least broad asset classes, and, for example, follow Larry Swedroe's rule: ("Rules of Prudent Investing, #17")
In 'The Quest for Alpha,' p. 156, Larry Swedroe wrote:#17: Owning individual stocks and sector funds is more akin to speculating, not investing. The market compensates investors for risks that cannot be diversified away, like the risk of investing in stocks versus bonds. Investors shouldn't expect compensation for diversifiable risk--the unique risks related to owning one stock or sector or country fund. Prudent investors only accept risk for which they will be compensated with higher expected returns.
What brokerage is best for you depends on what you are trying to do. The thing you need to do is to match the brokerage's fee structure with the ETFs and asset classes you want to hold.

If you want "any ETF at all," including single-country ETFs like UAE or PAK, then you want to find out the ins and outs of brokerages that offer "100 free trades a year," etc. I think that's your situation. I think you can cross Vanguard off your list, as I don't think they offer free trades on any ETFs but Vanguard's. A problem is that most of the "200 free trade" deals are promotional and often are only introductory, for new customers.

Fidelity (and doubtless other brokerages, but Fidelity is the one I know about) has about seventy iShares ETFs that are commission-free (for as long as the deal lasts--they recently expanded the lineup but dropped some ETFs from the list). The list of 70 is here and it includes everything I think Boglehead-style investors need, and a lot of fairly narrow stuff--S&P India Nifty 50 Index, MSCI Frontier 100 Index, MSCI Global Silver Miners, MSCI China, S&P Latin America 40. But certainly not a comprehensive list of individual countries.
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get_g0ing
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Re: For ETFs: Fidelity or Vanguard or others

Post by get_g0ing »

lack_ey wrote: Thu Dec 14, 2017 4:36 pm In what kind of sense do you mean it's better to hold Vanguard funds inside Vanguard [Brokerage Services]? Are ETFs included in your usage of the word "funds" in that statement? How would it be better? I mean, the underlying return is of course the same no matter where you hold it, and if you're not paying commissions either way, what is a distinguishing difference?

As for the hypothetical for the future, isn't the only real distinguishing factor then the brokerage service, website, support, etc.? I think you would be in a position to answer that yourself then, at least better than we can now.
In a lower-cost sense. I didn't want to just assume that holding Vanguard fund and ETF within Vanguard would be exactly the same as holding them elsewhere. Maybe the expense ratio would be different, or some other fee, etc. But from what you say, it sounds like there's no difference other than the commission fee.

Can I transfer the funds from Vanguard to Merrill Edge directly, or would I first need to convert them to ETF?
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Re: For ETFs: Fidelity or Vanguard or others

Post by get_g0ing »

Earl Lemongrab wrote: Thu Dec 14, 2017 4:21 pm
get_g0ing wrote: Wed Dec 13, 2017 4:17 am I have a Vanguard account with VTSAX and VTIAX. Can I move to Merrill Edge? I'm assuming it's better to hold Vanguard funds inside Vanguard. Is that correct?

Secondly, let's say after a few months, I decide that buying these individual ETFs is not worth it, should I still keep the existing funds/ETFs in ME, or move back to Vanguard?
If you're going to be using ETFs, you might as well convert those funds to ETFs. If they're in taxable, you can do a no-cost, no-tax conversion at Vanguard. If in IRA, that doesn't matter much but you still should do it before moving. You can hold most ETFs at any brokerage, but for obscure ones you should verify.
Can I transfer the funds from Vanguard to Merrill Edge directly? If so, maybe I can transfer the funds to ME, and then buy the individual ETFs like UAE, PAK inside ME. Or would I first have to convert Vanguard funds to ETF before transferring?

Excuse my ignorance, I'm sorry.
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triceratop
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Re: For ETFs: Fidelity or Vanguard or others

Post by triceratop »

get_g0ing wrote: Fri Dec 15, 2017 1:01 am
Earl Lemongrab wrote: Thu Dec 14, 2017 4:21 pm
get_g0ing wrote: Wed Dec 13, 2017 4:17 am I have a Vanguard account with VTSAX and VTIAX. Can I move to Merrill Edge? I'm assuming it's better to hold Vanguard funds inside Vanguard. Is that correct?

Secondly, let's say after a few months, I decide that buying these individual ETFs is not worth it, should I still keep the existing funds/ETFs in ME, or move back to Vanguard?
If you're going to be using ETFs, you might as well convert those funds to ETFs. If they're in taxable, you can do a no-cost, no-tax conversion at Vanguard. If in IRA, that doesn't matter much but you still should do it before moving. You can hold most ETFs at any brokerage, but for obscure ones you should verify.
Can I transfer the funds from Vanguard to Merrill Edge directly? If so, maybe I can transfer the funds to ME, and then buy the individual ETFs like UAE, PAK inside ME. Or would I first have to convert Vanguard funds to ETF before transferring?

Excuse my ignorance, I'm sorry.
You cannot convert Admiral shares mutual funds to ETFs at Merrill Edge. However, if you transfer the Admiral shares in-kind they will count towards your assets as needed to qualify you for free trades.

(Are you sure you want to invest in country ETFs? I guess if it's with play money, but..)
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Re: For ETFs: Fidelity or Vanguard or others

Post by Gr819406 »

My wife just changed jobs and we rolled her 401k to Fidelity. It qualified for 500 free trades over 2 years. I will not even make 20 trades over 2 years, but she was already with Fidelity which is why we chose it. We did not have to be a "new customer". We just had to bring in new money. Think its 300 free trades over 2 years for 50K and 500 free trades for 100K.

We also have money with Vanguard. The site works for what we use it for. Fidelity is prettier and has more options, but if you plan on buying and holding ETFs they are somewhat identical.

Also if you plan on buying bogglehead type etf's then you are fine with what vanguard offers in the sense of you do not have to pay a commission. Fidelity does have more free ETF options, a bit more country type free etfs, and apparently they fetch better prices on buys/sells if a few dollars matter in the grand scheme of things.

Personally I like Fidelity due to all the features it has, so I can play around with them. I never end up doing anything, but I enjoy setting scans up and checking them every so often.
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Re: For ETFs: Fidelity or Vanguard or others

Post by Ditchwitch »

Gr819406 wrote: Fri Dec 15, 2017 7:48 am My wife just changed jobs and we rolled her 401k to Fidelity. It qualified for 500 free trades over 2 years. I will not even make 20 trades over 2 years, but she was already with Fidelity which is why we chose it. We did not have to be a "new customer". We just had to bring in new money. Think its 300 free trades over 2 years for 50K and 500 free trades for 100K.

We also have money with Vanguard. The site works for what we use it for. Fidelity is prettier and has more options, but if you plan on buying and holding ETFs they are somewhat identical.

Also if you plan on buying bogglehead type etf's then you are fine with what vanguard offers in the sense of you do not have to pay a commission. Fidelity does have more free ETF options, a bit more country type free etfs, and apparently they fetch better prices on buys/sells if a few dollars matter in the grand scheme of things.

Personally I like Fidelity due to all the features it has, so I can play around with them. I never end up doing anything, but I enjoy setting scans up and checking them every so often.
"Personally I like Fidelity due to all the features it has, so I can play around with them. I never end up doing anything, but I enjoy setting scans up and checking them every so often."

Same here...Fidelity's platform is a setup to encourage trading more so than Vanguard...but it doesn't mean you have to do it. I chose Fidelity's platform for the same reason. If for some reason I chose to trade more frequently in the future.
I have mostly FIdelity's commission free iShares but also purchased VTI. Vanguard's ETF's are great and I don't see the $4.95 at Fidelity as a hold up unless you trade frequently. As a buy and hold investor I look at what an ETF has to offer and differentiates it from others and then at purchase costs. Now most of the stuff I will likely buy are plain vanilla ETFs.
Fidelity's customer service is very good. I have had brokerage, Roth and 3 401K accounts over 15 years with them.
I am considering setting up retirement savings accounts for my 18+ kids to help them get started and may do that with Vanguard since simple is sometimes a better way to go especially when you are young. Depends a bit on their account minimums etc where I need to do some more research.
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Gr819406
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Re: For ETFs: Fidelity or Vanguard or others

Post by Gr819406 »

Ditchwitch wrote: Fri Dec 15, 2017 9:04 am Same here...Fidelity's platform is a setup to encourage trading more so than Vanguard...but it doesn't mean you have to do it. I chose Fidelity's platform for the same reason. If for some reason I chose to trade more frequently in the future.
I have mostly FIdelity's commission free iShares but also purchased VTI. Vanguard's ETF's are great and I don't see the $4.95 at Fidelity as a hold up unless you trade frequently. As a buy and hold investor I look at what an ETF has to offer and differentiates it from others and then at purchase costs. Now most of the stuff I will likely buy are plain vanilla ETFs.
Fidelity's customer service is very good. I have had brokerage, Roth and 3 401K accounts over 15 years with them.
I am considering setting up retirement savings accounts for my 18+ kids to help them get started and may do that with Vanguard since simple is sometimes a better way to go especially when you are young. Depends a bit on their account minimums etc where I need to do some more research.
I have not had any issues with eithers customer service. I have many years till my kids earn income(2 under 3) but my plan would be whatever they earn put into a ROTH and just give them the money they earn out of our income.
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Re: For ETFs: Fidelity or Vanguard or others

Post by Earl Lemongrab »

get_g0ing wrote: Fri Dec 15, 2017 12:55 am In a lower-cost sense. I didn't want to just assume that holding Vanguard fund and ETF within Vanguard would be exactly the same as holding them elsewhere. Maybe the expense ratio would be different, or some other fee, etc. But from what you say, it sounds like there's no difference other than the commission fee.

Can I transfer the funds from Vanguard to Merrill Edge directly, or would I first need to convert them to ETF?
ETFs are a commodity. Any brokerage can trade them and they're the same. Each might have a commission for the transaction.

With mutual funds, Admiral index funds usually are not available for purchase outside of Vanguard. I have not done it, but my understanding is that you can transfer them to Merrill Edge and reinvest dividends. You can't buy new shares, and selling any there would not be covered by the free trades from Preferred Rewards and probably have a commission. Some custodians have no fee for selling funds but I don't think Edge is one.

As I said, if I were moving to Edge, I'd convert the Admiral shares to ETF before going. That might not be what would work best for you.
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