Merrill Edge

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Merrill Edge is a large online brokerage platform that was founded in 2010, two years after Bank of America acquired Merrill Lynch.[1]

Boglehead-style investing at Merrill Edge

The building blocks of Boglehead-style investing are low-expense-ratio index mutual funds and/or exchange-traded funds (ETFs). Vanguard Group fans would suggest that Vanguard has the best and most complete lineup of such funds, and that the most convenient place to hold Vanguard mutual funds is directly at Vanguard. Thus, the Bogleheads forum and Wiki tends to be Vanguard-oriented. But, investing according to the Boglehead philosophy certainly does not require you to invest at Vanguard nor use Vanguard products. Here are some notes on how to do it at Merrill Edge.

The information below is up-to-date as of January 7, 2016. Writers have striven for accuracy, but investors should verify information before taking action.

Tools for Boglehead-style investing

  • Merrill Edge provides 30 cost-free ETF or equity trades a month to customers who have $50k or more in qualifying Bank of America deposit accounts and/or qualifying Merrill Edge and Merrill Lynch investment accounts.[note 1][2] If you qualify for this, then the easiest approach would be to use low-cost index ETFs from Vanguard, iShares, etc.
  • Assuming you do not qualify for cost-free ETFs, it is up to you to evaluate whether the ETF trading fee is worth the cost (depending on the amount you want to invest, and the duration), vs. the NTF (no transaction fee) mutual funds listed below.
    • In order to avoid the $39.95 short-term mutual fund trading fee, no shares may be sold for at least 90days once a customer purchases a NTF mutual fund.
Vanguard Fund Similar Merrill Edge NTF Mutual Fund Notes
US Stocks
Vanguard Total Stock Market Index Fund (VTSMX; 0.16%) T. Rowe Price Total Equity Market Index Fund (POMIX; 0.30%) VTSMX tracks the CRSP US Total Market Index.
POMIX tracks the S&P Total Market Index.
Vanguard 500 Index Fund (VFINX; 0.16%) T. Rowe Price Equity Index 500 Fund (PREIX; 0.27%)
Vanguard Extended Market Index Fund (VEXMX; 0.22%) T. Rowe Price Extended Equity Market Index (PEXMX; 0.35%) Intended to be mixed with a 500 Index fund to approximate the Total Market.
Vanguard Mid Cap Index Fund (VIMSX; 0.20%) Dreyfus Midcap Index Fund (PESPX; 0.51%) VIMSX tracks the CRSP US Mid Cap Index.
PESPX tracks the S&P MidCap 400 Index.
Vanguard Small Cap Index Fund (NAESX; 0.20%) No analogous NTF mutual fund found
International Stocks
Vanguard Total International Stock Index Fund (VGTSX; 0.22%) No analogous NTF mutual fund found
Vanguard Developed Market Index Fund Investor (VDVIX; 0.20%) T. Rowe Price International Equity Index Fund (PIEQX; 0.45%)
Vanguard Emerging Markets Index Fund (VEIEX; 0.33%) TIAA-CREF Emerging Markets Equity Index Fund (Retail) (TEQKX; 0.61%)
Vanguard Global ex-U.S. Real Estate Index Fund (VGXRX; 0.36%) Northern Global Real Estate Index (NGREX; 0.53%) NGREX contains both domestic and global REITs index. It is analogous to VGXRX plus Vanguard REITs Index Fund (VFSIX)
US Bonds
Vanguard Total Bond Market Index Fund (VBMFX; 0.16%) T. Rowe Price US Bond Enhanced Index Fund (PBDIX; 0.3%)
TIAA-CREF Bond Index Fund (Retail) (TBILX; 0.47%)
PBDIX has a lower expense, but is not an index fund. It may take on excess risk to attempt to exceed the index performance.
Vanguard Inflation-Protected Securities Fund (VIPSX; 0.20%) American Century Inflation-Adjusted Bond Fund (ACITX; 0.47%) Neither fund is an index fund
Vanguard Short Term Bond Index Fund (VBISX; 0.26%) T. Rowe Price Short-Term Bond Fund (PRWBX; 0.4%) PRWBX is not an index fund
Vanguard Intermediate Term Treasury Fund (VFITX; 0.20%) T. Rowe Price US Treasury Intermediate Fund (PRTIX; 0.51%) Neither VFITX nor PRTIX are index funds, but behave relatively similarly
Vanguard Long-Term Treasury Fund (VUSTX; 0.20%) Dreyfus US Treasury Long Term Fund (DRGBX; 0.66%) Neither VUTSX nor DRGTX are index funds, but behave relatively similarly, other than fee differences

Notes:

  • Vanguard expense ratios are available at the fund's website under "(Fees & Minimums)". Use the provided link for the latest information.
  • Not all bond style & duration permutations have a NTF fund available at Merrill Edge.

Notes:

  1. Merrill Edge also provides 100 cost-free ETF trades per month to customers who have $100k in qualifying Bank of America deposit accounts and/or qualifying Merrill Edge and Merrill Lynch investment accounts.

Merrill Edge tips, links, and general orientation

Whereas the default account at Vanguard is a mutual fund account, in which you can only buy Vanguard mutual funds (all other products require a separate Vanguard Brokerage Service account), the default account at Merrill EdgE is a brokerage account. You can buy mutual funds from various fund families, ETFs, individual stocks, bonds, and brokered certificate of deposits (CDs) all within the same Merrill Edge. As of March 2012:

  • Merrill Edge's full fee schedule is here.

See also

References

  1. About Merrill Edge, noted in the "highlights" timeline. Retrieved 7 January 2017
  2. Merrill Edge Pricing, viewed October 15, 2017.

External links