TD Ameritrade is a large online broker that originated from the merger of Ameritrade Holding Corporation and TD Waterhouse USA.
Boglehead-style investing at TD Ameritrade
The building blocks of Boglehead-style investing are low-expense-ratio index mutual funds and/or ETFs. Vanguard 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 TD Ameritrade.
The information below is up-to-date as of October 17, 2017. On this date, TD Ameritrade is revamping the fee-free ETF lineup. The new lineup includes ETFs from the Blackrock iShares and SSGA families, but Vanguard ETFs have been removed.
Tools for Boglehead-style investing
- TD Ameritrade has over 200 commission-free ETFs for buy-and-hold investors, including dozens of choices from iShares and SPDRs. Users must sign up their account for the Commission-Free ETF program. In order to avoid the $19.99 short-term ETF trading fee, no shares may be sold for at least 30 days once a customer purchases a commission-free ETF. Please see ETFs vs Mutual Funds for details on ETF pros and cons.
|Vanguard Fund||Similar TD Ameritrade ETF||Notes|
|Vanguard Total Stock Market Index Fund (VTSMX; 0.15%)||SPDR Portfolio Total Stock Market ETF
(formerly THRK) (SPTM; 0.03%)
|Vanguard Large Cap Index Fund (VLACX; 0.18%)||SPDR Portfolio Large Cap ETF
(formerly ONEK) (SPLG; 0.03%)
|Vanguard Mid Cap Index Fund (VIMSX; 0.18%)||SPDR Portfolio Mid Cap ETF
(formerly SMD) (SPMD; 0.05%)
|Vanguard Small Cap Index Fund (NAESX; 0.18%)||SPDR Portfolio Small Cap ETF
(formerly TWOK) (SPSM; 0.05%)
|Vanguard REIT Index Fund (VGSIX 0.26%)||iShares Core US REIT ETF (USRT; 0.08%)|
|Vanguard Total International Stock Index Fund (VGTSX; 0.18%)||SPDR Portfolio Developed World ex-US ETF (SPDW; 0.04%)
iShares MSCI ACWI ETF (ACWI; 0.31%)
|Vanguard Emerging Markets Index Fund (VEIEX; 0.32%)||SPDR Portfolio Emerging Markets ETF
(formerly GMM) (SPEM; 0.11%)
|Vanguard FTSE All-World ex-US Small-Cap Index Fund (VFSVX; 0.27%)||SPDR S&P International Small Cap ETF (GWX; 0.40%)||GWX does not include emerging market small caps|
|Vanguard Global ex-U.S. Real Estate Index Fund (VGXRX 0.35%)||iShares Global REIT ETF (REET; 0.14%)||REET includes US and Global REITs.|
|Bonds and Fixed Income|
|Vanguard Total Bond Market Index Fund (VBMFX; 0.15%)||SPDR Portfolio Aggregate Bond ETF (formerly BNDS) (SPAB; 0.04%)|
|Vanguard Inflation-Protected Securities Fund (VIPSX; 0.20%)||SPDR Bloomberg Barclays TIPS ETF (IPE; 0.15%)||VIPSX is not an index fund. VIPSX does not have a Vanguard ETF equivalent.|
|Vanguard Prime Money Market Fund (VMMXX; 0.16%)||Federated Prime Cash Obligations Fund (PCOXX; 0.20%)||VMMXX and PCOXX have similar credit quality and similar yields. The minimum has recently been abolished for TD Ameritrade account holders|
- Some investors may wish to tilt their portfolio to increase Value stocks. These investors may consider using the following:
- Corresponding Growth ETFs are also available.
- Some users may have employer-sponsored TD Ameritrade accounts which prohibit using ETFs. The lowest expense ratio NTF (No Transaction Fee) mutual funds at TD Ameritrade for various asset classes are as follows:
- Total US Stock Market Fund: T. Rowe Price Total Equity Market Index Fund (POMIX; 0.40%).
- S&P 500 large-cap US Equities fund: SSgA S&P 500 Index Fund Institutional Class (SVSPX; 0.16%).
- Extended Stock Market mid and small-cap US Equities fund: T. Rowe Price Extended Equity Market Index Fund (PEXMX; 0.42%).
- Small Cap Stock Market Index: Dreyfus Small Cap Stock Index Fund (DISSX; 0.50%).
- Developed International Stock Index: T. Rowe Price International Equity Index Fund (PIEQX; 0.50%). Note: this index excludes Canada, Emerging Markets, and Small Cap equities.
- Total Bond Market Index: T. Rowe Price U.S. Bond Enhanced Index Fund (PBDIX; 0.30%).
- TIPS Fund: American Century Investments Inflation Adjusted Bond Fund Investor Class (ACITX; 0.48%).
You can buy mutual funds from various fund families, ETFs, individual stocks, bonds, and brokered CDs all within the same TD Ameritrade brokerage account.
- TD Ameritrade's online brokerage handbook has all the nitty-gritty details and fees and commissions and how TD Ameritrade does business online.
- TD Ameritrade's full fee schedule is here.
- Maxey, Daisy (16 October 2017). "TD Ameritrade Drops Vanguard From Revamped Commission-Free ETF Lineup". WSJ. https://www.wsj.com/articles/td-ameritrade-drops-vanguard-from-revamped-commission-free-etf-lineup-1508126461. Retrieved 2017-11-05.
- Marotta, David John (19 October 2017). "TD Ameritrade Eliminated Low Cost Commission Free Exchange Traded Funds". Forbes. https://www.forbes.com/sites/davidmarotta/2017/10/19/td-ameritrade-eliminated-low-cost-commission-free-exchange-traded-funds/#4daf87877b63. Retrieved 2017-11-05.
- Bogleheads® forum topic: . 14 October 2017
- While PBDIX has historically tracked the Barclays Capital U.S. Aggregate Bond Index well, please see T. Rowe Price's PBDIX Objective Section for more details.