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Amerivest???
Old 03-15-2006, 05:34 AM   #1
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Amerivest???

I have one more question for the group. I have been looking at Amerivest for my taxable funds. ETFs are more tax efficient than Index funds and Ameirivest charges 0.35% on 100k but there is no trading fees and they will do the rebalancing. Although they offer suggested portfolios you can customize them to your liking. They are weak in the bond offerings however.

I haven't seen any mention of this on the board - thoughts - comments - brickbats - (dryer sheets?)
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Re: Amerivest???
Old 03-15-2006, 06:53 AM   #2
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Re: Amerivest???

It's an interesting concept, but if you can read through the Amerivest web site and understand enough to make an informed decision about Amerivest, then I think you can save yourself the 0.35% extra fee by doing-it-yourself.

Trading fees are cheap nowadays. For example, with $100K you can get $2.95 trades at WellsFargo. The $350 paid to Amerivest on a $100K account would be 10 times the necessary amount paid in commissions at WellsFargo. Think of the future as well. If you had $250K at WellsFargo, your trades would be free, but Amerivest would be charging you more.

And I disagree with your statement that ETFs are more tax efficient than Index funds. Where did that come from? I think they are about the same. Some ETFs have higher expense ratios than the corresponding index fund, some have lower; some may be more tax efficient, some may be worse.

Now if Amerivest charged a flat fee per year of about $50, then it might be worth it.
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Re: Amerivest???
Old 03-15-2006, 08:37 AM   #3
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Re: Amerivest???

Quote:
Originally Posted by LOL!


And I disagree with your statement that ETFs are more tax efficient than Index funds. Where did that come from?
And I disagree with your statement. ETF's are more tax efficient than Index funds. ETF's (in most cases) do not distribute capital gains like mutual funds do. You will of course make up the difference when you sell your ETF, but for long term investors the difference can be material.

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Re: Amerivest???
Old 03-15-2006, 07:53 PM   #4
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Re: Amerivest???

Quote:
Originally Posted by LOL!
And I disagree with your statement that ETFs are more tax efficient than Index funds.*
I suspect it came from comparing turnover rates & distributions.*

Do your own due diligence, of course, but in general ETFs beat the snot out of mutual-fund turnover & taxable distributions.* Lower ERs are a happy bonus.

Vanguard & Fidelity Spartans are two of the very few exceptions.
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