Schwab Sinks Fees

[OldShooter]

Maybe. ...

True enough, technology is making all of this stuff cheaper. I am coming from the human nature side, though, having observed many times where competitive juices cause people to stay in the fight too long, eventually hurting themselves rather than or in addition to hurting their competitors. We'll see ...

 

[mathjak107]

I'm not taking a position but have some thoughts:

First, for "small" indexes like the S&P 500 all the funds are basically making the same trades so in the end shouldn't their tax efficiency be about the same?

Second, for large indexes like the ACWI All Cap, all funds are sampling as they cannot possible hold every issue. So there maybe it is worth more concern?

Finally, these tax numbers will vary with what's going on in the market, so are today's numbers a reliable predictor of tomorrows?

keep in mind one of the only true s&p index funds is spy . it is structured as a uit and basically sits as is unless the index changes stocks . in fact all dividends that come in daily are held as cash and not reinvested in the index.

on the other hand :

Vanguard’s VOO is similar to IVV and other s&p 500 funds , in that it’s not limited in how it invests or holds it shares.

As per the prospectus, VOO is allowed to invest in derivatives to stay fully invested or to deviate from normal investment strategies when needed such as for liquidity or valuation reasons. It also invests its daily cash in Vanguard money market funds.

ivv as an example invests the cash in to the index then sells when it pays out . it also can loan securities out . spy pays fund expenses from the cash held , other funds may not since dividends are put back in the index and fund expenses are paid through sales of holdings .

so not all index funds are equal

 

[ducky911]

SCHB Schwab U.S. Broad Market ETF is .03%

 

[OldShooter]

keep in mind one of the only true s&p index funds is spy . it is structured as a uit and basically sits as is unless the index changes stocks . in fact all dividends that come in daily are held as cash and not reinvested in the index.

on the other hand :

Vanguard’s VOO is similar to IVV and other s&p 500 funds , in that it’s not limited in how it invests or holds it shares.

As per the prospectus, VOO is allowed to invest in derivatives to stay fully invested or to deviate from normal investment strategies when needed such as for liquidity or valuation reasons. It also invests its daily cash in Vanguard money market funds.

ivv as an example invests the cash in to the index then sells when it pays out . it also can loan securities out . spy pays fund expenses from the cash held , other funds may not since dividends are put back in the index and fund expenses are paid through sales of holdings .

so not all index funds are equal

Thanks much. I appreciate it. This is a good forum for getting educated. Next time I'm tempted to read a prospectus, I'll first contact you to get briefed on the important bits.