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Re: So much for ER in 2010... (longish)
Old 09-02-2006, 04:23 PM   #41
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Re: So much for ER in 2010... (longish)

Quote:
Originally Posted by peggy
I'll let you know what the broker says.* Should be amusing.
What'd he say?* *
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Re: So much for ER in 2010... (longish)
Old 09-03-2006, 03:49 PM   #42
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Re: So much for ER in 2010... (longish)

Quote:
Originally Posted by segfault
What'd he say?* *
OOPS! Found out Friday that our dog has to have surgery, and completely forgot about this thread! But, here we go:

The funds with the fees in excess of 2% are "B shares" -- which are no longer offered because some brokerages abused them. After we've held them five years, they change into "A shares" and the fee drops by 1%, which will take them down into the 1.3% range. Still high, but not insanely so.

But rather than pay the 5% back end load on the B shares, DH and I decided to leave them where they are until they mature (two more years, about), and then transfer them to Vanguard. (The A shares won't have a back end load.)

We've been discussing whether to transfer the non-B share investments to Vanguard and just leaving the B shares where they are until they mature. Looking at the big picture, including my paranoia -- do we really want to tip off our broker that we'll be closing our account in two years? -- do y'all have any suggestions or thoughts on this?

On the upside, after the meeting with the broker (and before the vet appointment at which we found out about the surgery), DH asked to see my spreadsheets and projections for the future. It's the first time he's taken such an active interest in the planning, and I'm glad for that.

Thanks, everyone, for suggestions and comments and support.
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Re: So much for ER in 2010... (longish)
Old 09-03-2006, 10:09 PM   #43
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Re: So much for ER in 2010... (longish)

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Originally Posted by FinanceDude


NO ONE really KNOWS what the trading costs are, because mutual fund companies ARE NOT required under SEC law to report them. I think WE ALL would be surprised at the true "costs" of mutual funds..............

FinanceDude, commissions are available if you do some digging. A fund's Statement of Additional Information (SAI) shows the commissions a fund (ie. its shareholders) pays in commissions. I'm not sure if it's required by the SEC, but I think it is and most fund's SAIs are available at the fund family's website.

I recently did an analysis of that information for the Vanguard Total Stock Market Index fund and two other random funds to see what I found.

Vanguard Total Stock Market paid brokerage commissions of $6,715,000 during fiscal year ending 12/31/2005 per its SAI. Per the annual report for 2005, TSM had beginning assets of $57,014,134,000 and year-end assets of $65,419,573,000 giving an average asset balance of $61,216,854,000. $6,715,000/$61,216,854,000=.00011 or about 1 basis point (.01%). Thus, a $100,000 investment involves commissions of about $11.

Compare w/ AMRMX, American Mutual Fund, for the year ended October 31, 2005, had average net assests of $15,065,976,000 and paid commissions of $5,738,000 for commisions as percentage of net assets of .0381% or 3.8 basis points. VTSMX shareholders pay less than a third of the brokerage commisions.

T. Rowe Price Science & Technology (PRSCX): fiscal year ended 10/31/2005 brokerage commissions totaled $8,350,000. Assets for year ending 12/21/04=$3,905,000,000. Assets for the year ending 12/31/05=$3,220,000,000/ Average assets = $3,562,000,000/$8,350,000 commissions. Commissions paid by the fund equal .23% (23 basis points) percent of average assets.

The information and calculations aren't perfect, but I found them useful. I'd rather pay 1 basis point in commissions than 10 or 20, that's for sure. Another factor in addition to speads and taxes, etc. that impact returns.
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Re: So much for ER in 2010... (longish)
Old 09-04-2006, 12:21 AM   #44
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Re: So much for ER in 2010... (longish)

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Originally Posted by SaveSome
FinanceDude, commissions are available if you do some digging. A fund's Statement of Additional Information (SAI) shows the commissions a fund (ie. its shareholders) pays in commissions.* I'm not sure if it's required by the SEC, but I think it is and most fund's SAIs are available at the fund family's website.
Last week I asked T. Rowe Price for a fund prospectus and the SAI.*

It took 10 seconds for the former, but two supervisors for the latter.* When one of them mentioned that it was 210 pages and perhaps I'd rather read it on their website, they couldn't find it on their website.* (Apparently that bluff has worked before.) It's easier to search through the text on a PDF but it's a real pain to skim the document off a monitor.

Nothing's come in the mail yet, but we've already received one "happiness factor" call inquiring about their customer service...
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Re: So much for ER in 2010... (longish)
Old 09-04-2006, 07:32 AM   #45
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Re: So much for ER in 2010... (longish)

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Originally Posted by Nords
Last week I asked T. Rowe Price for a fund prospectus and the SAI.

It took 10 seconds for the former, but two supervisors for the latter. When one of them mentioned that it was 210 pages and perhaps I'd rather read it on their website, they couldn't find it on their website. (Apparently that bluff has worked before.) It's easier to search through the text on a PDF but it's a real pain to skim the document off a monitor.

Nothing's come in the mail yet, but we've already received one "happiness factor" call inquiring about their customer service...
I just went to the T. Rowe Price website and found the SAI. Look under the "Products and Services" tab and select "Mutual Funds". In the box appearing on the left select "Stmt of Addl Info".
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Re: So much for ER in 2010... (longish)
Old 09-04-2006, 08:11 PM   #46
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Re: So much for ER in 2010... (longish)

Quote:
Originally Posted by peggy
We've been discussing whether to transfer the non-B share investments to Vanguard and just leaving the B shares where they are until they mature. Looking at the big picture, including my paranoia -- do we really want to tip off our broker that we'll be closing our account in two years? -- do y'all have any suggestions or thoughts on this?
Hope your dog is okay.

I would go ahead and transfer everything that I could to Vanguard or another low-cost provider. If your broker catches on, the worst he can do is try to churn what's left of your account to get as much commission as possible out of it, but your brokerage agreement probably says that you still have to approve all trades.
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Re: So much for ER in 2010... (longish)
Old 09-05-2006, 09:20 AM   #47
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Re: So much for ER in 2010... (longish)

Peggy,

I beleive you can immediately transfer all your shares "in kind" to Vanguard without selling them. I know I transferred some B shares to Fidelity recently and there was no forced liquidation or expense to me. Then, once all your shares are with VG, decide what you want to do with them. There isn't any reason to wait for the B's to convert to A's. Go ahead and transfer to VG!
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