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USAA funds vs Vanguard/T. Rowe Price
Old 03-23-2010, 08:46 AM   #1
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USAA funds vs Vanguard/T. Rowe Price

Just wondering about people's experiences with USAA vs. Vanguard/T Rowe in terms of satisfaction/expense ratios, fee etc.

I just became eligible to invest in USAA due to my father's military service and am thinking about the USAA funds for retirement (ie: target funds), but they don't seem to have a long history.

Looks like USAA has very low expense numbers and pretty good performance for a bunch of their funds overall in the past decade.

My investments goals are possible short term bonds (ie: bond index fund perhaps) in addition to riskier long term equities for my retirement.
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Old 03-23-2010, 11:27 AM   #2
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USAA is a wonderful company, but for the most part I'm not a big fan of their mutual funds. The fees are simply too high; most of their funds (except the indexes) are 1% or higher.

One exception is for their precious metals fund, USAGX. The expense ratio is fairly high (but about average for the universe of *actively managed* funds) but it has a very long term record of being one of the best precious metals funds on the planet. The manager has been there since 1994 and as long as he's there I have confidence in this fund for some of my natural resources investing.
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Old 03-23-2010, 11:34 AM   #3
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USAA is a wonderful company, but for the most part I'm not a big fan of their mutual funds. The fees are simply too high; most of their funds (except the indexes) are 1% or higher..
+1. USAA is a very good insurance company and I like the bank a lot, but their mutual funds are just not competitive, cost-wise, with Vanguard.
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Old 03-23-2010, 05:29 PM   #4
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I had all of my MF investments with USAA for many years until about 10 years ago. I found Vanguard, did some reading/comparing, and now I have no MFs @ USAA. If low expense ratio is important to you, Vanguard is the way to go.
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Old 03-23-2010, 05:49 PM   #5
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As others have said, Vanguard and others are superior to USAA funds. Pick one asset class and do some comparisons in Yahoo finance or other sites. When I moved my IRA and SEP to Vanguard, I was able to cut expenses more than 50%. Over a long period expenses matter.
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Old 03-24-2010, 07:14 AM   #6
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Just wondering about people's experiences with USAA vs. Vanguard/T Rowe in terms of satisfaction/expense ratios, fee etc.
As a mutual fund company, USAA is a wonderful insurer.

I think they started their banking, brokerage, & mutual-fund businesses out of a demand to be a one-stop military supporter. They probably also envied the business model of the old USPA&IRA ("Hey, if FirstCommand can make money at it, then anyone can do it!"). However I think it just distracts from their core job of providing insurance, and today I think connectivity makes it easy to go with the best provider for each area.

We started our kid's Roth IRA with T.Rowe Price because they're apparently the only fund company in the world that will custody for a minor custodian. However their expense ratios are way higher than Vanguard & Fidelity, so as soon as she turns 18 she's going to move the IRA over to Fidelity for its lower ERs and its family account-consolidation privileges.

My impression of Vanguard is that their complainants are much more vocal than their satisfied customers. The vast majority are probably happy but have nothing to say.
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Old 03-25-2010, 08:01 PM   #7
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actually that precious metals fund - USAGX - intrigues me.

thanks for the opinions
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