Did you cover this on the board already? I've been puzzling over how to find/factor in the costs my VG or DFA funds incur by trading -- direct commissions and soft dollar costs as well as bid/ask spread costs. My understanding is these costs lower overall returns of the fund below what the long-term data series show that asset class should produce. As a result, I am thinking, just like normal fund management fees, we need to subtract this off our yield assumptions (when using FireCalc, for instance).
Problem is, this data appears devilishly hard to track down -- brokerage commissions for example are hidden in obscure parts of the fund's annual income statement in the prospectus. Has anyone on this board addressed this? Do we know that for most Vanguard index funds or Tax-managed funds, that it amounts to just 0.1 or 0.2% per year (for instance) or some other reasonable rule of thumb?. A recent WSJ study showed that for a hot-money stock fund in small caps and with high turnover, it could amount to as much as 3% per year 'hidden' cost to the fund, in addition to regularly documented fees. If we owned a fund investing in a certain asset class (Smallcap International, for instance) and expected it to return us the long-term historical rates due to that asset class, we'd be toast.
This may be an old thread you've beat to death already, and if so, pls send me to links as I have not found them on my own.
thanks.
Problem is, this data appears devilishly hard to track down -- brokerage commissions for example are hidden in obscure parts of the fund's annual income statement in the prospectus. Has anyone on this board addressed this? Do we know that for most Vanguard index funds or Tax-managed funds, that it amounts to just 0.1 or 0.2% per year (for instance) or some other reasonable rule of thumb?. A recent WSJ study showed that for a hot-money stock fund in small caps and with high turnover, it could amount to as much as 3% per year 'hidden' cost to the fund, in addition to regularly documented fees. If we owned a fund investing in a certain asset class (Smallcap International, for instance) and expected it to return us the long-term historical rates due to that asset class, we'd be toast.
This may be an old thread you've beat to death already, and if so, pls send me to links as I have not found them on my own.
thanks.