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Old 06-22-2007, 09:05 AM   #1
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Join Date: May 2006
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Not quite an individual security question, but . . .

FBIDX is Fido's total bond index funds and BND is Vanguard's total bond index ETF. Vanguard's ER is .11% and Fido's is .31%. The holdings (duration and quality) are very similar as they should be. Current 30-day yields are 5.16% and 5.41%

Assuming the commission is not material, is there any reason to hold onto FBIDX in lieu of buying BND?

They move up and down together so I assume buying one and selling the other at the end of day NAV is pretty much a wash.

The only reasons I can think of are the convenience of one-day withdraws and not paying commissions for purchases and sales, but this is just "secondary cash" behind the money market fund, so I've never touched it so the commmissions are immaterial. Is there anything else I haven't considered? Some other reason not to hold a bond fund as an ETF?
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Old 06-22-2007, 10:05 AM   #2
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I would think the only difference is the purchase/sale costs. If you are averagering in or out the costs becomes important. I think you can average into the Vanguard Total Bond fund and then convert it to the ETF for free.
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