Comments on: Low-Minimum Index Funds and Commission-Free ETFs for Small Investors

By: KD

KD — Tue, 16 Feb 2010 17:19:20 +0000

Yup, I understand. Thanks.

By: TFB

TFB — Tue, 16 Feb 2010 16:35:47 +0000

KD – Yes, it would. I only gave the example to make it comparable with the portfolios made up of low-minimum, commission-free funds and ETFs at Schwab and Fidelity.

By: KD

KD — Tue, 16 Feb 2010 16:17:08 +0000

TFB, does the VEA+VWO combo miss out Canada? If so, would VEU be a better fit, even though its more expensive?

By: TFB

TFB — Sat, 13 Feb 2010 00:02:01 +0000

Jeff – Fidelity usually requires $2,500 minimum for each fund. If you commit to $200 a month in an IRA, they will let you start with no minimum. Otherwise you only have those 25 commission-free ETFs for low minimum.

By: Jeff

Jeff — Fri, 12 Feb 2010 23:49:39 +0000

Does Fidelity have any funds with low minimums?

By: Charlotte_Res

Charlotte_Res — Fri, 12 Feb 2010 15:18:58 +0000

Thanks for this info. If these features are available to IRA’s its a no-brainer for young professionals to begin saving for retirement with these firms.

By: TFB

TFB — Fri, 12 Feb 2010 04:54:01 +0000

Ari – Thank you for reminding us about the underlying indexes. By coincidence I did not include SCHB in my examples. The Schwab open-end total stock market index fund tracks the DJ Wilshire 5000 Index. Its international index fund tracks a Schwab index. For a small portfolio though, these finer details don’t matter that much. If one has to pay a commission to buy VTI every month, one is still better off buying SCHB without a commission.

By: RetirementInvestingToday

RetirementInvestingToday — Thu, 11 Feb 2010 20:34:03 +0000

It continually amazes me how low the fees for ETF’s are in the US. Here in rip off Britain I can only wish for low fees like you describe.

For example
Lyxor FTSE 100 ETF at 0.3%
Lyxor Emerging Markets ETF at 0.65%

It gets even worse buying in a tax wrapper like my employers pension where I am being charged a minimum of 1% for index tracker funds.

This means my total asset allocation has fees of 0.6% and I think I’m doing well to keep it that low.

By: Ari Weinberg

Ari Weinberg — Thu, 11 Feb 2010 17:49:10 +0000

Always be mindful of what index your ETFs are tracking. SCHB and VTI do not track the same thing.

By: TFB

TFB — Thu, 11 Feb 2010 15:28:14 +0000

KD – Buying Treasury notes at WellsTrade costs $45 for each trade. You will have to buy bond funds or ETFs at WellsTrade. Larger accounts have more options. This post is primarily focused on small portfolios. The amazing part is the cost can be so low even for small portfolios.

The comparable portfolio at WellsTrade (min. $25k) would be:

42% VTI @ 0.09%
14% VEA @ 0.16%
4% VWO @ 0.27%
40% BND @ 0.14%
100% Total @ 0.13%