mutual fund questions

[absolu7]

as a background i have my IRA via fidelity, so out of convenience id probably buy mutual funds through them as well.

1. if i decide to buy fidelity funds do i have to pay a brokerage fee?
2. can i buy for example vanguard or oppenheimer funds via fidelity, and if so do i have to pay monthly brokerage fees on that.

in other words when buying funds via fidelity what kind of fees should i expect to pay, not mentioning transaction fees of course.

 

[DaveSimmons]

At Vanguard you can buy their own funds with no brokerage fee, but you pay fees for any other company's funds. I assume Fidelity is the same.

The fee is each time you buy or sell a block of shares, not a monthly fee. (You don't pay fees for dividend reinvestment purchases.)

Many funds have $10 fees quarterly or annually if you have less than $5K or $10 in that fund, to cover things like the 300 page prospectus.

Fidelity has a good S&P 500 fund of its own, so you don't need to buy Vanguard's VFINX.

 

[maddogchen]

question:
if you buy a mutual fund with a brokerage company like Schwab or Ameritrade for an IRA, you still need to buy the minimum right?

 

[Matthias99]

as a background i have my IRA via fidelity, so out of convenience id probably buy mutual funds through them as well.

1. if i decide to buy fidelity funds do i have to pay a brokerage fee?
2. can i buy for example vanguard or oppenheimer funds via fidelity, and if so do i have to pay monthly brokerage fees on that.

in other words when buying funds via fidelity what kind of fees should i expect to pay, not mentioning transaction fees of course.

http://personal.fidelity.com/products/funds/funds_frame.shtml.cvsr

No load, no transaction fees

AFAIK you don't pay up-front fees or loads buying Fidelity funds through Fidelity, but almost all mutual funds will charge some percentage of your investment on a monthly or annual basis.

They may sell some other companies' funds without fees/loads, but I know that at least some of them do carry fees. Just poking around the website, some are listed as 'no transaction fee'; you should check for the individual funds you are interested in.

question:
if you buy a mutual fund with a brokerage company like Schwab or Ameritrade for an IRA, you still need to buy the minimum right?

If you buy into it through a secondary broker, they can in theory have a lower minimum than the fund manager itself -- or a higher one. E.g. Schwab could buy $10K worth of shares in some fund that normally has a $10K minimum, then resell it as ten $1K blocks (or as part of another mutual fund that has a lower minimum). Or they could buy shares in something that has a very low minimum (like $250) and then resell them as part of a Schwab mutual fund that has a $10K minimum

Some companies have lower minimums for retirement funds like IRAs than general investment accounts (since you're less likely to just withdraw all the money and bolt).

 

[alrocky]

Originally posted by: DaveSimmons
Fidelity has a good S&P 500 fund of its own, so you don't need to buy Vanguard's VFINX.

Expense Ratio - Min Investment = $10,000 each
0.10% - Fidelity Spartan Total Market Index (FSTMX)
0.10% - Fidelity Spartan 500 Index (FSMKX)
0.10% - Fidelity Spartan International Index (FSIIX)

Expense Ratio - Min Investment = $3,000 each
0.19% - Vanguard Total Stock Market Index (VTSMX)
0.18% - Vanguard 500 Index (VFINX)
0.27% - Vanguard Developed Markets Index (VDMIX)

OP, if you can pony up the $10k, take the lower Expense Ratio.

FYI, Vanguard changed it's fee policy for those who opt for e-mail for all fund materials.

 

[imported_Lothar]

Originally posted by: absolu7
as a background i have my IRA via fidelity, so out of convenience id probably buy mutual funds through them as well.

1. if i decide to buy fidelity funds do i have to pay a brokerage fee?
2. can i buy for example vanguard or oppenheimer funds via fidelity, and if so do i have to pay monthly brokerage fees on that.

in other words when buying funds via fidelity what kind of fees should i expect to pay, not mentioning transaction fees of course.

2. Fidelity investors have access to the company's 208 mutual funds (and 1,132 others) without a fee, but you'll pay a whopping $75 if you want to buy a fund outside the network.
From page 2 of The Right Broker for You (the article is almost a year old but I doubt the pricing has changed much.)
Fidelity will most likely charge you an arm and a leg for buying Oppenheimer and Vanguard funds.

 

[IEC]

I personally use T. Rowe Price and as a 20-year old university student am putting in <$100/mo into each of two funds: PRLAX and TREMX

No load/no-fees, so I won't pay anything up-front. The expense ratio is a bit high at ~1.25% for each, but overall they look to be solid picks for a "lazy" portfolio. I'll probably be adding 2-3 more funds and increasing the amounts once I graduate, go to law school, and then get a job.

For now though it's basically a savings account for me with the added element of excitement from following the stock market

 

[DaveSimmons]

> The expense ratio is a bit high at ~1.25% for each,

Ouch, that exepnse ratio is more than 1% higher than a Vanguard or Fidelity fund. Still, the returns will over time be much better than a regular savings account.

I know Vanguard has some kind of monthly automatic investment plan, though I haven't looked at the mnimum amount. Fidelity might have one too.

 

[alrocky]

Originally posted by: Spartan Niner
As a 20-year old university student am putting in <$100/mo into each of two funds: PRLAX and TREMX
overall they look to be solid picks for a "lazy" portfolio.

They are 'regional stock plays' not really suitable as part of a "lazy portfiolio' if they each represent double digit percentages of your portfolio. Both have been on a tear for several years which tends to attract a lot of performance chasing attention. Although PRLAX is a Morningstar Pick, having 4 or 5 stars only means a fund has done well in the past and that has absolutely no meaningful predictive value for future performance.

"Solid picks" for the core or majority holding of one's portfolio would be a Total Stock Market (VTSMX) and a Total International Stock Market Index (VGTSX) or similar funds from another no load, low exense ratio, mutual fund company.

 

[Azurik]

Fidelity doesn't charge for buy/sell on their own funds or many other funds they offer. For the others, they charge $75 up front to buy, but you can sell the fund in portions as many times as you want for free. Essentially, Fidelity isn't THAT expensive. TD Ameritrade for example will charge $50 to buy then $50 to sell.

 

[Jeff7181]

Originally posted by: Spartan Niner
I personally use T. Rowe Price and as a 20-year old university student am putting in <$100/mo into each of two funds: PRLAX and TREMX

No load/no-fees, so I won't pay anything up-front. The expense ratio is a bit high at ~1.25% for each, but overall they look to be solid picks for a "lazy" portfolio. I'll probably be adding 2-3 more funds and increasing the amounts once I graduate, go to law school, and then get a job.

For now though it's basically a savings account for me with the added element of excitement from following the stock market

That's funny I just sold TREMX.