Schwab question - MF, same-day exchanges?

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nalor511
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Schwab question - MF, same-day exchanges?

Post by nalor511 »

Hey Folks,

Question for those of you who have extensive experience trading at Schwab. I'm used to being able to do same-day "exchange" at Vanguard, where you get rid of fund A and buy into fund B, and the transaction happens same-day. Meaning I get the price on $date for both funds.

When I tried to do the same thing at Schwab (with VG MFs) it was giving me price on $date for fund A but on $date+1 for fund B. E.g. The "sell" was happening Jul 26 but the "buy" would be happening Jul 27, per the order ticket. This may be expected, but isn't what I want to do.

So I tried to get creative and have it sell the MF and buy the ETF, knowing that ETF purchases are instant... no dice. I *think* it would have worked if I'd created two orders, one for the sell, then used the phantom proceeds do do a straight buy for the ETF. I'm not positive of this though. I was too chicken to try it without asking here first.

So for you experienced fellows, what's the smart way to accomplish what would be an "exchange" at vanguard, at schwab? Thanks!
DebiT
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Re: Schwab question - MF, same-day exchanges?

Post by DebiT »

I’m pretty sure that at Schwab a MF sale settles at the end of the day, so not sure that you can buy ETF right away with those funds. Pretty sure you can buy another MF, because again I think that doesn’t happen until end of the day. Why not just call Schwab customer service and ask? They’ve always explained it well to me in the past (although clearly I haven’t retained the info!)
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nalor511
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Re: Schwab question - MF, same-day exchanges?

Post by nalor511 »

DebiT wrote: Mon Jul 26, 2021 3:29 pm I’m pretty sure that at Schwab a MF sale settles at the end of the day, so not sure that you can buy ETF right away with those funds. Pretty sure you can buy another MF, because again I think that doesn’t happen until end of the day. Why not just call Schwab customer service and ask? They’ve always explained it well to me in the past (although clearly I haven’t retained the info!)
Because people here are usually more knowledgeable about these intricacies than customer service. You cannot buy another MF, at least not using the "sell and buy another", because the date on the "purchase" was tomorrow's date, which would mean tomorrow's price, which isn't what I want.
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Wiggums
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Re: Schwab question - MF, same-day exchanges?

Post by Wiggums »

A work around might be to add margin to your account so that you can submit the sell transaction, followed by a buy transaction without waiting for the funds to settle.
Last edited by Wiggums on Mon Jul 26, 2021 4:00 pm, edited 1 time in total.
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Re: Schwab question - MF, same-day exchanges?

Post by livesoft »

Perhaps the issue is that the funds used are not Schwab mutual funds. Instead they are "out-of-house" Vanguard funds.

I am unaware of any brokerage that allows same day exchanges of non-house funds and that includes Vanguard. Someone will set me straight if I have this wrong. (I consider American funds held at EJ and the like to be "house" funds.)
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RetiredAL
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Re: Schwab question - MF, same-day exchanges?

Post by RetiredAL »

I just re-balanced 2 IRA accounts today, selling both Schwab ETF's and Schwab Mutual Funds, so I saw this first hand today.

The sells of the several ETF's immediately showed in the "balance available to trade". The mutual fund sales did not show in the "balance available to trade", nor did I expect it to be available, as it actually trades after the close for today. So I bought an ETF (ISTB) only using the day's ETF trade proceeds. Tomorrow, I'll buy more ISTB using the Mutual Fund proceeds.
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nalor511
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Re: Schwab question - MF, same-day exchanges?

Post by nalor511 »

RetiredAL wrote: Mon Jul 26, 2021 3:56 pm I just re-balanced 2 IRA accounts today, selling both Schwab ETF's and Schwab Mutual Funds, so I saw this first hand today.

The sells of the several ETF's immediately showed in the "balance available to trade". The mutual fund sales did not show in the "balance available to trade", nor did I expect it to be available, as it actually trades after the close for today. So I bought an ETF (ISTB) only using the day's ETF trade proceeds. Tomorrow, I'll buy more ISTB using the Mutual Fund proceeds.
Ugh, that's not great news, so even if I'd been using Schwab brand MFs, the sale would not have been available to turn into an ETF same-trading-date... drat. If anyone else has input, love to hear it. I guess I've been spoiled by Vanguard's same-day exchanging of funds. I've used the same-day "exchange" of MFs at Fidelity as well, so it did not even occur to me that Schwab may not work that way (as VG and Fido both do it)
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Re: Schwab question - MF, same-day exchanges?

Post by galawdawg »

nalor511 wrote: Mon Jul 26, 2021 3:03 pm Hey Folks,

Question for those of you who have extensive experience trading at Schwab. I'm used to being able to do same-day "exchange" at Vanguard, where you get rid of fund A and buy into fund B, and the transaction happens same-day. Meaning I get the price on $date for both funds.

When I tried to do the same thing at Schwab (with VG MFs) it was giving me price on $date for fund A but on $date+1 for fund B. E.g. The "sell" was happening Jul 26 but the "buy" would be happening Jul 27, per the order ticket. This may be expected, but isn't what I want to do.

So I tried to get creative and have it sell the MF and buy the ETF, knowing that ETF purchases are instant... no dice. I *think* it would have worked if I'd created two orders, one for the sell, then used the phantom proceeds do do a straight buy for the ETF. I'm not positive of this though. I was too chicken to try it without asking here first.

So for you experienced fellows, what's the smart way to accomplish what would be an "exchange" at vanguard, at schwab? Thanks!
Yes, that is the way it works at Schwab and no, there is no "workaround" to accomplish an exchange of mutual funds. However, since you don't know the NAS of the mutual fund you will sell, nor the NAS of the mutual fund you will buy, when you place the "exchange" order, the one day "lag" shouldn't present any real disadvantage for long-term investors.
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Re: Schwab question - MF, same-day exchanges?

Post by nalor511 »

galawdawg wrote: Mon Jul 26, 2021 4:11 pm
nalor511 wrote: Mon Jul 26, 2021 3:03 pm Hey Folks,

Question for those of you who have extensive experience trading at Schwab. I'm used to being able to do same-day "exchange" at Vanguard, where you get rid of fund A and buy into fund B, and the transaction happens same-day. Meaning I get the price on $date for both funds.

When I tried to do the same thing at Schwab (with VG MFs) it was giving me price on $date for fund A but on $date+1 for fund B. E.g. The "sell" was happening Jul 26 but the "buy" would be happening Jul 27, per the order ticket. This may be expected, but isn't what I want to do.

So I tried to get creative and have it sell the MF and buy the ETF, knowing that ETF purchases are instant... no dice. I *think* it would have worked if I'd created two orders, one for the sell, then used the phantom proceeds do do a straight buy for the ETF. I'm not positive of this though. I was too chicken to try it without asking here first.

So for you experienced fellows, what's the smart way to accomplish what would be an "exchange" at vanguard, at schwab? Thanks!
Yes, that is the way it works at Schwab and no, there is no "workaround" to accomplish an exchange of mutual funds. However, since you don't know the NAS of the mutual fund you will sell, nor the NAS of the mutual fund you will buy, when you place the "exchange" order, the one day "lag" shouldn't present any real disadvantage for long-term investors.
If you're trading at right before the market closes you know (roughly) the price of fund1 on day1 (sell), but you do not know the price of fund2 on day2 (buy), that's the issue. If the transaction were just delayed 1 day and both sell+buy took place on day2, that would be different, maybe even somewhat ok, but I don't like committing to the unknown of an entire day's (day2) movement. Effectively those funds are out of the market for a day, buying back in at an unknown price.
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Re: Schwab question - MF, same-day exchanges?

Post by Doctor Rhythm »

Using only Schwab’s mutual funds (not ETFs and not funds issued by other brokerages), I’ve never had problems doing exchanges on the same day. The app asks how many shares of SSSSX to sell and which fund to buy with the proceeds. I did this last week; the transaction date for the sale and purchase were both July 20 and the settlement date for both was July 21.

Personally, I dislike having to transact based on shares rather than dollars, but most of my transactions are pretty imprecise rebalancing or reallocation moves, so I just kind of make an eyeball estimate.
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Re: Schwab question - MF, same-day exchanges?

Post by galawdawg »

nalor511 wrote: Mon Jul 26, 2021 4:15 pm
galawdawg wrote: Mon Jul 26, 2021 4:11 pm
nalor511 wrote: Mon Jul 26, 2021 3:03 pm Hey Folks,

Question for those of you who have extensive experience trading at Schwab. I'm used to being able to do same-day "exchange" at Vanguard, where you get rid of fund A and buy into fund B, and the transaction happens same-day. Meaning I get the price on $date for both funds.

When I tried to do the same thing at Schwab (with VG MFs) it was giving me price on $date for fund A but on $date+1 for fund B. E.g. The "sell" was happening Jul 26 but the "buy" would be happening Jul 27, per the order ticket. This may be expected, but isn't what I want to do.

So I tried to get creative and have it sell the MF and buy the ETF, knowing that ETF purchases are instant... no dice. I *think* it would have worked if I'd created two orders, one for the sell, then used the phantom proceeds do do a straight buy for the ETF. I'm not positive of this though. I was too chicken to try it without asking here first.

So for you experienced fellows, what's the smart way to accomplish what would be an "exchange" at vanguard, at schwab? Thanks!
Yes, that is the way it works at Schwab and no, there is no "workaround" to accomplish an exchange of mutual funds. However, since you don't know the NAS of the mutual fund you will sell, nor the NAS of the mutual fund you will buy, when you place the "exchange" order, the one day "lag" shouldn't present any real disadvantage for long-term investors.
If you're trading at right before the market closes you know (roughly) the price of fund1 on day1 (sell), but you do not know the price of fund2 on day2 (buy), that's the issue. If the transaction were just delayed 1 day and both sell+buy took place on day2, that would be different, maybe even somewhat ok, but I don't like committing to the unknown of an entire day's (day2) movement. Effectively those funds are out of the market for a day, buying back in at an unknown price.
As I said, a single day movement in a fund's price should generally be a non-issue for a long-term buy and hold investor, but your preferences may vary. In that case, if buying and selling at a known price is that important to you, you may wish to consider using ETFs instead of mutual funds.
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Re: Schwab question - MF, same-day exchanges?

Post by RetiredAL »

nalor511 wrote: Mon Jul 26, 2021 4:04 pm
RetiredAL wrote: Mon Jul 26, 2021 3:56 pm I just re-balanced 2 IRA accounts today, selling both Schwab ETF's and Schwab Mutual Funds, so I saw this first hand today.

The sells of the several ETF's immediately showed in the "balance available to trade". The mutual fund sales did not show in the "balance available to trade", nor did I expect it to be available, as it actually trades after the close for today. So I bought an ETF (ISTB) only using the day's ETF trade proceeds. Tomorrow, I'll buy more ISTB using the Mutual Fund proceeds.
Ugh, that's not great news, so even if I'd been using Schwab brand MFs, the sale would not have been available to turn into an ETF same-trading-date... drat. If anyone else has input, love to hear it. I guess I've been spoiled by Vanguard's same-day exchanging of funds. I've used the same-day "exchange" of MFs at Fidelity as well, so it did not even occur to me that Schwab may not work that way (as VG and Fido both do it)
Schwab does have an "all in one ticket" function. I've never used it, thus have no idea if you can mix ETF's with MF on the same ticket, nor in-house vs out-house. It all comes down to settlement day concerns.

2 years ago in a taxable account, just for the giggles of me understanding it, I bought an ETF and sold a MF the same day without enough a covering cash balance. Schwab charged 1 day of margin interest relating to the ETF buy before the MF settlement. As I remember, it was a 10 cent charge.

Before I retired, many times I had used Fidelity's "multiple exchange function" to re-balance my 401K. That worked well.
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Re: Schwab question - MF, same-day exchanges?

Post by anon_investor »

nalor511 wrote: Mon Jul 26, 2021 4:15 pm
galawdawg wrote: Mon Jul 26, 2021 4:11 pm
nalor511 wrote: Mon Jul 26, 2021 3:03 pm Hey Folks,

Question for those of you who have extensive experience trading at Schwab. I'm used to being able to do same-day "exchange" at Vanguard, where you get rid of fund A and buy into fund B, and the transaction happens same-day. Meaning I get the price on $date for both funds.

When I tried to do the same thing at Schwab (with VG MFs) it was giving me price on $date for fund A but on $date+1 for fund B. E.g. The "sell" was happening Jul 26 but the "buy" would be happening Jul 27, per the order ticket. This may be expected, but isn't what I want to do.

So I tried to get creative and have it sell the MF and buy the ETF, knowing that ETF purchases are instant... no dice. I *think* it would have worked if I'd created two orders, one for the sell, then used the phantom proceeds do do a straight buy for the ETF. I'm not positive of this though. I was too chicken to try it without asking here first.

So for you experienced fellows, what's the smart way to accomplish what would be an "exchange" at vanguard, at schwab? Thanks!
Yes, that is the way it works at Schwab and no, there is no "workaround" to accomplish an exchange of mutual funds. However, since you don't know the NAS of the mutual fund you will sell, nor the NAS of the mutual fund you will buy, when you place the "exchange" order, the one day "lag" shouldn't present any real disadvantage for long-term investors.
If you're trading at right before the market closes you know (roughly) the price of fund1 on day1 (sell), but you do not know the price of fund2 on day2 (buy), that's the issue. If the transaction were just delayed 1 day and both sell+buy took place on day2, that would be different, maybe even somewhat ok, but I don't like committing to the unknown of an entire day's (day2) movement. Effectively those funds are out of the market for a day, buying back in at an unknown price.
What you want is possible at Vanguard. Not sure if it is possible at other brokerages.
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Re: Schwab question - MF, same-day exchanges?

Post by RetiredAL »

galawdawg wrote: Mon Jul 26, 2021 4:26 pm
nalor511 wrote: Mon Jul 26, 2021 4:15 pm
galawdawg wrote: Mon Jul 26, 2021 4:11 pm
nalor511 wrote: Mon Jul 26, 2021 3:03 pm Hey Folks,

Question for those of you who have extensive experience trading at Schwab. I'm used to being able to do same-day "exchange" at Vanguard, where you get rid of fund A and buy into fund B, and the transaction happens same-day. Meaning I get the price on $date for both funds.

When I tried to do the same thing at Schwab (with VG MFs) it was giving me price on $date for fund A but on $date+1 for fund B. E.g. The "sell" was happening Jul 26 but the "buy" would be happening Jul 27, per the order ticket. This may be expected, but isn't what I want to do.

So I tried to get creative and have it sell the MF and buy the ETF, knowing that ETF purchases are instant... no dice. I *think* it would have worked if I'd created two orders, one for the sell, then used the phantom proceeds do do a straight buy for the ETF. I'm not positive of this though. I was too chicken to try it without asking here first.

So for you experienced fellows, what's the smart way to accomplish what would be an "exchange" at vanguard, at schwab? Thanks!
Yes, that is the way it works at Schwab and no, there is no "workaround" to accomplish an exchange of mutual funds. However, since you don't know the NAS of the mutual fund you will sell, nor the NAS of the mutual fund you will buy, when you place the "exchange" order, the one day "lag" shouldn't present any real disadvantage for long-term investors.
If you're trading at right before the market closes you know (roughly) the price of fund1 on day1 (sell), but you do not know the price of fund2 on day2 (buy), that's the issue. If the transaction were just delayed 1 day and both sell+buy took place on day2, that would be different, maybe even somewhat ok, but I don't like committing to the unknown of an entire day's (day2) movement. Effectively those funds are out of the market for a day, buying back in at an unknown price.
As I said, a single day movement in a fund's price should generally be a non-issue for a long-term buy and hold investor, but your preferences may vary. In that case, if buying and selling at a known price is that important to you, you may wish to consider using ETFs instead of mutual funds.
+1 Too many times people get caught staring the minutia and instead of seeing the big picture.
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nalor511
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Re: Schwab question - MF, same-day exchanges?

Post by nalor511 »

RetiredAL wrote: Mon Jul 26, 2021 4:40 pm +1 Too many times people get caught staring the minutia and instead of seeing the big picture.
Let's not judge what others want in their brokerage, 'eh? Purely asking if anyone knows how to achieve this at Schwab, if not, fine.
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nalor511
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Re: Schwab question - MF, same-day exchanges?

Post by nalor511 »

anon_investor wrote: Mon Jul 26, 2021 4:35 pm What you want is possible at Vanguard. Not sure if it is possible at other brokerages.
It works just fine at Fidelity as well :oops:
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Re: Schwab question - MF, same-day exchanges?

Post by tonyclifton »

[Corrected]

Using schwab.com you can sell a mutual fund and buy a different mutual fund in one order transaction that is handled either on the same trading day (if both Mutual Funds are Schwab Mutual Funds) or two trading days (if the Mutual Funds being sold and bought are not both Schwab Mutual Funds). Swap funds is the choice in the order type drop down menu.

You cannot sell a mutual fund and buy an ETF in one order transaction. You can do this in two order transactions spread one trading day apart.

You cannot sell an ETF and buy a mutual fund in one order transaction. You can do this in two order transactions on the same trading day.
Last edited by tonyclifton on Tue Jul 27, 2021 8:30 am, edited 1 time in total.
SlowMovingInvestor
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Re: Schwab question - MF, same-day exchanges?

Post by SlowMovingInvestor »

tonyclifton wrote: Mon Jul 26, 2021 4:46 pm Using schwab.com you can sell a mutual fund and buy a different mutual fund in one order transaction that is handled on the same trading day (swap funds is the choice in the order type drop down menu).
I think you can only do that if they are both Schwab funds.
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Re: Schwab question - MF, same-day exchanges?

Post by anon_investor »

nalor511 wrote: Mon Jul 26, 2021 4:43 pm
anon_investor wrote: Mon Jul 26, 2021 4:35 pm What you want is possible at Vanguard. Not sure if it is possible at other brokerages.
It works just fine at Fidelity as well :oops:
I really like this feature at Vanguard, great for tax loss harvesting.
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Re: Schwab question - MF, same-day exchanges?

Post by anon_investor »

nalor511 wrote: Mon Jul 26, 2021 4:43 pm
RetiredAL wrote: Mon Jul 26, 2021 4:40 pm +1 Too many times people get caught staring the minutia and instead of seeing the big picture.
Let's not judge what others want in their brokerage, 'eh? Purely asking if anyone knows how to achieve this at Schwab, if not, fine.
It wasn't minutia in March 2020, not being able to do this would have cost me a lot of money when I executed tax loss harvesting, the market was just too volatile, Vanguard made it easy to go from VFIAX to VTSAX without 1 second out of the market.
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Re: Schwab question - MF, same-day exchanges?

Post by tonyclifton »

SlowMovingInvestor wrote: Mon Jul 26, 2021 5:24 pm
tonyclifton wrote: Mon Jul 26, 2021 4:46 pm Using schwab.com you can sell a mutual fund and buy a different mutual fund in one order transaction that is handled on the same trading day (swap funds is the choice in the order type drop down menu).
I think you can only do that if they are both Schwab funds.
I put in an order to test this out...You do enter as one order but they are handled in two steps on two different days. Here are the order notes with the relevant portions in bold and underline:

1.This SELL order will be executed 07/27/2021.
2.The estimated net proceeds from this Sell order is $ xxxx.
3.This sell order does not have a transaction fee.
4.This is a "sell a fund/buy another fund" order. One fund is being sold and the proceeds will be used to buy another fund.
5.The fund you are attempting to sell may extend the settlement date on the sell side of this transaction. If the sell side settlement date is extended, the date of the buy order will also be extended which in turn may affect the NAV.
6.This account currently holds xxxx shares of xxxx.
7.This mutual fund has special restrictions. If you sell Any (or more) of this fund's shares, the Fund will restrict you from buying or exchanging its shares again in this account for the next 30 days.
8.This BUY order will be executed 07/28/2021.
9.The transaction fee for this buy order is $ 49.95.
10.If the fund you are buying closes to new purchases prior to or on the settlement date of the buy order for this transaction, the fund company may reject your buy order.


I will go back and correct my post.
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Re: Schwab question - MF, same-day exchanges?

Post by UpperNwGuy »

livesoft wrote: Mon Jul 26, 2021 3:50 pm Perhaps the issue is that the funds used are not Schwab mutual funds. Instead they are "out-of-house" Vanguard funds.

I am unaware of any brokerage that allows same day exchanges of non-house funds and that includes Vanguard. Someone will set me straight if I have this wrong. (I consider American funds held at EJ and the like to be "house" funds.)
Yep, that's your problem When I exchanged one Schwab mutual fund for another when I was tax loss harvesting, it all happened the same day because they were both in-house funds.
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Re: Schwab question - MF, same-day exchanges?

Post by nalor511 »

UpperNwGuy wrote: Tue Jul 27, 2021 9:09 am
livesoft wrote: Mon Jul 26, 2021 3:50 pm Perhaps the issue is that the funds used are not Schwab mutual funds. Instead they are "out-of-house" Vanguard funds.

I am unaware of any brokerage that allows same day exchanges of non-house funds and that includes Vanguard. Someone will set me straight if I have this wrong. (I consider American funds held at EJ and the like to be "house" funds.)
Yep, that's your problem When I exchanged one Schwab mutual fund for another when I was tax loss harvesting, it all happened the same day because they were both in-house funds.
I hear you guys, but I'm sort of in this pickle where I'm fine with a Schwab fund as the replacement, but I currently own a VG fund, so just trying to figure out how to get an exchange in without being out of market for the day. According to Schwab support, this is actually impossible, they do not do same-day exchanges like this, so just FYI for others who may be reading.

Don't bring VG MFs to Schwab and expect same day exchanges
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Re: Schwab question - MF, same-day exchanges?

Post by typical.investor »

nalor511 wrote: Tue Jul 27, 2021 3:56 pm
UpperNwGuy wrote: Tue Jul 27, 2021 9:09 am
livesoft wrote: Mon Jul 26, 2021 3:50 pm Perhaps the issue is that the funds used are not Schwab mutual funds. Instead they are "out-of-house" Vanguard funds.

I am unaware of any brokerage that allows same day exchanges of non-house funds and that includes Vanguard. Someone will set me straight if I have this wrong. (I consider American funds held at EJ and the like to be "house" funds.)
Yep, that's your problem When I exchanged one Schwab mutual fund for another when I was tax loss harvesting, it all happened the same day because they were both in-house funds.
I hear you guys, but I'm sort of in this pickle where I'm fine with a Schwab fund as the replacement, but I currently own a VG fund, so just trying to figure out how to get an exchange in without being out of market for the day. According to Schwab support, this is actually impossible, they do not do same-day exchanges like this, so just FYI for others who may be reading.

Don't bring VG MFs to Schwab and expect same day exchanges
Been there and I too didn’t want to be out of the market.

Solution:

Day1: Sell bonds (if mutual fund otherwise if selling an ETF, you can do it on the same day you buy the stock ETFs)

Day 2: Buy stock ETFs with bond sale money, sell stock mutual fund.

Day 3: Buy back bonds with stock mutual fund proceeds.

I mean bonds typically don’t fluctuate that much, but maybe avoid doing it around days where the Fed has an announcement coming out.
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nalor511
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Re: Schwab question - MF, same-day exchanges?

Post by nalor511 »

typical.investor wrote: Tue Jul 27, 2021 7:37 pm
nalor511 wrote: Tue Jul 27, 2021 3:56 pm
UpperNwGuy wrote: Tue Jul 27, 2021 9:09 am
livesoft wrote: Mon Jul 26, 2021 3:50 pm Perhaps the issue is that the funds used are not Schwab mutual funds. Instead they are "out-of-house" Vanguard funds.

I am unaware of any brokerage that allows same day exchanges of non-house funds and that includes Vanguard. Someone will set me straight if I have this wrong. (I consider American funds held at EJ and the like to be "house" funds.)
Yep, that's your problem When I exchanged one Schwab mutual fund for another when I was tax loss harvesting, it all happened the same day because they were both in-house funds.
I hear you guys, but I'm sort of in this pickle where I'm fine with a Schwab fund as the replacement, but I currently own a VG fund, so just trying to figure out how to get an exchange in without being out of market for the day. According to Schwab support, this is actually impossible, they do not do same-day exchanges like this, so just FYI for others who may be reading.

Don't bring VG MFs to Schwab and expect same day exchanges
Been there and I too didn’t want to be out of the market.

Solution:

Day1: Sell bonds (if mutual fund otherwise if selling an ETF, you can do it on the same day you buy the stock ETFs)

Day 2: Buy stock ETFs with bond sale money, sell stock mutual fund.

Day 3: Buy back bonds with stock mutual fund proceeds.

I mean bonds typically don’t fluctuate that much, but maybe avoid doing it around days where the Fed has an announcement coming out.
Thanks for the tip! Sadly this is in an IRA, or I could use cash, or Margin, neither of which do I have in my IRA
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Re: Schwab question - MF, same-day exchanges?

Post by ColoRetiredGirl »

nalor511 wrote: Mon Jul 26, 2021 3:34 pm
DebiT wrote: Mon Jul 26, 2021 3:29 pm I’m pretty sure that at Schwab a MF sale settles at the end of the day, so not sure that you can buy ETF right away with those funds. Pretty sure you can buy another MF, because again I think that doesn’t happen until end of the day. Why not just call Schwab customer service and ask? They’ve always explained it well to me in the past (although clearly I haven’t retained the info!)
Because people here are usually more knowledgeable about these intricacies than customer service. You cannot buy another MF, at least not using the "sell and buy another", because the date on the "purchase" was tomorrow's date, which would mean tomorrow's price, which isn't what I want.
Schwab has an excellent customer service department. If the person on the phone is unsure, they will transfer you to the correct department. I would ask them your question.
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Re: Schwab question - MF, same-day exchanges?

Post by nalor511 »

ColoRetiredGirl wrote: Wed Jul 28, 2021 9:47 am
nalor511 wrote: Mon Jul 26, 2021 3:34 pm
DebiT wrote: Mon Jul 26, 2021 3:29 pm I’m pretty sure that at Schwab a MF sale settles at the end of the day, so not sure that you can buy ETF right away with those funds. Pretty sure you can buy another MF, because again I think that doesn’t happen until end of the day. Why not just call Schwab customer service and ask? They’ve always explained it well to me in the past (although clearly I haven’t retained the info!)
Because people here are usually more knowledgeable about these intricacies than customer service. You cannot buy another MF, at least not using the "sell and buy another", because the date on the "purchase" was tomorrow's date, which would mean tomorrow's price, which isn't what I want.
Schwab has an excellent customer service department. If the person on the phone is unsure, they will transfer you to the correct department. I would ask them your question.
I did resort to contacting CS, they confirmed there is no way to swap non-Schwab MF shares for something (anything) else without being out of the market at least 1 day.

In better news, Fidelity lets you work around this issue and reinvest 90% of the swapped value, should this situation have occured with them.
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Re: Schwab question - MF, same-day exchanges?

Post by anon_investor »

nalor511 wrote: Wed Jul 28, 2021 1:12 pm
ColoRetiredGirl wrote: Wed Jul 28, 2021 9:47 am
nalor511 wrote: Mon Jul 26, 2021 3:34 pm
DebiT wrote: Mon Jul 26, 2021 3:29 pm I’m pretty sure that at Schwab a MF sale settles at the end of the day, so not sure that you can buy ETF right away with those funds. Pretty sure you can buy another MF, because again I think that doesn’t happen until end of the day. Why not just call Schwab customer service and ask? They’ve always explained it well to me in the past (although clearly I haven’t retained the info!)
Because people here are usually more knowledgeable about these intricacies than customer service. You cannot buy another MF, at least not using the "sell and buy another", because the date on the "purchase" was tomorrow's date, which would mean tomorrow's price, which isn't what I want.
Schwab has an excellent customer service department. If the person on the phone is unsure, they will transfer you to the correct department. I would ask them your question.
I did resort to contacting CS, they confirmed there is no way to swap non-Schwab MF shares for something (anything) else without being out of the market at least 1 day.

In better news, Fidelity lets you work around this issue and reinvest 90% of the swapped value, should this situation have occured with them.
Note to self, convert all Vanguard mutual funds to the ETF share class before transfering out of Vanguard.
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Re: Schwab question - MF, same-day exchanges?

Post by nalor511 »

Wiggums wrote: Mon Jul 26, 2021 3:44 pm A work around might be to add margin to your account so that you can submit the sell transaction, followed by a buy transaction without waiting for the funds to settle.
I just discovered there's a form of margin called "limited margin" that schwab does allow in IRAs --- has anyone used this to sell a MF and buy an ETF right away? Did you get charged interest?
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Re: Schwab question - MF, same-day exchanges?

Post by wander »

Schwab does not give you same-day exchange for Mutual Funds.
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Re: Schwab question - MF, same-day exchanges?

Post by nalor511 »

wander wrote: Thu Jul 29, 2021 4:48 pm Schwab does not give you same-day exchange for Mutual Funds.
Yes that's what the whole thread is about, wondering if anyone's tried it with Limited Margin because the broker (live chat) says that would work to switch to ETF same day
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Re: Schwab question - MF, same-day exchanges?

Post by galawdawg »

nalor511 wrote: Thu Jul 29, 2021 4:53 pm
wander wrote: Thu Jul 29, 2021 4:48 pm Schwab does not give you same-day exchange for Mutual Funds.
Yes that's what the whole thread is about, wondering if anyone's tried it with Limited Margin because the broker (live chat) says that would work to switch to ETF same day
Seems like a lot of trouble to me to avoid one day out of the market for a long-term buy and hold mutual fund investor, but to each his own! :happy

Have you called your advisor and discussed what you are trying to accomplish and inquired further about the limited margin? I have found that my advisor is very responsive and knowledgeable.
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Re: Schwab question - MF, same-day exchanges?

Post by nalor511 »

galawdawg wrote: Thu Jul 29, 2021 5:00 pm
nalor511 wrote: Thu Jul 29, 2021 4:53 pm
wander wrote: Thu Jul 29, 2021 4:48 pm Schwab does not give you same-day exchange for Mutual Funds.
Yes that's what the whole thread is about, wondering if anyone's tried it with Limited Margin because the broker (live chat) says that would work to switch to ETF same day
Seems like a lot of trouble to me to avoid one day out of the market for a long-term buy and hold mutual fund investor, but to each his own! :happy

Have you called your advisor and discussed what you are trying to accomplish and inquired further about the limited margin? I have found that my advisor is very responsive and knowledgeable.
I hear you. Over the last year there were plenty of 10% up/down days, which humbled me enough that I refuse to be out of the market for a day. I'd rather not rebalance, I guess, but I'm still looking for a solution.

My advisor flat out said no, but I didn't specifically ask about the PM idea, because I didn't know about it.
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Re: Schwab question - MF, same-day exchanges?

Post by sycamore »

nalor511 wrote: Thu Jul 29, 2021 5:38 pm
galawdawg wrote: Thu Jul 29, 2021 5:00 pm
nalor511 wrote: Thu Jul 29, 2021 4:53 pm
wander wrote: Thu Jul 29, 2021 4:48 pm Schwab does not give you same-day exchange for Mutual Funds.
Yes that's what the whole thread is about, wondering if anyone's tried it with Limited Margin because the broker (live chat) says that would work to switch to ETF same day
Seems like a lot of trouble to me to avoid one day out of the market for a long-term buy and hold mutual fund investor, but to each his own! :happy

Have you called your advisor and discussed what you are trying to accomplish and inquired further about the limited margin? I have found that my advisor is very responsive and knowledgeable.
I hear you. Over the last year there were plenty of 10% up/down days, which humbled me enough that I refuse to be out of the market for a day. I'd rather not rebalance, I guess, but I'm still looking for a solution.

My advisor flat out said no, but I didn't specifically ask about the PM idea, because I didn't know about it.
I'll try thinking out of the box...

What about thinking in terms of the amount of money that's out of the market?
Split your mutual fund into ten parts. Sell one part each on days 1 to 10.
Buy your ETF in ten separate parts on days 2 to 11. I think this allows the settlement to work out right.

Only 1/10 of the original amount is ever out of the market. Though it'd be out the market for 10 days. But still, maybe not so bad? And you do have to do more work this way. Just a thought.
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Re: Schwab question - MF, same-day exchanges?

Post by AlohaJoe »

nalor511 wrote: Thu Jul 29, 2021 5:38 pm Over the last year there were plenty of 10% up/down days
Schwab's S&P 500 fund hasn't had a single day since January 1, 2020, when it was up +10%. And there was only a single day (March 16, 2020) when it was down -10%. There were only 10 days since January 1, 2020, when it was even up/down 5%.
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Re: Schwab question - MF, same-day exchanges?

Post by anon_investor »

AlohaJoe wrote: Thu Jul 29, 2021 9:25 pm
nalor511 wrote: Thu Jul 29, 2021 5:38 pm Over the last year there were plenty of 10% up/down days
Schwab's S&P 500 fund hasn't had a single day since January 1, 2020, when it was up +10%. And there was only a single day (March 16, 2020) when it was down -10%. There were only 10 days since January 1, 2020, when it was even up/down 5%.
Missing a 5% swing sounds not great either.
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Re: Schwab question - MF, same-day exchanges?

Post by nalor511 »

anon_investor wrote: Thu Jul 29, 2021 9:42 pm
AlohaJoe wrote: Thu Jul 29, 2021 9:25 pm
nalor511 wrote: Thu Jul 29, 2021 5:38 pm Over the last year there were plenty of 10% up/down days
Schwab's S&P 500 fund hasn't had a single day since January 1, 2020, when it was up +10%. And there was only a single day (March 16, 2020) when it was down -10%. There were only 10 days since January 1, 2020, when it was even up/down 5%.
Missing a 5% swing sounds not great either.
+1
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Re: Schwab question - MF, same-day exchanges?

Post by AlohaJoe »

anon_investor wrote: Thu Jul 29, 2021 9:42 pm
AlohaJoe wrote: Thu Jul 29, 2021 9:25 pm
nalor511 wrote: Thu Jul 29, 2021 5:38 pm Over the last year there were plenty of 10% up/down days
Schwab's S&P 500 fund hasn't had a single day since January 1, 2020, when it was up +10%. And there was only a single day (March 16, 2020) when it was down -10%. There were only 10 days since January 1, 2020, when it was even up/down 5%.
Missing a 5% swing sounds not great either.
On the contrary, missing a 5% swing down is fantastic. Why wouldn't you want that? And over the past year, the volatility has been asymmetrically concentrated on the downside.

Anyway, my real point was that the OP appeared to be making decisions based on made up numbers, which is never a good way to approach investing.
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Re: Schwab question - MF, same-day exchanges?

Post by nalor511 »

To provide an update awhile later, I've been back and forth with customer service, trying to find out whether a buy in dollars and a sell in dollars would both execute same day, they said "if you can get a broker to polish your buy through then it will execute, but you cannot do it yourself"
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Re: Schwab question - MF, same-day exchanges?

Post by illumination »

My understanding is it needs to be in the same fund family to do this, and has to be the brokerage "house" mutual fund. It seems to have something to do with funds clearing.

Fidelity is the same way, I couldn't exchange say a Dodge&Cox fund for a Fidelity fund on the same day.
But a Fidelity fund for a Fidelity fund can be done same day (if the account is with Fidelity) because I've done it. I'm fairly sure it's that way at Schwab (and Vanguard)

If you're really married to mutual funds and a specific company's mutual fund, probably should do your brokerage there. Or go with ETFs and not have these limitations.
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Re: Schwab question - MF, same-day exchanges?

Post by nalor511 »

illumination wrote: Wed Aug 18, 2021 5:31 pm My understanding is it needs to be in the same fund family to do this, and has to be the brokerage "house" mutual fund. It seems to have something to do with funds clearing.

Fidelity is the same way, I couldn't exchange say a Dodge&Cox fund for a Fidelity fund on the same day.
But a Fidelity fund for a Fidelity fund can be done same day (if the account is with Fidelity) because I've done it. I'm fairly sure it's that way at Schwab (and Vanguard)

If you're really married to mutual funds and a specific company's mutual fund, probably should do your brokerage there. Or go with ETFs and not have these limitations.
Yup, that's my leaning as well. I will hold these funds another year then bounce back to VG for an ETF conversion, unless another option presents itself.

I should have done more research before my move. But who needs to rebalance, really?

I also think it's silly, mf sell clears in 1 day, so does buy, should not be so much of a problem regardless whose MF it is
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Re: Schwab question - MF, same-day exchanges?

Post by illumination »

nalor511 wrote: Wed Aug 18, 2021 5:38 pm
illumination wrote: Wed Aug 18, 2021 5:31 pm My understanding is it needs to be in the same fund family to do this, and has to be the brokerage "house" mutual fund. It seems to have something to do with funds clearing.

Fidelity is the same way, I couldn't exchange say a Dodge&Cox fund for a Fidelity fund on the same day.
But a Fidelity fund for a Fidelity fund can be done same day (if the account is with Fidelity) because I've done it. I'm fairly sure it's that way at Schwab (and Vanguard)

If you're really married to mutual funds and a specific company's mutual fund, probably should do your brokerage there. Or go with ETFs and not have these limitations.
Yup, that's my leaning as well. I will hold these funds another year then bounce back to VG for an ETF conversion, unless another option presents itself.

I should have done more research before my move. But who needs to rebalance, really?

I also think it's silly, mf sell clears in 1 day, so does buy, should not be so much of a problem regardless whose MF it is
I think the settlement period can be up to 3 days. My guess is they view it almost like a bank does when they put a "hold" on an out of state check that came from outside their bank.

I had a situation where it was a really large amount in a mutual fund and couldn't do same day transfer, so I did several smaller amounts over several days to sort of spread around the risk of some giant market move over one day working against me. More psychological than anything.
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Re: Schwab question - MF, same-day exchanges?

Post by nalor511 »

I'm extremely glad to report that my sell in dollars and buy in dollars rebalance both executed on the same day, despite customer service assurance that they wouldn't. :thumbsup
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