Is the portability of ETFs worth much?

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ribonucleic
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Is the portability of ETFs worth much?

Post by ribonucleic »

I prefer mutual funds over ETFs. And I prefer Vanguard funds over those of its competitors.

But...

Schwab is very attractive for its physical locations and its customer service reputation. And you can’t buy Vanguard mutual funds at Schwab without paying extra. (Assuming they’re even available.)

And even if the cost and availability weren’t important, how difficult would it be - if Schwab became disappointing - to port Vanguard mutual shares from Schwab to, say, Fidelity?

What I’m asking is: Would it be worth accepting what I dislike about ETFs - chiefly the bid/ask spread - for the peace of mind of knowing that I can always pick up and move them to another commission-free brokerage? Or would it be signing on for a certain annoyance every quarter (assuming that frequent a rebalancing) to protect against a potential annoyance that would only come up after possibly 5 to 10 years?
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David Jay
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Re: Is the portability of ETFs worth much?

Post by David Jay »

Is this in taxable or in retirement accounts?
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Re: Is the portability of ETFs worth much?

Post by nisiprius »

As nearly as I can remember--and it was years ago and all fee schedules have changed--I have never paid a fee for transferring a mutual fund in kind from one brokerage to another. The issues, of course, are fees for any transactions on the fund once it has been transferred, and the issue of whether or not the fund can be held at the receiving brokerage.

There may be an account closing fee at the brokerage you're leaving, but that, of course, would be the same whether you are using mutual funds or ETFs.
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Re: Is the portability of ETFs worth much?

Post by ribonucleic »

David Jay wrote: Fri Jan 15, 2021 10:48 am Is this in taxable or in retirement accounts?
Taxable.
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Re: Is the portability of ETFs worth much?

Post by David Jay »

ribonucleic wrote: Fri Jan 15, 2021 10:54 am
David Jay wrote: Fri Jan 15, 2021 10:48 am Is this in taxable or in retirement accounts?
Taxable.
For me, if I was going to hold Vanguard funds at Schwab in a taxable account, I think I would select ETFs for portability.

I much prefer Mutual Funds, so I hold Vanguard mutual funds at Vanguard. If I moved to Schwab, I would hold Schwab mutual funds at Schwab but all my assets are in retirement funds so there is no tax consequence if I swap funds.
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Re: Is the portability of ETFs worth much?

Post by Jack FFR1846 »

You much prefer mutual funds.....why? Because you might not be able to spend the entire $$ amount on an ETF share? That's the only downside. In my taxable accounts, what I do is this....I buy as many shares as my $$ will buy. Then I see what kind of money I have left over and I add enough to buy 1 more share. Then ACH whatever is then left over back to my checking account.

This mainly happens when I have dividends or when I'm taking advantage of a bonus offer to add money or open an account.
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Re: Is the portability of ETFs worth much?

Post by Laundry_Service »

The value of portability was huge for me in 2020 making over $5k from multiple brokerage bonuses.
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ribonucleic
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Re: Is the portability of ETFs worth much?

Post by ribonucleic »

Jack FFR1846 wrote: Fri Jan 15, 2021 11:06 am You much prefer mutual funds.....why?
It feels like the bid/ask spread introduces another element of avoidable risk - especially with munis.
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Re: Is the portability of ETFs worth much?

Post by megabad »

I normally guess that the reduced ER (with respect to Vanguard ETFs vs funds) is about equal to what is lost in bid/ask spread on a liquid ETF. So basically, I don't think it makes a big difference one way or the other. If you are an accumulator or doing DRIP at another brokerage, you probably would want ETF for simplicity, but other than that, I don't see it is bad or good (for portability or otherwise). If you are not an accumulator you can just move everything in-kind (ETFs or funds) so it shouldn't matter.
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Re: Is the portability of ETFs worth much?

Post by increment »

nisiprius wrote: Fri Jan 15, 2021 10:53 am As nearly as I can remember--and it was years ago and all fee schedules have changed--I have never paid a fee for transferring a mutual fund in kind from one brokerage to another. [...]

There may be an account closing fee at the brokerage you're leaving, but that, of course, would be the same whether you are using mutual funds or ETFs.
These days Schwab charges $25 for a "transfer (out) of assets / Partial." Somewhere like Fidelity might reimburse you for that fee, if asked (in advance).
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Re: Is the portability of ETFs worth much?

Post by Pandemic Bangs »

Many threads on this over the years.

For most garden-variety MFs and the major brokerages, they transfer in-kind. Some of the lower volume MFs or ones in a share class unique to the "old" custodian may be "downgraded" to a higher-fee share class on transfer or, worse, must be sold prior to transfer. Like other posters, I have never had an issue with VG MFs even when there were share-class differences. I have always spoken to someone on the receiving end beforehand -- shared a list of what would be coming over so their office could pre-screen for any assets that would not move in kind. I've never had a surprise. I have always bundled this step with my inquiries about transfer bonus.

I like ETFs in taxable and all my new investments are ETFs. Much easier to TLH, imo, and I can do simultaneous BUY and SELL orders at Schwab. I steer clear of niche ETFs and only use high-volume household names to minimize the risk of spread issues on busy market days.
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Re: Is the portability of ETFs worth much?

Post by Shallowpockets »

Bid ask spread on VTI right now is .02.
The ETF is just over $170 share,
That spread represents .01%.
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Re: Is the portability of ETFs worth much?

Post by livesoft »

This bid/ask spread thing is a red herring. Have you ever bought any VTI with a market order? If you do that I think you are going to find that the bid/ask spread is some fictitious bogeyman that Vanguard mutual fund owners have overstressed in order to justify their decision and that it won't really effect your pocketbook.

BTW, if you don't want to be involved with a bid/ask spread you can buy VTI at the market open by submitting an order the night before. Then, just like mutual funds shares at the end of the day, VTI at the opening cross will trade without a spread.
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AZAttorney11
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Re: Is the portability of ETFs worth much?

Post by AZAttorney11 »

Why do some folks fear the bid / ask spread with an ETF, but don't feel the same with mutual funds? Sure, you buy a mutual fund at the closing NAV, but the mutual fund holds underlying securities purchased on the open market, which are still subject to bid / ask spreads.
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Re: Is the portability of ETFs worth much?

Post by nisiprius »

I don't think bid/asked is a problem for "reasonable" ETFs.

However, if you are employed and you work during market hours, the issue of needing to place a trade during work hours is an issue, IMHO. This is particularly true if you can't just do a "fire-and-forget," but need to hang around glancing at the screen to decide when to place the trade--and, if it is not a market order, waiting to see if it executes.

But divergence-from-NAV is a completely separate problem from bid/asked spread, and it is serious enough in some ETFs for Rick Ferri, author of The ETF Book, to have thought it was worth an article: Solving the Bond ETF Discount Problem:
I have been writing about pricing issues with bond ETFs for quite some time...
How did he suggest solving the problem?
This brings us to the two ways to solve the bond ETF discount problem:

1) Don’t buy bond ETFs. Stick with traditional open-ended funds that trade at NAV at the end of the day. You won’t have to worry about ETF price swings due to liquidity issues and other matters.

2) If you do decide to invest in bond ETFs, don’t trade them during volatile days. Wait until prices recover before putting in your order. In the words of someone much wiser than me, this too shall pass.
Finally,
AZAttorney11 wrote: Fri Jan 15, 2021 11:48 am Why do some folks fear the bid / ask spread with an ETF, but don't feel the same with mutual funds? Sure, you buy a mutual fund at the closing NAV, but the mutual fund holds underlying securities purchased on the open market, which are still subject to bid / ask spreads.
I feel sure that mutual fund companies trading billions of dollars are able to get narrower bid/asked spreads on stocks, than I can trading trading ETFs as a retail brokerage client.
Last edited by nisiprius on Fri Jan 15, 2021 12:17 pm, edited 4 times in total.
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Re: Is the portability of ETFs worth much?

Post by aristotelian »

You can usually liquidate (sell) mutual funds at other brokerages without additional fees, so I don't see the problem with mutual funds. That said, I also don't see a problem with bid/ask spreads, at least with a mainstream ETFs where you are talking about less than .01/share. Unless you are trading a lot, I don't see either one moving the needle.
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Re: Is the portability of ETFs worth much?

Post by Shallowpockets »

nisiprius wrote: Fri Jan 15, 2021 11:49 am I don't think bid/asked is a problem for "reasonable" ETFs.

However, if you are employed and you work during market hours, the issue of needing to place a trade during work hours is an issue, IMHO. This is particularly if you can't just do a "fire-and-forget," but need to hang around glancing at the screen to decide when to place the trade--and, if it is not a market order, waiting to see if it executes.

Bid ask spread is too much for some people because it entails a decision. Better to wait for end of day MF prices. That way it is all out of your hands.
Fire and forget could be the way, but all that anxiety is tough.
A bid ask difference could be translated into a day close to day close for MF.. An indecision on that could net you much better or worse than indecision during the day.
This all goes back to timing. A fear of bid ask gets you thinking of timing. End of day MF does not.
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Re: Is the portability of ETFs worth much?

Post by BabaWawa »

:arrow:
ribonucleic wrote: Fri Jan 15, 2021 11:10 am
Jack FFR1846 wrote: Fri Jan 15, 2021 11:06 am You much prefer mutual funds.....why?
It feels like the bid/ask spread introduces another element of avoidable risk - especially with munis.
Bid/ask spreads are negligible for most of ETFs that Bogleheads use like VTI, VXUS, and BND. Being stuck with the closing price at day end for mutual funds may be a disadvatage depending on which way the market is going. For me too many reasons to use ETFs over MFs like trading costs, portability, tax advantages. Portability is likely the biggest one here, particularly if you're tempted by brokerage transfer fees. Proprietary mutual fund products at other brokerages will kill you with transaction fees ranging from $25 to $75. Why be stuck holding at Vanguard particularly with number of posts we see here about poor customer service? I realize many others here disagree, but that's fine.
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Re: Is the portability of ETFs worth much?

Post by livesoft »

nisiprius wrote: Fri Jan 15, 2021 11:49 am I don't think bid/asked is a problem for "reasonable" ETFs. Also, divergence-from-NAV is a completely separate problem from bid/asked spread, and it is serious enough in some ETFs for Rick Ferri, author of The ETF Book, to have thought it was worth an article: Solving the Bond ETF Discount Problem:
I have been writing about pricing issues with bond ETFs for quite some time...
How did he suggest solving the problem?
This brings us to the two ways to solve the bond ETF discount problem:
The bond ETF discount problem is NOT a problem if one is buying bond ETF shares. It is a distinct advantage. Who wouldn't want to buy something at a discount! :twisted:
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Re: Is the portability of ETFs worth much?

Post by whodidntante »

For me, it's worth thousands per year. I'm aware that some mutual funds can be transferred to other brokers, but not always, and I'd rather not take the time to check each time. And to some extent, you have to transfer and see what happens anyway. You can't assume free trading of mutual funds even today.

Mutual funds are also less efficient to run than ETFs and have higher structural costs. Tax-wise, ETFs can shed appreciated shares rather than distributing a capital gain to me. Mutual funds have to trade to invest money or to meet redemptions, but ETFs put those costs on those doing the trading. So one of the things you complained about with ETFs I see as a strength of ETFs. ETFs can also run a razor-thin cash margin due to the structure. I'm not sure the much-touted Vanguard hybrid model is able to fully capture these benefits, though. There can be costs reintroduced by half doing something.
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Re: Is the portability of ETFs worth much?

Post by muffins14 »

It feels irrational to dread the bid-ask spread of an ETF but to be OK with accepting a totally unknown price for your order with a mutual fund, assuming you aren’t making the trade at 3:59 pm

Personally I think the portability could be nice for brokerage transfer bonuses, and because it’s more likely a broker would allow free ETF trades but charge for mutual fund trades.

Also agree that TLH is nicer with ETFs since you can make the trades instantly
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Re: Is the portability of ETFs worth much?

Post by Cycle »

I'm switching new buys in brokerage to etfs. Lower er. I'm just praying for a correction so I can exchange my remaining mutual funds to etfs without a realized gain. Need a 25% correction at this point....

I successfully moved some vanguard mutual funds to boa for a bonus and dividends reinvest without a fee
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Re: Is the portability of ETFs worth much?

Post by MishkaWorries »

When I do market orders with Schwab I get a "price improvement" notice about half the time.

If volatility is the issue, then I guess you could wait until like 5 minutes before market closes.

I prefer mutual funds too. Schwab has good low cost mutual funds too.
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Re: Is the portability of ETFs worth much?

Post by AZAttorney11 »

nisiprius wrote: Fri Jan 15, 2021 11:49 amFinally,
AZAttorney11 wrote: Fri Jan 15, 2021 11:48 am Why do some folks fear the bid / ask spread with an ETF, but don't feel the same with mutual funds? Sure, you buy a mutual fund at the closing NAV, but the mutual fund holds underlying securities purchased on the open market, which are still subject to bid / ask spreads.
I feel sure that mutual fund companies trading billions of dollars are able to get narrower bid/asked spreads on stocks, than I can trading trading ETFs as a retail brokerage client.
Let's assume you're correct about the bid / ask spread issue. I have no idea if you're right or wrong, but it doesn't matter - I'll give you the benefit of the doubt. VTI is still superior to VTSAX in terms of overall cost. Here's an example:

Let's say I can choose between $1,000,000 of VTSAX or $1,000,000 of VTI. The expense ratio for VTSAX is .04%, or $400 per year. Not bad!

Now, let's assume I chose VTI instead. For simplicity sakes, let's assume I purchased at the closing price of $197.06 per share. That's 5,074.596 shares (yes, some brokers, like Fidelity, allow partial share purchases of ETFs). Let's further assume the bid / ask spread is $.01, which it almost always is for a highly liquid ETF like VTI. That's a one-time cost of $50.75 due to bid / ask spread (and that assumes the retail brokerage customer pays the full bid / ask spread and does not receive any price improvement from their broker). The expense ratio for VTI is .03%, or $300 per year. As you know, the expense ratio continues until the security is ultimately sold. Might be a minor sum of money to you, but even if you're worried about the bid / ask spread issue on an ETF, they are still cheaper over the long-run compared to their mutual fund counterpart.
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Re: Is the portability of ETFs worth much?

Post by settingthecourse »

Cycle wrote: Fri Jan 15, 2021 12:25 pm I'm just praying for a correction so I can exchange my remaining mutual funds to etfs without a realized gain.
In case you didn't know, and in case the mutual funds you want to convert are Vanguard funds: Vanguard will convert shares of (some of) their mutual funds to their ETF counterparts (if they exist) without triggering a taxable event. So if you want to go all ETFs you might be able to do so without waiting for a correction.
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Re: Is the portability of ETFs worth much?

Post by vineviz »

muffins14 wrote: Fri Jan 15, 2021 12:18 pm It feels irrational to dread the bid-ask spread of an ETF but to be OK with accepting a totally unknown price for your order with a mutual fund, assuming you aren’t making the trade at 3:59 pm
The other irrational part is that Boglehead mutual fund owners pay more in the bid/ask spreads than Boglehead ETF owners.

That’s because Bogleheads tend to have longer-than-average holding periods. In the mutual funds they’re paying the spread for other people (including frequent traders). With an ETF, they only pay their own.

Imagine going out to dinner with six colleagues and being more willing to pay for THEIR meals (whatever they order) than for your own food.

I mean, the costs are typically small either way with open end funds or ETFs but purely on logical grounds that preference seems unreasonable.
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Re: Is the portability of ETFs worth much?

Post by bling »

Shallowpockets wrote: Fri Jan 15, 2021 11:30 am Bid ask spread on VTI right now is .02.
The ETF is just over $170 share,
That spread represents .01%.
i'd say that's the exception rather than the norm. every time i've traded VTI the spread has been 1 cent. the only time it wasn't was last year during March when the market was going crazy.
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Re: Is the portability of ETFs worth much?

Post by Cycle »

settingthecourse wrote: Fri Jan 15, 2021 6:26 pm
Cycle wrote: Fri Jan 15, 2021 12:25 pm I'm just praying for a correction so I can exchange my remaining mutual funds to etfs without a realized gain.
In case you didn't know, and in case the mutual funds you want to convert are Vanguard funds: Vanguard will convert shares of (some of) their mutual funds to their ETF counterparts (if they exist) without triggering a taxable event. So if you want to go all ETFs you might be able to do so without waiting for a correction.
Thanks. I did not know that a taxable event can be avoided. And both are eligible (vtiax and vtsax)

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Re: Is the portability of ETFs worth much?

Post by dmcmahon »

If the ETFs are highly liquid the bid/ask spread is small and IMO not a worry. My equity portfolio is entirely ETFs and I love them.
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Re: Is the portability of ETFs worth much?

Post by MrJedi »

I have no problem using ETFs, I hold a relatively small amount of ETFs in taxable (<10%) but the rest of my portfolio is in mutual funds at Vanguard. Why? Because my wife has nearly zero interest in managing a portfolio, but I've taught her enough to know how to exchange, buy, and sell MFs. She also knows how to simply exchange the portfolio into VSMGX should I pass unexpectedly. The nuances of bid/ask, market/limit orders, 2 day settling times, market hours, etc. goes over the head of somebody without interest. Even if I teach her now, there's a chance this doesn't get exercised for 20 years before it's needed.
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Re: Is the portability of ETFs worth much?

Post by Pandemic Bangs »

livesoft wrote: Fri Jan 15, 2021 11:41 am If you do that I think you are going to find that the bid/ask spread is some fictitious bogeyman that Vanguard mutual fund owners have overstressed in order to justify their decision and that it won't really effect your pocketbook.
I have lots of evidence to contrary with lower-volume ETFs and that's why I qualified with this:
Pandemic Bangs wrote: Fri Jan 15, 2021 11:24 am I steer clear of niche ETFs and only use high-volume household names to minimize the risk of spread issues on busy market days.
Low-volume ETFs can have wild spreads on your eponymous RBDs. I TLH'ed myself into a few corners during huge multi-day drops like March. I know you will never own them but there are a finite number of low-ER TLH partners for, say, VBR. For one, I was 10% of the day's trading volume. :shock:

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Re: Is the portability of ETFs worth much?

Post by nalor511 »

Pandemic Bangs wrote: Fri Jan 15, 2021 11:24 am Many threads on this over the years.

For most garden-variety MFs and the major brokerages, they transfer in-kind. Some of the lower volume MFs or ones in a share class unique to the "old" custodian may be "downgraded" to a higher-fee share class on transfer or, worse, must be sold prior to transfer. Like other posters, I have never had an issue with VG MFs even when there were share-class differences. I have always spoken to someone on the receiving end beforehand -- shared a list of what would be coming over so their office could pre-screen for any assets that would not move in kind. I've never had a surprise. I have always bundled this step with my inquiries about transfer bonus.

I like ETFs in taxable and all my new investments are ETFs. Much easier to TLH, imo, and I can do simultaneous BUY and SELL orders at Schwab. I steer clear of niche ETFs and only use high-volume household names to minimize the risk of spread issues on busy market days.
How do you do a simultaneous buy/sell (TLH) while factoring in bid/ask spread?
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Re: Is the portability of ETFs worth much?

Post by Pandemic Bangs »

nalor511 wrote: Sat Jan 16, 2021 1:22 am How do you do a simultaneous buy/sell (TLH) while factoring in bid/ask spread?
I'm sure you can do this with other brokerages but I have only been able to do this at Schwab. I can write a single ticket that has the SELL and BUY orders and I can watch the spreads float for a few minutes before I execute. And they execute simultaneously. As @livesoft says, for most ETFs that you will buy with $10 billion in assets, the spread is irrelevant -- like one or two basis points. But for some more niche ones it can be 30. Some here will disagree but I have never encountered a spread surprise on any ETF with assets > $1 billion. I only TLH on very volatile days and try to lock in the biggest loss (making lemonade) so I prefer ETFs to end-of-trading-day MF pricing for that. SCV is the gift that keeps on giving. :oops:
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Re: Is the portability of ETFs worth much?

Post by muffins14 »

nalor511 wrote: Sat Jan 16, 2021 1:22 am
Pandemic Bangs wrote: Fri Jan 15, 2021 11:24 am Many threads on this over the years.

For most garden-variety MFs and the major brokerages, they transfer in-kind. Some of the lower volume MFs or ones in a share class unique to the "old" custodian may be "downgraded" to a higher-fee share class on transfer or, worse, must be sold prior to transfer. Like other posters, I have never had an issue with VG MFs even when there were share-class differences. I have always spoken to someone on the receiving end beforehand -- shared a list of what would be coming over so their office could pre-screen for any assets that would not move in kind. I've never had a surprise. I have always bundled this step with my inquiries about transfer bonus.

I like ETFs in taxable and all my new investments are ETFs. Much easier to TLH, imo, and I can do simultaneous BUY and SELL orders at Schwab. I steer clear of niche ETFs and only use high-volume household names to minimize the risk of spread issues on busy market days.
How do you do a simultaneous buy/sell (TLH) while factoring in bid/ask spread?
You should have enough in your settlement that a few dollars doesn’t matter. Just place two orders
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Re: Is the portability of ETFs worth much?

Post by Pandemic Bangs »

muffins14 wrote: Sat Jan 16, 2021 3:34 am
nalor511 wrote: Sat Jan 16, 2021 1:22 am
Pandemic Bangs wrote: Fri Jan 15, 2021 11:24 am Many threads on this over the years.

For most garden-variety MFs and the major brokerages, they transfer in-kind. Some of the lower volume MFs or ones in a share class unique to the "old" custodian may be "downgraded" to a higher-fee share class on transfer or, worse, must be sold prior to transfer. Like other posters, I have never had an issue with VG MFs even when there were share-class differences. I have always spoken to someone on the receiving end beforehand -- shared a list of what would be coming over so their office could pre-screen for any assets that would not move in kind. I've never had a surprise. I have always bundled this step with my inquiries about transfer bonus.

I like ETFs in taxable and all my new investments are ETFs. Much easier to TLH, imo, and I can do simultaneous BUY and SELL orders at Schwab. I steer clear of niche ETFs and only use high-volume household names to minimize the risk of spread issues on busy market days.
How do you do a simultaneous buy/sell (TLH) while factoring in bid/ask spread?
You should have enough in your settlement that a few dollars doesn’t matter. Just place two orders
I often "need" to TLH 5% of my net worth so the loose change idea won't cut it for me. This is a product of realigning my asset allocation a few years ago so there are fewer but much larger pieces. And it's very easy and satisfying to make all the red disappear on or after a RBD!
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Re: Is the portability of ETFs worth much?

Post by livesoft »

Pandemic Bangs wrote: Sat Jan 16, 2021 11:25 amAnd it's very easy and satisfying to make all the red disappear on or after a RBD!
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Re: Is the portability of ETFs worth much?

Post by bling »

Pandemic Bangs wrote: Sat Jan 16, 2021 11:25 am I often "need" to TLH 5% of my net worth so the loose change idea won't cut it for me. This is a product of realigning my asset allocation a few years ago so there are fewer but much larger pieces. And it's very easy and satisfying to make all the red disappear on or after a RBD!
yep, this happened to me too last year during the crash. i had a ton of small lots that i bought over many months/years and all of them got sold and now i have one huge lot for the position. unfortunately for me, i have a IBKR pro account, so i'm actually paying for commissions and i'm starting to think twice about how often i TLH. i'm hoping that their claim to fame of having really good execution offsets this, but of course there's no way for me to really know how much better/worse it is when i'm always sending market orders.
livesoft
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Re: Is the portability of ETFs worth much?

Post by livesoft »

bling wrote: Sat Jan 16, 2021 11:48 am... and now i have one huge lot for the position.
My experience with TLHing on RBDs in a big down market is that I bought at the lowest price possible for the last soon to be 12 years. That is, my huge lots date from 2009 and those shares have never traded at a lower price and now have huge gains. They didn't even come close to having losses in March 2020.

May your March 2020 shares never trade at a lower price ever again!
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Silence Dogood
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Re: Is the portability of ETFs worth much?

Post by Silence Dogood »

ribonucleic wrote: Fri Jan 15, 2021 10:45 am I prefer mutual funds over ETFs. And I prefer Vanguard funds over those of its competitors.

...

What I’m asking is: Would it be worth accepting what I dislike about ETFs - chiefly the bid/ask spread - for the peace of mind of knowing that I can always pick up and move them to another commission-free brokerage? Or would it be signing on for a certain annoyance every quarter (assuming that frequent a rebalancing) to protect against a potential annoyance that would only come up after possibly 5 to 10 years?
If you prefer mutual funds, why not just wait to switch to ETFs if/when you decide to transfer to another brokerage?
David Jay wrote: Fri Jan 15, 2021 10:58 am For me, if I was going to hold Vanguard funds at Schwab in a taxable account, I think I would select ETFs for portability.

I much prefer Mutual Funds, so I hold Vanguard mutual funds at Vanguard. If I moved to Schwab, I would hold Schwab mutual funds at Schwab but all my assets are in retirement funds so there is no tax consequence if I swap funds.
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David Jay
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Re: Is the portability of ETFs worth much?

Post by David Jay »

Silence Dogood wrote: Sat Jan 16, 2021 1:20 pmIf you prefer mutual funds, why not just wait to switch to ETFs if/when you decide to transfer to another brokerage?
I believe that “conversion” without tax implications is only available for Vanguard mutual funds held by Vanguard brokerage. This is unique to Vanguard because Vanguard ETFs are a share class of the mutual fund.

The OP is asking about holding the assets at Schwab.
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Re: Is the portability of ETFs worth much?

Post by criticalmass »

It is worth the bonus for signing up a new brokerage account when moving your ETF or maintaining one based on asset size status. (See also Bank of America's Travel Rewards card for 2.625%+ cashback).
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Re: Is the portability of ETFs worth much?

Post by bding »

I would choose Schwab and ETF's over Vanguard and mutual funds every time!!! Schwab is cheaper and ETF's are more efficient.
Silence Dogood
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Re: Is the portability of ETFs worth much?

Post by Silence Dogood »

David Jay wrote: Sat Jan 16, 2021 1:43 pm
Silence Dogood wrote: Sat Jan 16, 2021 1:20 pmIf you prefer mutual funds, why not just wait to switch to ETFs if/when you decide to transfer to another brokerage?
I believe that “conversion” without tax implications is only available for Vanguard mutual funds held by Vanguard brokerage. This is unique to Vanguard because Vanguard ETFs are a share class of the mutual fund.

The OP is asking about holding the assets at Schwab.
Right - what I meant is, should the OP decide (in the future) to transfer to Schwab, why not just switch to ETFs (at Vanguard) then, just prior to making the transfer (considering that the OP prefers mutual funds)?

But re-reading the OP, I now see that the OP is considering buying/holding the mutual funds at Schwab in the first place. The idea of doing that didn't even occur to me.

I agree with what you wrote here:
David Jay wrote: Fri Jan 15, 2021 10:58 am For me, if I was going to hold Vanguard funds at Schwab in a taxable account, I think I would select ETFs for portability.

I much prefer Mutual Funds, so I hold Vanguard mutual funds at Vanguard. If I moved to Schwab, I would hold Schwab mutual funds at Schwab...
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