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Author: kaudrey Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75540  
Subject: Emerging Mkts Fund - should I switch to ETF? Date: 3/15/2006 10:41 AM
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Hi,

I have about 3% of my portfolio in T Rowe Price's Emerging Market Stock Fund (PRMSX). It is in an IRA. I want to up my allocation to emerging markets to 5%, and I have the cash to do that, but then I was thinking that I should put the entire 5% in an Emerging Markets ETF instead.

PRMSX has an expense ratio of 1.27%, and with Schwab I pay a small commission on it when I trade.

I didn't originally go the ETF route because I thought I'd buy in small increments, but now I believe I'll just buy a bunch and then rebalance once a year.

So, do you think I should sell PRMSX and buy an ETF instead?

My choices seem to be: Vanguard Emerging Market VIPERS, iSHAREs MSCI Emerging Market Index, and BLDRS Emerging Mkt 50 ADR Index.

Thanks,
Karen
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Author: JLC Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 50519 of 75540
Subject: Re: Emerging Mkts Fund - should I switch to ETF? Date: 3/15/2006 11:37 AM
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I have been buying iShares Emerging Market for over a year. When I originally ran the calculations, as long as you were buying more than $2000 at a time, it was more cost effective than a mutual fund.

JLC

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Author: DeltaOne81 Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 50520 of 75540
Subject: Re: Emerging Mkts Fund - should I switch to ETF? Date: 3/15/2006 11:58 AM
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Yup, the key is to calculate your total expenses.

Expense ratio plus commissions, and see which way you would spend more. Since these are indexes, its an easy comparison.

You could also consider setting up an account with Vanguard - or at least direct with someone with lower costs - and see if that is even more cost effective.

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Author: DrTarr Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 50526 of 75540
Subject: Re: Emerging Mkts Fund - should I switch to ETF? Date: 3/15/2006 9:51 PM
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While I am one who beleives that in emerging markets an actively managed fund could be better, I will admit you still have to have some means for picking a winner - luck or skill.

PRMSX v EEM???
http://finance.yahoo.com/q/bc?s=PRMSX&t=5y&l=on&z=m&q=l&c=eem



Total Expense 1.27% v. .77% seems to be the only real difference. And a tie goes to the ETF.

DrTarr

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Author: sunrayman Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 50528 of 75540
Subject: Re: Emerging Mkts Fund - should I switch to ETF? Date: 3/15/2006 11:24 PM
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Are you sure?

http://finance.yahoo.com/q/bc?t=5y&s=PRMSX&l=on&z=m&q=l&c=eem%2C+fismx%2C+flatx


{Yes, I know FISMX is closed to new investors but its [new] clone, FSCOX, has a rather short history.}

http://finance.yahoo.com/q/bc?t=5y&s=FISMX&l=on&z=m&q=l&c=fscox


sunray
Fido fan



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Author: kaudrey Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 50561 of 75540
Subject: Re: Emerging Mkts Fund - should I switch to ETF? Date: 3/17/2006 8:48 AM
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Thanks everyone. I appreciate your help. The charts are useful too, and give me more to think about. Maybe instead of selling what I already have, I'll just invest the new money in ETFs. Then I'll have some of both.

I can evaluate in a year if the managed fund is worth holding onto - I have a 22 year time horizon (assuming I don't touch the IRA until 59 1/2, although I'll probably let it sit even longer), so I can give it a year or two to prove itself to me.



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