No. of Recommendations: 2
>S&P 500 Index Fund - 55% ($8,030 contribution)
>Small Cap Index Fund - 30% ($4,380 contribution)
>REIT Index Fund - 15% ($2,190 contribution)

>The problem is that under Vanguard's fee structure, both the Small Cap
>Index Fund and the REIT Index fund would be charged a $10/year
>maintenance fee

There's no point in owning 2 funds, one S&P and 1 Small Cap, when you can simply buy the Total Stock Market Index fund, pushing the investment size over $10,000 and avoiding those fees.

>That's $50/year PLUS higher expense ratios.

Expense ratios are only one type of fund cost. Other fees, such as trading commissions paid, are not reflected in the ER.

In your case, for example, while the SSGA S&P 500 fund has a lower ER than Vanguard's S&P fund, Vanguard has outperformed it over 1,3,5, and 10 year periods.

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