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Author: Zee64 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76420  
Subject: Merrill Lynch/Index Funds Date: 3/10/1999 1:27 AM
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My husband is just opening a rollover 401K with Merrill Lynch (His new job has a sep retirement program there, which he is also opening). We want to put some of the rollover into an index fund, but looking at their online page (can you say useless?) I can't find out which of the fund families they offer has a S&P 500 index fund. Does anyone have any experience with this? They list Fidelity, do they have an index fund? Is it a good one, or does Merrill Lynch offer any one that would be recommended. The broker said they offer Janus funds, though that is not on Merrill's online list. Are there other funds not on the online list that they carry?

Thanks for your help,

zee64
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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9027 of 76420
Subject: Re: Merrill Lynch/Index Funds Date: 3/10/1999 9:47 AM
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Greetings, Zee64, and welcome. You wrote:

<<My husband is just opening a rollover 401K with Merrill Lynch (His new job has a sep retirement program there, which he is also opening). We want to put some of the rollover into an index fund, but looking at their online page (can you say useless?) I can't find out which of the fund families they offer has a S&P 500 index fund. Does anyone have any experience with this? They list Fidelity, do they have an index fund? Is it a good one, or does Merrill Lynch offer any one that would be recommended. The broker said they offer Janus funds, though that is not on Merrill's online list. Are there other funds not on the online list that they carry?>>

M/L has an S&P 500 Index Fund by that name. I don't recall what Fidelity calls their index fund, but I'm certain they have one. I'm also certain, though, that if you call the M/L broker, he can tell you what's available so you can do some comparisons.

Regards….Pixy


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Author: Zee64 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9031 of 76420
Subject: Re: Merrill Lynch/Index Funds Date: 3/10/1999 1:20 PM
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M/L has an S&P 500 Index Fund by that name. I don't recall what Fidelity calls their index fund, but I'm certain they have
one. I'm also certain, though, that if you call the M/L broker, he can tell you what's available so you can do some
comparisons.

Regards….Pixy

Well, I've asked them once to send me some info on what they have available, and got nothing. Yesteday on the phone when I mentioned putting half the money in an index fund, and the rest in stocks, he seemed to gasp, and said it was unwise, and that we should consider other funds to diversify, and then that we'd talk next week after the money was deposited. I just wanted to be prepared. We've never dealt with a broker before.

Is the Merrill Lynch S&P any good? Is the Fidelity better? If someone else is dealing with Merrill, do you have any other recommendations?

Thanks,
=-= Zee64

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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9035 of 76420
Subject: Re: Merrill Lynch/Index Funds Date: 3/10/1999 4:43 PM
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Zee64 asks:

<<Is the Merrill Lynch S&P any good? Is the Fidelity better? If someone else is dealing with Merrill, do you have any other recommendations? >>

I don't invest in funds, so I sure have no recommendations for you. However, funds are discussed in detail on the Mutual Funds board over in the Investor's Roundtable folder. You may want to ask your question over there. Here's the link in case you do: http://boards.fool.com/registered/messages.asp?id=1030021000000000

Regards....Pixy

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Author: intercst Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9040 of 76420
Subject: Re: Merrill Lynch/Index Funds Date: 3/10/1999 8:39 PM
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Zee64 wrote,

<<Well, I've asked them once to send me some info on what they have available, and got
nothing. Yesteday on the phone when I mentioned putting half the money in an index fund,
and the rest in stocks, he seemed to gasp, and said it was unwise, and that we should
consider other funds to diversify, and then that we'd talk next week after the money was
deposited. I just wanted to be prepared. We've never dealt with a broker before.

Is the Merrill Lynch S&P any good? Is the Fidelity better? If someone else is dealing with
Merrill, do you have any other recommendations? >>

Zee64,

The Merrill-Lynch S&P 500 Index Fund has an expense ratio of 0.40%, Vanguard's S&P500 Index fund has a 0.17% expense ratio. I believe Fidelity's Index Fund has an expense ratio close to Vanguard's.

Your broker probably gasped because the index fund means less money for him. He'd love to sell you something with a big front end load and a 2.00% annual expense ratio.

Even small differences in expense ratios really add up. For someone putting $2,000 per year in an IRA for 40 years and getting a 10% return before investment expenses, the difference between a 0.50% expense ratio and a 0.25% expense ratio is about $50,000 in your IRA balance at the end of 40 years.

If you really want to be prepared for your next meeting with your broker, print out the info on fees and expenses at the link below. Ask your broker to explain how you will be better off with the smaller retirement nestegg that will result from the higher fees he wants to charge you.

http://www.geocities.com/WallStreet/8257/advise.html

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Author: zgriner Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9041 of 76420
Subject: Re: Merrill Lynch/Index Funds Date: 3/10/1999 9:05 PM
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My husband is just opening a rollover 401K with Merrill Lynch...We want to put some of the rollover into an index fund...

To add what the other posters said, might I suggest that if you are going to keep part of your money in an S&P500 index fund, that you bypass ML altogether and invest it directly in the particular fund. This way, you will save yourself being hassled by your broker about your choice of an index fund. BTW, an S&P500 index fund is considered a diversified large-cap growth and income fund. Fidelity, Vanguard, etc. will be quite happy to open a rollover IRA for you and invest your money in an index fund without taking an upfront commission.

If you ever want to invest that money in stocks, in the future, ML will be happy to transfer it out of your fund for you. The downside is that it will take a week or so to happen, instead of overnight if you had invested through ML.

Zev

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Author: rustedSoul Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9042 of 76420
Subject: Re: Merrill Lynch/Index Funds Date: 3/10/1999 9:16 PM
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If you really want to be prepared for your next meeting with your broker, print out the info on fees
and expenses at the link below. Ask your broker to explain how you will be better off with the
smaller retirement nestegg that will result from the higher fees he wants to charge you.


Don't even waste your time working with the ML broker. It's not worth it. Spend your time learning how to buy index fund/stocks yourself.

rustedSoul

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Author: rjm1 Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9043 of 76420
Subject: Re: Merrill Lynch/Index Funds Date: 3/10/1999 9:45 PM
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My husband is just opening a rollover 401K with
Merrill Lynch (His new job has a sep retirement
program there, which he is also opening). We want
to put some of the rollover into an index fund, but
looking at their online page (can you say useless?) I
can't find out which of the fund families they offer
has a S&P 500 index fund. Does anyone have any
experience with this? They list Fidelity, do they
have an index fund? Is it a good one, or does
Merrill Lynch offer any one that would be
recommended. The broker said they offer Janus
funds, though that is not on Merrill's online list. Are
there other funds not on the online list that they
carry?


Why are you opening an account at Merrill?

Think about the answer. If you just do not know what you want to do it maybe worth it. The firm is good. But expensive.

If you know what you want to do, the index fund for one, go to a no load mutual fund and get one. The fund will help you transfer the money and set up the account. The performance of the same type of index fund should be similar between firms before they take their fees. Therfore go with a large mutual fund family with a low expense ratio. Not ML for this money.

I use ML but only for bonds. Stock and mutual funds are through discount brokers.

Don't panick. You can leave your money in a ML money market account until you make up your mind. Maybe tell the broker you think some diversification is a good idea and you will be using two or three investment sources.

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Author: Zee64 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9047 of 76420
Subject: Re: Merrill Lynch/Index Funds Date: 3/10/1999 9:57 PM
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>Why are you opening an account at Merrill?

>Think about the answer. If you just do not know what you want to do it maybe worth it. The firm is good. But expensive.

> If you know what you want to do, the index fund for one, go to a no load mutual fund and get one. The fund will help you
transfer the money and set up the account. The performance of the same type of index fund should be similar between firms
before they take their fees. Therfore go with a large mutual fund family with a low expense ratio. Not ML for this money.>


Thank you guys for your replies so far. Again, the reason for going with Merrill is because we are new at this, and Merrill is the company that is handling my husband's new job's sep account. When I get my rollover from a job I just left, it's going to go to a discount broker account for stock purchases. But my husband is more comfortable with this now, and we'll probably move out of Merrill at a later date when we know a lot more, (or he finally gets ticked off enough.)

Thanks for your help,

Zee64

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Author: TMFMax Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9067 of 76420
Subject: Re: Merrill Lynch/Index Funds Date: 3/11/1999 12:28 PM
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<<My husband is just opening a rollover 401K with Merrill Lynch (His new job
has a sep retirement program there, which he is also opening). We want to put
some of the rollover into an index fund, but looking at their online page (can you
say useless?) I can't find out which of the fund families they offer has a S&P 500
index fund. Does anyone have any experience with this? They list Fidelity, do
they have an index fund? Is it a good one, or does Merrill Lynch offer any one
that would be recommended. The broker said they offer Janus funds, though that
is not on Merrill's online list. Are there other funds not on the online list that they
carry?>>

If at all possible, can he open this account somewhere else? Merrill has terrible index funds, which not only have higher expense ratios than other index funds, but also carry a 5% load I believe. Merrill makes something of an effort to discourage its clients using index funds, because it cuts into the level of fees that they prefer charging.

Merrill's funds are generally considered the worst in the business. In a recent Barron's ranking, Merrill's funds were rated 55th out of 55 over the last five years.

If your husband is rolling the money from a 401k to an IRA, he can literally do better by rolling it over to almost anywhere else.

Bill

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