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Author: lcorbin Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75383  
Subject: Roth Decision Date: 12/9/1998 9:40 AM
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I want to invest in a Roth IRA with Vanguard. My choices are Vanguard Growth Index Fund with an expense ration of .20% and an account maintenance fee of $10 annually, Vanguard Institutional Index Fund Plus Shares with an expense ration of .03% with no maintenance fees, Vanguard Instutional Index Fund with an expense ration of .06% with no maintenance fees or their Vanguard 500 Index Fund with an expense ration of .19% and an account maintenance fee of $10 annually. Which would be the best? What should the guidlines be for picking an index fund? What sets apart on company's 500 index fund from anothers?

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Author: spearmint5 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 7119 of 75383
Subject: Re: Roth Decision Date: 12/9/1998 11:49 AM
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Vanguard's Institutional Index funds are only
open to you if you're investing ten million
dollars or more.

The ten dollar maintenance fee applies only
to accounts less then $10,000, which hopefully
won't be but for a few years if you keep
up the $2000 annual contributions. Vanguard
also charges another ten dollars in IRA maintenence
fees when the balance is less than $5000. Again,
that shouldn't be for too long.

The Growth Index fund consists of those companies
in the S&P 500 which pay the lowest dividend
yields. There's a counterpart, the Value Index
fund, which combined with the Growth Index fund,
would put you right back at owning the Index 500.

The Growth Index fund has done a little better
than the overall 500 fund, but it's anybody's
guess whether that will continue. I use the
whole 500, but it's probably not a crucial decision
either way.

To answer your broad question, the main thing
that separates 500 index funds is the expense
ratio. You can't go wrong with Vanguard in
this regard.



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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: 7132 of 75383
Subject: Re: Roth Decision Date: 12/9/1998 2:02 PM
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Greetings, Icorbin, and welcome. You asked:

<<I want to invest in a Roth IRA with Vanguard. My choices are Vanguard Growth Index Fund with an expense ration of .20% and an account maintenance fee of $10 annually, Vanguard Institutional Index Fund Plus Shares with an expense ration of .03% with no maintenance fees, Vanguard Instutional Index Fund with an expense ration of .06% with no maintenance fees or their Vanguard 500 Index Fund with an expense ration of .19% and an account maintenance fee of $10 annually. Which would be the best? What should the guidlines be for picking an index fund? What sets apart on company's 500 index fund from anothers?>>

Around Fooldom, we believe the Vanguard 500 stands head and shoulders above all other index funds based on it's 25+ years of historical performance. As to the differences between 500 index funds, look at the expense ratios. Return differences between them are attributable to the costs of operation and how much cash the fund manager keeps on hand for redemptions. The less fully invested they are, the lower the return.

Regards….Pixy


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