UnThreaded | Threaded | Whole Thread (11) | Ignore Thread Prev Thread | Next Thread
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: of 76398  
Subject: Schwab the new Vanguard? Date: 4/21/2012 1:34 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Some Schwab ETFs have lower expense ratios than Vanguard.

http://www.marketriders.com/blog/2012/04/20/schwab-could-be-...

But here’s the clincher: Schwab is pricing several of its domestic-stock ETFs lower than Vanguard.

</snip>


intercst
Print the post Back To Top
Author: AndrewXnn Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 70570 of 76398
Subject: Re: Schwab the new Vanguard? Date: 4/21/2012 3:29 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 4
Ahh, but there's much more to ETFs than expense ratio, such as the cost of trading. Because SCHB is less liquid than VTI, the trading costs will be higher.

SCHB Bid/Ask 33.39/33.51 => 3.4%
VTI Bid/Ask 69.92/70.82 => 1.71%

Also, they don't own the same stocks, so the yields don't line up:

SCHB SEC Yield = 1.77%
VTI SEC Yield = 1.90%

Print the post Back To Top
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: 70571 of 76398
Subject: Re: Schwab the new Vanguard? Date: 4/21/2012 7:33 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 1
AndrewXnn writes,

Ahh, but there's much more to ETFs than expense ratio, such as the cost of trading....

I agree. That's why I was surprised to learn that VTI's portfolio turnover at 5% was almost double SCHB's 3%. And you pay for that added portfolio turnover each and every year, while the bid/asked spread is a one-time hit.

intercst

Print the post Back To Top
Author: Watty56 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 70573 of 76398
Subject: Re: Schwab the new Vanguard? Date: 4/22/2012 1:13 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Some of the Fidelity Spartan index funds have lower costs than the corresponding Vanguard funds.

The catch is that you don't know what they will cost ten years from now since they can change the fees at any time.


I suspect that that could be an issue with these RTF's too if you read through the fine print.

Print the post Back To Top
Author: 0x6a74 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: 70574 of 76398
Subject: Re: Schwab the new Vanguard? Date: 4/22/2012 1:32 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
The catch is that you don't know what they will cost ten years from now since they can change the fees at any time.



isn't that true of any Fund or ETF?

and can't brokers change commissions pretty much at whim?

Print the post Back To Top
Author: WPatch Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 70575 of 76398
Subject: Re: Schwab the new Vanguard? Date: 4/22/2012 10:23 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
"Ahh, but there's much more to ETFs than expense ratio, such as the cost of trading. Because SCHB is less liquid than VTI, the trading costs will be higher.

SCHB Bid/Ask 33.39/33.51 => 3.4%
VTI Bid/Ask 69.92/70.82 => 1.71%"

If you would take the simple action of trading during the
NYSE's trading hours, 9:30-4:00 EST, you will find that
the bid/ask spread for both of these highly liquid etfs
are much lower, typically a penny. Slightly wider spreads
may be obtained from 4 to 4:30, etf's have "extended
regular hours" after the main markets close. The worst
spreads such as the two you quote are in the "after-hours
market". QQQ, SPY, and IVV trade heavily enough after-hours
to maintain tight spreads.Still I recommend against off-hours
trades.

Print the post Back To Top
Author: ziggy29 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: 70576 of 76398
Subject: Re: Schwab the new Vanguard? Date: 4/23/2012 9:13 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 1
>> The catch is that you don't know what they will cost ten years from now since they can change the fees at any time. <<

True, but since Schwab isn't charging Schwab customers any trading commission on their in-house ETFs and because changes to these funds and their fee structure are generally communicated in advance, one can easily (and with no cost) move their money if they don't like the new terms. It's not like this is an annuity with an 8% surrender charge...

#29

Print the post Back To Top
Author: WPatch Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 70577 of 76398
Subject: Re: Schwab the new Vanguard? Date: 4/23/2012 1:17 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
SCHB bid/asked 32.84 32.87 12:50pm .0914% spread
VTI bid/asked 69.98 69.99 12:50pm .01429% spread
As reported in my last post market spreads for these
etfs are much smaller during market hours than
those reported by AndrewCM
My recollection of SCHB spreads may have been
slightly low now seems to average a 2 penny spread
Still 6 or 9 basis points much lower than 341 bp
reported by Andrew

Print the post Back To Top
Author: WPatch Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 70583 of 76398
Subject: Re: Schwab the new Vanguard? Date: 4/23/2012 6:08 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 2
AndrewXnn reported earlier

"Ahh, but there's much more to ETFs than expense ratio, such as the cost of trading. Because SCHB is less liquid than VTI, the trading costs will be higher.

SCHB Bid/Ask 33.39/33.51 => 3.4%
VTI Bid/Ask 69.92/70.82 => 1.71%

...."

In my first reply to this I reported that this was an
afterhours quote and that these etfs trade with much
smaller spreads while the major US exchanges are open.
I also noted that etfs trade in a special "regular"
session from 4 to 4:30, with wider spreads. After 4:30
is the regular afterhours session.

Sample quotes from today's trading

12:50 pm All Exchanges open

SCHB bid/ask 32.84 32.87 spread 0.0913 %
VTI bid/ask 69.98 69.99 spread 0.0143 %

Much less costly than the spreads reported by Andrew

4:08 pm NYSE closed
SCHB bid/ask 32.76 33.93 spread 3.57%
VTI bid/ask 70.21 70.23 spread 0.0285%

Not a liquid market for SCHB
The next time I trade after 4PM VTI a candidate

5:03 pm Afterhours
SCHB bid/ask 32.76 33.94 spread 3.60%
VTI bid/ask 70.13 70.94 spread 1.16%
These Afterhours spreads are similar to Andrew's results.

My apoligies for misspelling AndrewXnn's moniker in
the previous post.

Print the post Back To Top
Author: AndrewXnn Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 70586 of 76398
Subject: Re: Schwab the new Vanguard? Date: 4/24/2012 4:15 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Good points WPatch!


Need to be careful about the time of day
when talking or trading ETF's.


Thanks

Print the post Back To Top
Author: feedmeNOWhuman Big funky green star, 20000 posts Top Recommended Fools Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 70603 of 76398
Subject: Re: Schwab the new Vanguard? Date: 4/27/2012 12:05 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 2
Schwab will never be Vanguard, because Vanguard hasn't been fined $119 million for fraud.


http://www.sec.gov/news/press/2011/2011-7.htm


CSIM and CS&Co. agreed to pay a total of $118,944,996, including $52,327,149 in disgorgement of fees by CSIM, a $52,327,149 penalty against CSIM, a $5 million penalty against CS&Co., and pre-judgment interest of $9,290,698.

In its order, the Commission found that:

CSIM and CS&Co. willfully violated anti-fraud provisions of the Securities Act of 1933, Sections 17(a)(2) and (3).

CSIM willfully violated anti-fraud provisions of the Investment Advisers Act of 1940, Section 206(4) and Rule 206(4)-8.

Schwab Investments willfully violated Section 13(a) of the Investment Company Act of 1940 by deviating from its concentration policy, and CSIM willfully aided and abetted and caused the violation.

CSIM and CS&Co. willfully aided and abetted and caused violations of the false filings provision of the Investment Company Act, Section 34(b).

CS&Co. violated Section 15(g) (formerly Section 15(f)) of the Securities Exchange Act of 1934, and CSIM violated Section 204A of the Advisers Act, both of which require policies and procedures that are reasonably designed, taking into consideration the nature of the entities' businesses, to prevent the misuse of material, nonpublic information.


Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post Back To Top
UnThreaded | Threaded | Whole Thread (11) | Ignore Thread Prev Thread | Next Thread
Advertisement