September 25, 2017: Fees In Cash Investments
by MyPlanIQ | Sep 26, 2017 | Asset-Allocation, Bonds, Economy, Feature, Gold, Headline, Income, Inv, Investments, IRA, Markets, Mutual-Funds, newsletter, Portfolios, Retirement |
Re-balance Cycle Reminder All MyPlanIQ’s newsletters are archived here.
For regular SAA and TAA portfolios, the next re-balance will be on Monday, October 9, 2017. You can also find the re-balance calendar for 2017 on ‘Dashboard‘ page once you log in.
As a reminder to expert users: advanced portfolios are still re-balanced based on their original re-balance schedules and they are not the same as those used in Strategic and Tactical Asset Allocation (SAA and TAA) portfolios of a plan.
Please note that we now list the next re-balance date on every portfolio page.
Fees In Cash Investments
Expenses/fees in mutual funds have come down a lot since John Bogle, the founder of Vanguard Company, first introduced index funds and started the low cost investment crusade in 1970s. The 0.03% expense recently instigated in Schwab S&P 500 index fund (SWPPX) signifies how much fees in mutual funds have come down. Marketing plots or not, investors now can expect to spend 0.1% or so in many stock and bond index funds.
However, fees in cash investments or ultra short term cash like investments or savings are still extremely high. They often go unnoticed. To illustrate:
Expenses in money market funds
| Funds | Annual Expense | Minimum | 7-Day Yield |
|---|
| SWPPX (Schwab S&P 500 Index) | 0.03% | | |
| VFINX (Vanguard 500 Index Investor) | 0.14% | | |
| Vanguard total bond market index fund (VBMFX) | 0.15% | | |
| Schwab Treasury Money Market Fund | 0.65%/0.77%* | $25,000 | 0.7% |
| Schwab Value Advantage Money Market Fund | 0.45%/0.58% | $25,000 | 0.9% |
| Fidelity Treasury Money Market Fund | 0.42% | 0 | 0.65% |
| Vanguard Treasury Money Market Fund (VMFXX) | 0.11% | $3,000 | 0.98% |
*: net expense ratio/gross expense ratio (net expense ratio represents fund management’s voluntary fee waiver that might go away anytime)
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