TD Ameritrade ETF Changes

[62cutlass]

It appears that TD Ameritrade is removing Vanguard and iShares funds from their no trade fee etfs starting November 21.

Does this change anyone’s HSA Bank plans? What remaining funds appear useful?

[Zaphod]

62cutlass wrote:

It appears that TD Ameritrade is removing Vanguard and iShares funds from their no trade fee etfs starting November 21.

Does this change anyone’s HSA Bank plans? What remaining funds appear useful?

Click to expand...

Yes, people are fired up about this change. They are changing to state street which have several ER funds in the 0.03 range but given they are removing over a hundred funds, outside of the basics its apparently pretty limiting.

I dont see why this would affect an HSA, they have total market, international and all the basics for very cheap. Really anything under 0.2 is totally reasonable.

[jfoxcpacfp]

We've been told that the lineup removes 84 funds from the list but adds 280 new funds including additional iShares funds. We're going to have to develop a new ETF portfolio ourselves, not a huge deal but a bit of a PITA.

[DrMoneyTails]

When I got the email from TDA, I got really bummed out - I just opened my HSA with HSA Bank using TDA and was buying exclusively VTI.

I like to keep things simple and change makes me nervous, since I have only recently started investing and getting my financial house in order.

From what I have seen from the new commision-free ETF program, it seems like the one that most closely resembles VTI is SPTM with an expense ratio of 0.1%.

I'm curious to see if others will switch from buying VTI in their HSA to buying SPTM or if people will ditch TDA all together.

[The White Coat Investor]

Yup, it blows. But it's also only $6.95 a year for what I'm doing now. It's not like you can't buy Vanguard ETFs, you just have to pay a commission to do so.

That commission is likely smaller than the bid-ask spread for many trades on these thinly-traded ETFs.

I bet you can score a few free trades too if you call and complain. At the rate I'm currently using them, 20 or 30 free trades could last me decades.

[Ricky]

If I understand correctly, then I can keep what I have, currently all Vanguard FTSE All-World ex-US Small-Cap (VSS), but once I sell, I'll have to pay the commission.  Or, I can trade into their new funds for free by November 20th.

Man, I really liked simplicity before, everything I had was Vanguard funds...now I have to make some decisions all for the 50K that's in my HSA...

[Ricky]

Any recommendations for low fees from the funds on the list?  Or is there a website, morningstar?, that has similar funds from different companies that I can check out?

I currently do about 5 trades a year, basically buying the same fund every time as the distributions are paid into my money market account there, and one big one in January when the HSA money hits.  Debating between switching what I have in my HSA for something in my taxable or 401k, or just keeping it as is and doing one purchase a year with all the dividends and new HSA money each January and paying the $7 commission.

[VagabondMD]

No reason for the uproar. No one is going to the poorhouse because of this change. This is a good reminder that just because there is a program in place does not mean that it will be in place indefinitely. In fact, if something seems like an especially good deal, and you cannot figure out how they are making money on it, be prepared it to change.

Ricky wrote:

Any recommendations for low fees from the funds on the list?

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Can someone link the list? I have been using the ishares core funds, and they are extremely liquid and extremely competitive priced (and trade free at Fidelity).

[19thHole]

SPTM appears to be a viable option for those who were invested in VTI previously. The expense ratio for SPTM decreased from 0.1% to 0.03% on 10/16/17.

http://www.etf.com/sections/features-and-news/state-street-debuts-low-cost-etfs

 

Other SPDR products and expense ratios can be found here (at least some are part of the new commission free list, but I didn't analyze that very carefully so look closely yourself).  Upon brief inspection, the ER are very comparable to Vanguard funds.

https://us.spdrs.com/product/

 

 

[19thHole]

The new commission free ETF list

https://www.tdameritrade.com/retail-en_us/resources/pdf/TDA1000835.pdf

[s2km]

are these new ETFs really similar - like you can just plug and exchange and assume similar performance to whatever corresponding vanguard ETFs since they are supposedly tracking the same indices?   they are trading at smaller volumes, but ERs are still low.

[Eagleeyes]

Quick question. My 401k plan is administered through American funds. Its one redeeming quality it had self directed brokerage window through TDA.

So I have a bunch of VTI (vanguard total stock index). Even if don't buy anymore the dividends would get reinvested into he funds, correct? And if that happens 4x a year that's 4 commissions. Maybe I'll have to just move money to TDA once every 3 to 6 months to save on monthly commissions fees. Or is that penny wise and pound foolish?

[The White Coat Investor]

I don't know if reinvested dividends count. You don't have to reinvest the dividends either.

[emp2b3]

I was already planning on moving from TDA to Vanguard at some point because backdoor Roth IRA contributions are slightly easier (not that they are difficult with TDA, but they do require a faxed or mailed form instead of a click of a button).

If you have Apex status (>100k or 5 trades per month) there is no $75 fee to transfer out the funds. They extended my status to a Roth account that did not meet criteria just by my asking.

Obviously the $7 per trade is not a big deal, but I like to keep things very simple so prefer not to switch to new funds at this time.

[lucas]

This isn't an earth shaker, but pretty friggin annoying.  I opened our HSA 1.5 yrs ago through HSA bank specifically to buy these funds (VWO, VNQ, VBR) for our portfolio. Now I have to shuffle the cards around and find another fund or funds to add to our portfolio.  Anyone know of other good HSA choices (besides HSA bank) that allow free or overall lower cost trading in Vanguard funds?

I just did my part and called TD Ameritrade to complain; they didn't give me any free trades, just a "duly noted".   :x

Maybe more can call in and raise a little ruckus?  Can't hurt and might help the cause.