Key Post Various questions on low cost index funds

Discussion in 'Exchange Traded Funds (ETFs)' started by KeyPoster, Nov 30, 2009.

  1. nasher

    nasher Registered User

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    Re: How do I buy the Vanguard Index 500 Investor VFINX (total Stock Index)?

    All market etf from vanguard the ticker is vti.
     
  2. KeyPoster

    KeyPoster Registered User

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    Cheapest on line execution Discount Brokers?

    I want to buy very low cost index tracking funds (ideally <1%). However I have noticed that a number of the more promosing brokers are from the us and don't offer services to Ireland.

    Where can I get a list of cheap discount brokers that Irish people can operate?

    I had short listed these as being cheap but I am not sure if they operate in Ireland
    E*Trade, Schwab, Fidelity, TdAmeritrade, Scortrade, FirstTrade

    Basically am I confined to certain brokers as this is a small country etc...?

    Any info appreciated?
     
  3. KeyPoster

    KeyPoster Registered User

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    26
    Re: How do I buy the Vanguard Index 500 Investor VFINX (total Stock Index)?

    Thanks for info regards ETFs. But I hope to purchase at regular intervals using dollar cost averging so ETFs would result in higher costs.

    Does anyone know how to regularly (monthly/quarterly) purchase a low cost index. I am particularly finding it difficult to locate compeditative discount brokers for execution only. The US brokers appear to be much cheaper but they don't seem to operate in Ireland. Any tips?
     
  4. Daytrader

    Daytrader Registered User

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    28
    Re: How do I buy the Vanguard Index 500 Investor VFINX (total Stock Index)?

    Supergirl
    I suggest ETFs are the way to go even with Dollar cost averaging. Using a discount broker, you could invest in US etfs for maybe $15 a trade..Compare that with investing in advertised managed funds. I bet there rates annually work out to be much higher..There are plenty of good online brokers in Ireland..TD waterhouse..Renaissance Financial Markets offer over 650 etfs..You could use IG markets in the UK..they offer loads of ETFs..
     
  5. KeyPoster

    KeyPoster Registered User

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    26
    Re: How do I buy the Vanguard Index 500 Investor VFINX (total Stock Index)?

    DayTrader: where could I get a list of discount brokers operating in Ireland? I was told that US discount brokers are cheapest but the ones that I contacted do not operte here?
     
  6. Senorito

    Senorito Registered User

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    30
    Re: Cheapest on line execution Discount Brokers?

    I have a Firstrade account. They will allow you to operate as an Irish resident though I cant trade options.

    I have recently setup a TDW account which, though slightly more expensive per trade is easier to operate as you can fund your account with euros and avoid bank commissions on forex transactions to dollars. If you are an active trader trades are 15 + VAT. It is also closer to home and given it is a part of TD Ameritrade I can see there commissions dropping in the future. Fingers crossed!
     
  7. KeyPoster

    KeyPoster Registered User

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    26
    Re: Cheapest on line execution Discount Brokers?

    I am hoping to invest €7k per year via execution only transactions either monthly or quarterly.

    Monthly thats €7k/12 = €583 @ €15 per trade thats 2.6% expense ratio
    Quarterly thats €7k/4 = €1750 @15€ per trade thats 0.86% expense ratio

    Am I missing something here i.e. is my maths correct and are there other costs?
     
  8. KeyPoster

    KeyPoster Registered User

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    26
    Cheapest Execution Only Discount Brokers

    Please add info regarding execution only discount brokers? Regular Investment Accounts (Dollar Cost Averging)

    I have treid in the past, but here goes again.

    Could we make a "best buys" thread for this once info is gathered? I do not know how to do this myself.

    Please give execution only discount brokers and some costings etc and how rate your brokers?
     
  9. finfix

    finfix Registered User

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    7
    Re: Cheapest Execution Only Discount Brokers

    Zecco and Interactive Brokers are two that I know of.

    I don't think etrade lets you open an account with them unless you have a UK bank account.
     
  10. Daytrader

    Daytrader Registered User

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    28
    Re: Cheapest Execution Only Discount Brokers

    Supergirl,

    There are two main players in the Irish market. Renaissance Financial Markets and TD Waterhouse are regulated in Ireland. Renaissance Financial Markets provide the same platform technology as Etrade. TD waterhouse provide the City Index platform technology. Buying €10000 worth of Bank of Ireland will cost you €16.60 in commission with Renaissance Financial Markets. The same trade will cost €22.50 with TD Waterhouse. €20000 of Bank of Ireland will cost you €20 in Comm (€22.50 with TD). Renaissance charge 0.10% on UK and EURO CFDs (TD charge 0.20% on UK and 0.30% on EURO CFDs). Renaissance don't charge you for Commodity and Index CFDs. TD waterhouse charge GBP20. Bottom line is if your trade size is greater than € 25000 go with TD waterhouse for share trades. If your trade size is less than €25000 or if you trade CFDs -avoid TD waterhouse. Hope this helps. You have other players like Globalreach. They charge 0.50% commission per trade. So buying €10000 of Bank of Ireland will cost you €50 with Global Reach. Then you have Share watch. They charge 0.30%. They will charge you €30 comm for a €10000 trade in Bank of Ireland
     
  11. KeyPoster

    KeyPoster Registered User

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    26
    Re: Cheapest Execution Only Discount Brokers

    Here are the information sources that I have been using to date to try and find out more info. My aim is to find a good, cheap online broker. Am I just complicating it?


    -The Financial Regulator Register,
    List of Investment Firms authorised under Regulations 6 and 11 of the European Communities (Markets in Financial Instruments) Regulations (MiFID) at 22 Dec 2009
    (http://registers.financialregulator.ie/DownloadsPage.aspx)

    -"Cost Survey Stockbrokers Fees and Charges 2006" from the Financial Regulator
    (http://www.davy.ie/content/pubarticles/FinancialRegulatorCostsSurvey.pdf)

    -Irish Stock Exchange (http://www.ise.ie/index.asp?locID=62&docID=-1),



    The two main players in the Irish market: Renaissance Financial Markets and TD Waterhouse are regulated in Ireland you say. I didn’t see TD Waterhouse on the Financial Regulators list?

    TdAmeritrade
    have told me that they do business in Ireland? Anyone have any experience of using them?
     
  12. KeyPoster

    KeyPoster Registered User

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    26
    Holding securities by an online discount broker?

    In terms of on line discount brokers (execution only).
    There appear to be different means of holding securities to choose from
    -Physical Certificate
    -"Street Name" Registration
    -"Direct" Registration

    Physical Certificate
    The security is registered in your name on the issuer's books, and you receive an actual, hard copy stock or bond certificate representing your ownership of the security.


    "Street Name" Registration
    The security is registered in the name of your brokerage firm on the issuer's books, and your brokerage firm holds the security for you in "book-entry" form. "Book-entry" simply means that you do not receive a certificate. Instead, your broker keeps a record in its books that you own that particular security.


    "Direct" Registration
    The security is registered in your name on the issuer's books, and either the company or its transfer agent holds the security for you in book-entry form. The "Direct Registration System" (also known as "DRS") allows investors to transfer securities held this way
    Ref: http://www.sec.gov/investor/pubs/holdsec.htm

    If this is so then what do the following mean
    -Cash Account
    -Margin Account
    -Nominee Account


    Iam confused?
     
  13. PMU

    PMU Frequent Poster

    Posts:
    783
    Re: Total Stock Market Index Fund US +EU?

    Why not IShares MSCI World ETF (IWDP.L / SWDA.L)? Or split on market cap between any S&P and Eurozone index trackers?
     
  14. PMU

    PMU Frequent Poster

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    783
    Re: Recomended reading - Discount brokers, mutual funds

    Why not read Yale’s endowment manager David Swensen’s “Unconventional Success: A Fundamental Approach to Personal Investment” http://www.amazon.co.uk/Unconventional-Success-Fundamental-Approach-Investment/dp/0743228383

    and, based on Mr Swensen’s analysis, avoid unit funds?

    The Wikipedia entry for this book says:
    Unconventional Success

    In 2005, Swensen wrote a book called Unconventional Success which is an investment guide for the individual investor. The general strategy that he presents can be boiled down to the following three main points of advice:

    • The investor should construct a portfolio with his money allocated to 6 core asset classes — diversify among them and have a bias toward the equity sections.
    • The investor should rebalance his portfolio on a regular basis (rebalancing back to the original weightings of the asset classes in the portfolio).
    • In the absence of confidence in a market-beating strategy, invest in low-cost index funds and ETFs. The investor should be very watchful of costs as some indices are poorly constructed and some fund companies charge excessive fees (or generate large tax liabilities).
    He slams many mutual fund companies for charging excessive fees and not living up to their fiduciary responsibility. He highlights the conflict of interest inherent in the mutual funds, claiming they want high fee, high turnover funds while investors want the opposite.


    http://en.wikipedia.org/wiki/David_Swensen
     
  15. KeyPoster

    KeyPoster Registered User

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    26
    Re: Total Stock Market Index Fund US +EU?

    What Eurozone index trackers would you use?
     
  16. KeyPoster

    KeyPoster Registered User

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    26
    Trading via US on line discount brokers

    MB Trading have told me all trades must be in US dollars? How does/should someone living in a Euro country such as Ireland manage this? What method of exchange should I choose i.e. banks or broker or...? Bearing in mind that I want to regularly invest the same amount of money every month/quarter (dollar cost averging). How do the rest of ye trade US mutual funds that are denoninated in $.


    They also said "all trades must be through the desk"? What does this mean?
     
  17. defiantshrim

    defiantshrim Registered User

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    12
    A quick question to tag onto here, what is the tax treatment of EFTs? Are they the same as individual shares, i.e you just declare dividends and capital gains?
     
  18. Fella

    Fella Frequent Poster

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    264
    Alot of great info in this thread , thanks to all that contributed.
    With deposits in banks gaining poor interest, I felt I really needed to get involved in alternative investments and decided after an awful lot of reading that ETF's are the way to go for me.

    My plan is to invest 10k once a year into ETF's , i'm hoping to buy 10k worth of Vanguard life strategy 60% equity (http://www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F00000MLUO) my understanding is the ACC means the dividend is accumulated and i'll have to deal with this after 8 years (re tax and revenue).

    So I applied online for a TDwaterhouse account , have to just send off forms now.

    My plan is to use a currency transfer service to put in 10k in gbp to this account and then hopefully buy the vanguard life strategy on the LSE (assuming its on TDwaterhouse, I can't see it at the moment as I can't log in)

    As I will have over the 5k threshold for no yearly fees I only have to worry about the government levy & the low cost of the fund.

    Would anyone be so kind as to point out any major or minor flaws in my plan, I have read every post on this forum and other forums , there is a lot of great info that got me this far , was tempted to ring TDwaterhouse and ask there advice but fearful that they may misadvice me to benefit themselves. I understand that ishares also offer these funds but they are charging more for management costs , I also don't mind been over exposed to GBP. Currently i'm saving around 75-100k a year so this will be only ~10% of my savings. Is that too conservative?Is there a general rule in savings what you should leave in cash in bank compared to stocks and shares or funds?

    Thanks in advance
     
  19. alwaysonit

    alwaysonit Frequent Poster

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    73
    Is there any broker that Irish investors can use that can compete with TDwaterhouse or Saxo? Only brokers perceived as “safe” would be of interest, nobody wants the risk of their broker getting into financial trouble. Perhaps, as suggested earlier in the thread by keyposter, we should make a key thread on the costs of each broker, outlining the cost per trade, yearly fees and how to avoid them and government levy. Perhaps the number of Vanguard ETFs that can be bought through them would be useful to forumites also.

    I would have no problem researching fees from the two named and others if people know if they accept Irish customers, but it’s always better to have people give information first hand.

    Fella could you buy all of the popular Vanguard ETFs through TD?
     
  20. alwaysonit

    alwaysonit Frequent Poster

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    73
    Last edited: Sep 16, 2014
    Some of the below has already been established, but i emailed a few so here's a short summary:

    TD waterhouse said I can't deal with ETFs off a TD Ireland account, TDameritrade accept Irish residents, from Great Britian I'm waiting on a reply but on their site it says you must be a GB resident and if not to contact them. Have not asked their Canadian or Luxembourg brokerage offices.

    E*trade don't accept residents of Ireland.

    We can only invest in Vanguard via a broker.

    Saxo accept Irish residents.

    Fidelity seem to accept us, but I was given a vague reply.

    Here's a good link of online brokers available in the UK with costs included http://monevator.com/compare-uk-cheapest-online-brokers/
     
    Last edited: Sep 16, 2014