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Zero fee ETFs

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For those among you trying to drive every last penny of fund expenses out of your portfolios, I just stumbled across these, which were introduced earlier this year: 

BNY Mellon US Large Cap Core Equity ETF (BKLC), 0.00% ER
BNY Mellon Core Bond ETF (BKAG), 0.00% ER

I know nothing about them beyond what I've read: please take this post as an FYI, not a recommendation.

It looks as if they are avoiding licencing fees for the famous indexes and using their own indexes (see the PS below).  The Large Cap Core has a couple of hundred stocks, looks to be similar to the SP 500: the most heavily weighted assets of the BNY compared to the Vanguard 500 fund are nearly identical.

This is the first zero fee bond fund I've run across: are there others?

From the press coverage of these releases, it sounds as if BNY Mellon intends to keep these ETFs at zero fee permanently.  (There is no talk of short term fee waivers or any such).

Evidently the two zero-fund ETFs are their attention-getting marketing strategy: they are late to enter the ETF field, and they are at the same time offering a bunch of other ETFs that do charge expense fees.

PS: The stock fund is using a US Large Cap index from Morningstar. The bond ETF uses Bloomberg Barclays US Aggregate Total Return Index.

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Yes, but I don't think any of the Fidelity "zero" options are bond funds.  (Though their low cost Bond offering is low enough to undercut Vanguard.)  

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You're right, I missed that. It's sort of amusing how a few vendors are trying to make a big deal about beating Vanguard to the bottom on fees on index funds. A bunch of Jonnie come latelys! What took them so long? 

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I still feel better about getting people started with Vanguard due to the way the company is structured. Fidelity does have slick advertising though(paid for by those holding their other funds):
https://www.fidelity.com/mutual-funds/investing-ideas/index-funds
https://investor.vanguard.com/mutual-funds/fees

Target Date mutual funds at Vanguard have a $1k minimum.  Vanguard ETFs are priced by whole shares. VTI is ~$175, BND is ~$90.

Scott Dauenhauer has said that the way Vanguard pays out dividends, investors are actually being paid to invest or seeing 0% effective expense ratios - I need to look more into that to understand their structure even better.  Vanguard is one of the few companies that I dig up information on and feel better about 😛

More info: https://mymoneywizard.com/vanguard-vs-fidelity/

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On 9/3/2020 at 7:30 PM, ScottO said:

Vanguard is one of the few companies that I dig up information on and feel better about 😛

I felt that way until they opposed the fiduciary rule. I don’t have the data to demonstrate this, but with the plethora of funds they now have (sector funds being the biggest offender), they do seem to be drifting from the founding vision.

Still, I think their company structure is the best out there, even if there are better funds at other institutions. 

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