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TD Ameritrade Latest Brokerage Refusing To Lead In Cutting ETF Commissions
Of the more than 300 ETFs that TD offers commission-free, Mr. Hockey said, "five of those ETFs hold 20% of the assets."
"There does get to a point where it gets to be too much," he added.
This is nonsensical for so many reasons.
At best, it's an argument for TDA to prune junk ETFs from its NTF list. It says nothing about what fraction of ETF assets reside in TF funds such as VT, VTI, BND, IVV, AGG, etc. All of these were NTF at TDA until eight months ago.
What matters is not how much junk TDA is offering for purchase without a fee, but how much of substance it is charging fees for.
Even accepting the faulty reasoning that what matters is the concentration of NTF assets in five ETFs, is 20% really so concentrated? By this reasoning, Will Danoff is also at the "point where it gets to be too much."
The top five holdings of FCNTX amount to about 25% of the fund, and the fund has 330+ holdings, a tad more than TDA has fee-free ETFs. Does that mean that he shouldn't consider buying a new security if it is a good one?
TDA made a decision to drop many popular, low cost funds. Vanguard offering nearly 2,000 ETFs NTF just months later makes TDA look like a piker.
Comments
At best, it's an argument for TDA to prune junk ETFs from its NTF list. It says nothing about what fraction of ETF assets reside in TF funds such as VT, VTI, BND, IVV, AGG, etc. All of these were NTF at TDA until eight months ago.
What matters is not how much junk TDA is offering for purchase without a fee, but how much of substance it is charging fees for.
Even accepting the faulty reasoning that what matters is the concentration of NTF assets in five ETFs, is 20% really so concentrated? By this reasoning, Will Danoff is also at the "point where it gets to be too much."
The top five holdings of FCNTX amount to about 25% of the fund, and the fund has 330+ holdings, a tad more than TDA has fee-free ETFs. Does that mean that he shouldn't consider buying a new security if it is a good one?
TDA made a decision to drop many popular, low cost funds. Vanguard offering nearly 2,000 ETFs NTF just months later makes TDA look like a piker.
ETFs dropped from TDA's NTF list last November:
https://www.tdameritrade.com/retail-en_us/resources/pdf/TDA1000834.pdf