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VTIPX - Load ?!?!?!?

edited February 2013 in Fund Discussions
I just went to buy VTIPX at Vanguard. I was alerted it has a 0.25% purchase fee. WTF ?!?!?!?!

Comments

  • It's not a load because the money goes back into the fund (i.e. shared among all investors, including yourself). It's there to cover the additional trading expenses incurred because of your entry into the pool. In contrast, a load goes into the pocket of the broker.

    If you want to avoid the fee, buy the same portfolio as VTIP.

    From Vanguard:
    The [purchase] fee is paid directly to the fund and therefore is not a load. ... The purchase fee allocates the costs of new share purchases to the investors making those purchases, rather than to existing shareholders. Trading fees, including purchase, redemption, and short-term trading fees, do not apply to ETF Shares
  • I sold VIPSX and moved the money to this fund. Duration of portfolio is quite less for this fund in comparison. I also sold VBMFX (Total Bond) and moved to VFSTX (V'rd short-term invetsment grade fund).

    Hope these moves turn out to be good.
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