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This morning on an attempted buy of an ntf mutual fund, the preview screen showed the usual transaction fee for a TF fund. I tested several other ntf funds, and they all showed a tf on the preview screen.
Called Fido and it is a system glitch they're working on, no estimate of when it'll be fixed. But, said the csr, if you want, you can buy the fund with the fee and then get a refund by request (by phone).
Update: For some reason, Fido can't get rid of the notice on the preview page that there's a TF ($49.95) for any purchase of any NTF fund. But, a csr told me today, the TF will not be charged. I tested that assertion today, and it seems to be right. Guess I'll see tonight when the transaction actually goes through.
Update: For some reason, Fido can't get rid of the notice on the preview page that there's a TF ($49.95) for any purchase of any NTF fund. But, a csr told me today, the TF will not be charged. I tested that assertion today, and it seems to be right. Guess I'll see tonight when the transaction actually goes through.
Fido has another quirk. Often if I begin to sell shares of a NTF fund held more than 60 days a message pops up: "If you believe you may be entitled to a fee wavier contact a representative." I did a couple times. They basically said to ignore the warning. So, if the shares have been held over 60 days I now proceed with the sale without contacting them. No trouble so far. But you'd think over 3 or 4 years they'd have corrected that error message.
Fido has another quirk. Often if I begin to sell shares of a NTF fund held more than 60 days a message pops up: "If you believe you may be entitled to a fee wavier contact a representative." I did a couple times. They basically said to ignore the warning. So, if the shares have been held over 60 days I now proceed with the sale without contacting them. No trouble so far. But you'd think over 3 or 4 years they'd have corrected that error message.
Fidelity's seems to apply short term redemption fees FIFO. So even if you've recently purchased shares, a sale may not trigger the 60 day redemption fee. So long the shares you're selling could be older ones (regardless of how you identify them for tax purposes), Fidelity seems to say this is okay.
When you got this message, had you purchased any shares recently? I could see a situation where one bought 900 shares a decade ago, 100 shares last week, and now wanted to sell 100 shares. As I understand it, no fee would be due.
But, if you said you wanted to sell $1000 worth, the system would not know fer sure that you wouldn't have to sell 901 shares (including 1 "new" one) until the actual sale went through. That's because it doesn't know the closing price at the time you enter the order. So I could envision the system warning you about the possibility (however remote) of being charged a short term redemption fee.
Just guessing here.
Fidelity speaks of "holding period" without clarifying how that is calculated. I believe that this is FIFO. OTOH, Vanguard is very clear, and not so generous:
You'll also pay a $50 early redemption fee for all sales executed within 60 calendar days of the trade date of your most recent purchase of the same fund
"When you got this message, had you purchased any shares recently?"
That's very likely and probably explains why the message doesn't always come up. I'll make a note to check the next time I make a sale out of a NTF fund. Those occassions have become quite infrequent for now. Thanks @msf for the insight.
FWIW - I hold just 3 NTF funds, each 15.5% of portfolio.
Comments
I checked today and the TF on an NTF buy message is gone now.
When you got this message, had you purchased any shares recently? I could see a situation where one bought 900 shares a decade ago, 100 shares last week, and now wanted to sell 100 shares. As I understand it, no fee would be due.
But, if you said you wanted to sell $1000 worth, the system would not know fer sure that you wouldn't have to sell 901 shares (including 1 "new" one) until the actual sale went through. That's because it doesn't know the closing price at the time you enter the order. So I could envision the system warning you about the possibility (however remote) of being charged a short term redemption fee.
Just guessing here.
Fidelity speaks of "holding period" without clarifying how that is calculated. I believe that this is FIFO. OTOH, Vanguard is very clear, and not so generous: That is, LIFO.
https://investor.vanguard.com/client-benefits/brokerage-fees-commissions
That's very likely and probably explains why the message doesn't always come up. I'll make a note to check the next time I make a sale out of a NTF fund. Those occassions have become quite infrequent for now. Thanks @msf for the insight.
FWIW - I hold just 3 NTF funds, each 15.5% of portfolio.