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Mutual Fund Classes of ETFs

yogibearbullyogibearbull
edited February 12 in Fund Discussions
Why not? And somebody had to be first. That's F/M that is offering OEF TBMFX as a class of ETF TBIL. DFA may be next. LinkedIn LINK.

Comments

  • WABACWABAC
    yogibearbull said:

    Why not? And somebody had to be first. That's F/M that is offering OEF TBMFX as a class of ETF TBIL. DFA may be next. LinkedIn LINK.

    Would it mean that etf prices would equal the NAV?

  • yogibearbullyogibearbull
    @WABAC, they don't now (check Vanguard OEF-ETF pairs), so won't in future. But for liquid ETFs, prices will be close to NAVs.
  • WABACWABAC
    yogibearbull said:

    @WABAC, they don't now (check Vanguard OEF-ETF pairs), so won't in future. But for liquid ETFs, prices will be close to NAVs.

    Thanks for the education yogi. I always appreciate it.
  • Observant1
    edited February 12
    Many firms requested permission from the SEC to add ETf share classes to existing mutual funds.
    With this move, F/M is going in the opposite direction—adding an OEF share class to an existing ETf.
    What is the rationale for such a move?
    Does F/M plan to market this OEF to 401(k) plans?
  • msf
    The only OEF share class is Institutional.
    Institutional Class Shares are available only to institutional investors and certain broker dealers and financial institutions that have entered into appropriate arrangements with the Fund. These arrangements are generally limited to discretionary managed, asset allocation, eligible retirement plan or wrap products offered by broker-dealers and financial institutions.
    Prospectus:
    https://www.sec.gov/ix?doc=/Archives/edgar/data/831114/000139834426002657/fp0097506-1_485bposixbrl.htm

    The ER of 0.15% is the same as the ETF's. Generally if an OEF share class doesn't cost more than an ETF share class, and if I have access to the OEF class, I prefer it. I know that I will have paid exactly what the share is worth at 4PM. No intraday fluctuations, no tracking errors. And no SEC section 31 fee when selling (though that's currently $0.00).

    Unlike Vanguard funds where one can convert OEF shares into ETF shares (but not the other way around), one will not be able to convert between share classes of this fund.
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