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Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

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Best brokerage for MF investing

I am using TD Ameritrade and not happy with its MF research tools and restrictions to keep a fund for 6 month to avoid transaction fee.

What brokerage board members can recommend for MF and ETF investment ? My concerns are mostly:

1. A number of available MF.
2. A number of NTF with minimal holding periods.
3. Available MF research and portfolio analysis tools.


  • I don't want to be out-of-line, but I'd ask you to consider your objectives. The terms "investment" and "minimal holding periods" just don't go together. The short-term trading penalties are in place to discourage short-term trading and are generally imposed by the fund management companies, not the broker.

    There are two kinds of people who lose money trying to employ short-term trading in mutual funds: those who have and those who haven't yet but who will. My unsolicited advice is to find a low-cost fund that you want to own for years and then remember Bogle's admonition: "Don't do something, just sit there." Even the brokerage firms warn against short-term trading in mutual funds. Talk to one of the mutual fund specialists at Ameritrade about this; I've found them very knowledgeable. And as a grandfathered Think-or-Swim customer, I pay no more than $15 on any mutual fund transaction.
  • edited February 2014
    Not to step on Mulder420's toes but Fidelity is among the worst. Been there done that. Their short term trading fees were exorbitant and at least many years ago after so many short term trades the fees were increased even more. From my experience it is Scottrade all the way. And what they consider short term is three months.

    EDIT: Had I adhered to the advice of the John Bogles of the world I would be looking at a very bleak retirement.
  • Charles Schwab.
  • Schwab????? A $49.95 short term trading fee on funds held less than 90 days. If I am missing something here please let me know as I have been known to miss things.
  • Thank you, Ted. Brokerage reviews usually deal with stock investment. I selected TD Ameritrade long time ago when I invested in stocks and I was quite happy. Now when I switched to mutual funds investment I found many MF specific drawbacks in TD and I am looking for alternative.
  • Which mutual funds that you are interested in are not on TD Ameritrade's platform?
  • Hi Junkster. What is a definition of short term at Scottrade and what their short term trading fee?
    Do they have similar MF selection as other brokerages?
  • Ted, I am OK with TD fund selection. I do not like 6 month holding period for NTF and their MF research tools. I cannot even plot a graph for MF price.
  • David, short term trading fee for under three months is $17. I've never had a problem not getting a fund I wanted through their broad list of available funds. And at least through my particular Scottrade office, I have found their staff most excellent in dealing with the *rare* problems I have encountered over the years.
  • For research tools, try M* or Yahoo Finance, call Scottrade for trading fee information at one of their branch offices. "God helps those who help themselves."
  • Junkster said:

    Schwab????? A $49.95 short term trading fee on funds held less than 90 days. If I am missing something here please let me know as I have been known to miss things.

    I've found Schwab to be a good group to work with. There was one time where I got dinged for a $49.95 fee as a result of some rebalancing, and my VP/Consultant promptly removed the charge after about a 15 second conversation.

    Frankly, I'm really not sure why a 90 day holding period would be troublesome under normal circumstances. Is there something I'm missing?

  • I think DavidV might be interested in trading in an out of sector ETFs ??????????????
  • While nothing is perfect, Fidelity would be my first recommendation in breadth of NTF mutual funds, research tools and competent platform that works. Fidelity has reduced the minimum holding period for non-Fidelity funds to 60 days. Their platform will also accurately keep track of lots and warn you properly for fees, etc.

    If you just want a trading platform that is barely usable but no trading fee and no minimum holding other than what the fund itself may impose, you can use Wells Fargo where they give you 100 free trades per account if you keep a certain minimum.

    Stay away from Vanguard brokerage for non Vanguard funds. It is the worst possible.
  • (Inadvertently sent to cman. Still trying to get use to the new format)

    Unless I have read this incorrectly, at Fidelity Funds Network on their NTF (no transaction fee funds) they hit you with a $75 charge for any fund sold within 60 days. That compares to $17 at Scottrade. Plus, if I also recall correctly, at some point if you trade in and out of funds too much they ask you to take your business elsewhere.
  • Mulder420 said:


    my experience is with schwab and i have fund a great number f available, mostly ntf mutual funds with a 2 or 3 month required holding period to avoid incurring additionl costs. so most transactions are free unless you trade frequently. have found staff to be helpful and do not rush you.
  • Different people use different parameters to evaluate what is good. The parameters given were NTF list (and holding period to avoid fee), total number of funds, and research/tools. Fees were not in that list - rather the opposite - how easy is it to avoid fees?

    Based on those parameters, I agree with Mulder on Fidelity.

    They've been improving their NTF list (especially the load-waived NTF funds), so they're getting much closer to Schwab and TDAmeritrade on NTF offerings. The short term trading fee is only for 60 days, in comparison with Scottrade's 90, Schwab's 90, and TDAmeritrade's 90 (e.g. on an SDBA) or 180 (depending on account type).

    Total number of funds - they all offer a gazillion. I'm disinclined to trust Scottrade's figures, because its "broker comparison" page claims that while they offer 14,500+, Fidelity "only" offers 4600+. Fidelity says it offers over 10,000, and its fund search engine (you don't have to be a customer to use it) confirms it carries 10,871 (as of today).

    The reality is that none of them carry this many funds. Morningstar's screener says the website has information on just 7,127 funds. The higher numbers claimed by the brokerages is because they offer 2, 3, 4 or more share classes of a single fund, and count these as different "funds". Which makes the whole thing rather meaningless, because you're only going to be buying one share class of a fund (at least usually).

    I agree with Ted that you'll get better mutual fund research at M* than at any broker's site - they usually repackage M* research. That said, Fidelity is one of the few places I've seen that plots total returns (as opposed to prices) for funds, compares funds, and let's you vary time periods - just as M* does. And they do a good job of profiling your portfolio - their tool is integrated with Yodlee, so they will incorporate outside accounts as well if you want. (Other sites do this, it's not unique to Fidelity, e.g. I've seen something similar on TRowePrice.)

    Fidelity has improved its portfolio analysis. A couple of years ago, it would take each fund in your portfolio and assume that 100% of that fund fell into a particular style box. (In contrast, M*'s X-ray analysis looks inside the fund to see what it really owns.)
    On the other hand, Schwab seems to still attribute 100% of each fund to a single asset (e.g. large cap stock, small cap stock). But to Schwab's credit, it does give good portfolio reports (rate of return, risk).

    Because of the shorter NTF holding period, because of the better portfolio analysis, because it has a similar assortment of NTF funds, I tend to give Fidelity a slight edge over Schwab. But I think Schwab is also excellent based on the parameters given. (Based on other parameters including cost of TF funds and ease of specifying tax lots, I'd give Fidelity a bigger edge.)
  • I use TDA for my IRA and find it almost impossible to determine the cost of shares in a fund purchased at different times. The main page shows an updated cost based apparently on the last reinvested dividend. (So Seafarer always shows a loss.) If I go to the gain/loss page, the cost per purchased or reinvested share is not listed so far as I can determine. Inside an IRA this doesn't matter, but in a regular account, it looks like I'd have to calulate my own costs to select shares to sell if I were trying to sell expensive or cheap shares.
    Am I just confused, or is this an accurate description? My email exchange with their rep only resulted in a comment that I was correct in my observation and that she didn't know of any plans to change their presentation.
    Next year I expect to open a brokerage account to hold stocks and mutual funds, but I want one that has clearer records than I see at TDA. I have an IRA at Vanguard and 403b at Fido. Guess I could add another site if it met my needs. I don't expect to trade often, so the holding periods aren't too important.
    Thanks in advance.
  • I like both Schwab and Fidelity. Schwab has more load-waived funds and Fidelity has better and easier cost-basis reporting for each mutual fund that you own. One problem with Schwab is that they show the cost-basis that includes the dividend reinvestment cost which is good for the tax purpose but does not show your actual cost (out-of-pocket cost) for the total number of mutual fund shares that you own. For example, if you buy a mutual fund for $1,000 that pays out $20 dividend at the end of the year that you reinvest to buy more shares, the cost basis for the tax purpose for all your shares is $1,020, but your out-of-pocket cost basis is still $1,000. Fidelity shows this correctly. I have sent Schwab this feedback 2-3 times in detailed emails and I have had lengthy discussions with their customer support on multiple occasions. So far my feedback has gone into the circular file called the dustbin.
  • Thank you all for your contribution. Looks like the consensus is Fidelity and Schwab are the best choices overall even though Scottrade has much smaller transaction fee.
  • TradeKing charges $9.95 to buy a mutual fund and $9.95 to sell one, regardless of how long you hold the fund. They impose no short term trading fees. They claim to offer 8000 different funds. I have a TradeKing account but have not traded funds through them, as I've only bought no transaction fee funds offered by Scottrade.
  • I would definitely second Scottrade for MF investing/trading. I have accounts at Vanguard, Scottrade, Interactivbrokers and TDAmeritrade. Each have their own advantages and disadvantages, but for mutual funds, Scottrade is by far the best, IMO.
  • I should have said that TradeKing charges $9.95 to buy or to sell a "no load" fund. They charge nothing for buying or selling load funds. TradeKing is probably best for no-load fund traders who trade often and wish to avoid short-term trading fees.
  • I'm not clear on how $19.90 round trip at TradeKing for all funds (i.e. no NTF funds) is better than Scottrade's $17 round trip, including short term trading fee, for its NTF funds.

    Perhaps if one is planning on trading a lot of TF funds, TradeKing comes out looking very good. The round trip for TF funds at Scottrade is $34, or $51 if the trade is done within 90 days - Scottrade adds a short term trading fee to its TF funds.

    For completeness: Fidelity is slightly cheaper than Scottrade on short term round trips for TF funds - it charges $49.95 on the buy (for most TF funds), no sell charge (on TF funds), no short term trading fee. Schwab is most expensive for TF funds, at $76 to buy, but like Fidelity, no sell charge and no short term trading fee (on TF funds).

    It really depends on what one is looking for - what mix of funds and holding periods is expected. This is why I tried to hew to the parameters that David originally put forth.
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