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 Post subject: Small account balance fees?
PostPosted: Tue Sep 11, 2012 10:44 am 

Joined: Fri Sep 12, 2008 12:29 pm
Posts: 1633
Location: Seattle, WA
My daughter has a Coverdell ESA with $640 in it. The account is at Sharebuilder and the positions are
AGG ISHARES BARCLAYS AGG BOND FUND $18.03
EFA ISHARES TR INDEX MSCI EAFE IDX $81.36
SPY S&P 500 INDEX SPDR $539.11

My question is, do any of those investments, all ETFs AFAIK, have an absolute (non percentage based) fee? Or a fee for low balances? (I believe some Vanguard funds, for instance, have fees below a certain balance.)

It would cost us $9.95 to sell each of the smaller positions. But if it's that or the money just getting eaten away in a year or two by fees, well, I guess paying 50% in fees is better than nothing.


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 Post subject: Re: Small account balance fees?
PostPosted: Tue Sep 11, 2012 11:58 am 

Joined: Thu Apr 05, 2007 3:05 pm
Posts: 1356
With ETFs, you can buy just one share if you like, there's no minimum investment unless for some reason the brokerage has imposed one. You should check at http://www.savingforcollege.com/coverdell_esa_providers/. But the ETFs by themselves do not carry a fixed fee.

I looked up these ETFs (you can do a simple Google search to find them) and it appears that their only expenses are the management expense ratio, which is a percentage, not a flat fee. It just acts as a small drag on growth.

The place where you usually find minimum balance fees is mutual funds, not ETFs.


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 Post subject: Re: Small account balance fees?
PostPosted: Tue Sep 11, 2012 3:09 pm 

Joined: Fri Sep 12, 2008 12:29 pm
Posts: 1633
Location: Seattle, WA
Yes, I did search for them. I was just looking for reassurance I guess. I have already made mistakes with the account (for instance, the AGG position already has a 40% loss because ShareBuilder didn't work like I thought it would, and invested $8 minus a $4 investment fee every Tuesday for three weeks before I noticed.)


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 Post subject: Re: Small account balance fees?
PostPosted: Tue Sep 11, 2012 3:15 pm 

Joined: Thu Apr 05, 2007 3:05 pm
Posts: 1356
Okay, but be sure to check the link I provided above, because it shows any fees imposed by the broker.


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 Post subject: Re: Small account balance fees?
PostPosted: Tue Sep 11, 2012 4:22 pm 

Joined: Fri Sep 12, 2008 12:29 pm
Posts: 1633
Location: Seattle, WA
brad wrote:
Okay, but be sure to check the link I provided above, because it shows any fees imposed by the broker.


Sharebuilder is not on that list, but their page regarding ESA's claims they don't charge fees:
http://www.sharebuilder.com/sharebuilder/help/topic.aspx?CategoryCode=CHELP009


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