What's the purpose of going through a company for a mutual fund when you can just buy s&p500 shares?
Like what's the point of using USAA's mutual fund when I can just go through Optionshouse's trading platform and buy some SPY stock? I'm pretty to new to investing.
- Common SenseLv 77 years agoBest Answer
The ETF "SPY" vs. a S&P500 Mutual Fund. The internal fees are lower (generally) for the ETF.
You'll that the Vanguard & iShares ETF version of the SPY are cheaper than the SPY.
A Mutual Fund (Like the Vanguard S&P 500) will have a little more internal fees. That could be around $100 a year for $100,000.00 (I'm assuming a .10 difference in the fee.
If you make one purchase of the ETF it can be worth it (especially for the liquidity during the trading day). However, if you're making regular investments..... the fees of a Broker for the ETF can kill you. Optionhouse may waive fees on certain ETF's.
BTW: Optionhouse is a good broker.... but I think it may not be the place for a new investor.
- JohnLv 67 years ago
First off, SPY isn't a stock. It's an exchange traded fund (ETF) which bears a lot of similarity with USAA's mutual fund including havnig management fees (which are almost negligible for both). The answer is pretty much that it is 6 of one, half a dozen of the other. The ETF might be a little more tax efficient (because of "in-kind redemptions"). The mutual fund is probably easier (all your funds in one place and a financial advisor assigned to you).
- delcambreLv 43 years ago
Am incorrect or are mutual funds purely a collection of shares? right that's my take - in case you have an extremely sturdy company you recognize will do nicely then you quite can do shares outright. in case you have a team of businesses that would do nicely and you will play the unfold then mutual funds are the thank you to pass. Mutual funds seem "safer" to me. yet once you certainly have confidence the corporate you're procuring shares in to accomplish than there you pass. shares themselves have distinctive potentials i think of the important difficulty once you make investments - is making an investment in some thing you think in and a few thing you will like your capital to assist out with. of direction there are different issues to take a place in - like activities taking part in cards.
- 7 years ago
the lower fees through USAA may offset the brokerage fees if you SPY it. add up the brokerage transaction fees vs. the mutual funds fees.
my guess is the mutual fund will operate cheaper than the brokerage account.
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- Eddie WLv 77 years ago
Buy mutual fund is for diversification. The growth might be slow but it's safer.