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I suspect that it is the Dodge & Cox company, for example, that charges the transfer fee, not Schwab.
You mean the transaction fee? No, it's not the fund family that charges the transaction fee, it's the brokerage. Mutual funds on a brokerage's no transaction fee (NTF) list actually pay the brokerage to be on that list. These are typically the smaller funds who want to attract new investors, not the large, successful funds like Vanguard or Dodge & Cox. It's often cheaper for investors to just pay the transaction fee for a good fund with a low expense ratio than to buy a NTF fund which jacks up expenses by paying off those brokerages every year.
You mean the transaction fee? No, it's not the fund family that charges the transaction fee, it's the brokerage. Mutual funds on a brokerage's no transaction fee (NTF) list actually pay the brokerage to be on that list. These are typically the smaller funds who want to attract new investors, not the large, successful funds like Vanguard or Dodge & Cox. It's often cheaper for investors to just pay the transaction fee for a good fund with a low expense ratio than to buy a NTF fund which jacks up expenses by paying off those brokerages every year.
Yes sir, you are correct. I mistakenly called it a transfer fee because of the abbreviation (trans.), which is ...ahem, also the abbreviation for transaction. Thus, I stand corrected.
Thanks for pointing out how it works. I was unaware of the NTF list; that would make sense.
Okay for you. I don't look at bonds for safety, but rather diversification. Emerging market bonds are probably less correlated with the movement in US stocks, thus, provide a bit of diversification. It used to be that foreign stocks were also less correlated with US stocks, but that correlation has grown tighter and, thus, not suitable for diversifying.
Emerging market bonds are like junk bonds that actually have high correlation with stocks. If diversification is what you want, emerging market bonds may not be the right asset class for you. The only asset class that has negative correlation with stocks is US treasuries. The experience of 2008 bears this out. While everything came crashing down (US stocks, foreign stocks, foreign bonds, gold, real estate), US treasuries were rallying. PCY PCY: Basic Chart for POWERSHARES EMERGING - Yahoo! Finance (Powershares Emerging Markets Sovereign Debt) lost 44% in Nov. 2008 while VFITX (Vanguard Intermediate Term Treasuries) gained 8.77%.
This is probably a matter of personal preference, but I want my bonds to be non-stock like. I want them to be as safe and boring as possible. If I wanted stocks, I'd buy stocks, not junk bonds or emerging market bonds. My ideal portfolio is that which has the safest possible asset class (US treasuries) balanced against the riskiest asset class (microcap emerging market stocks).
One that I don't see mentioned here is Aberdeen Asia-Pacific Income Fund (FAX). Invests in Australian bonds and Asian bonds. The AUD benefits from the commodity trade with emerging markets like China.
I'm considering FAX myself but I'm hesitant to buy a CEF trading close to NAV and unlikely to pay a premium. On the next pullback I'll look closer.
One that I don't see mentioned here is Aberdeen Asia-Pacific Income Fund (FAX). Invests in Australian bonds and Asian bonds. The AUD benefits from the commodity trade with emerging markets like China.
I'm considering FAX myself but I'm hesitant to buy a CEF trading close to NAV and unlikely to pay a premium. On the next pullback I'll look closer.
I'll have to take a look at the FAX also (pun intended). Australia just raised their prime interest rate which makes it about the only country that was positioned to do so. Their bonds will probably become more popular since they are primarily a commodity play, which will remain strong given China's and India's domestic growths.
Okay for you. I don't look at bonds for safety, but rather diversification. Emerging market bonds are probably less correlated with the movement in US stocks, thus, provide a bit of diversification. It used to be that foreign stocks were also less correlated with US stocks, but that correlation has grown tighter and, thus, not suitable for diversifying.
Are treasuries not suitable for this purpose?
When TSHTF, I'd want to know that my investments were in countries that play by the rules. Are you at all concerned?
When TSHTF, I'd want to know that my investments were in countries that play by the rules. Are you at all concerned?
Well, the global bond fund that I bought has bonds from the following countries in its Top Ten Holdings list: Sweden, Korea, Brazil, and Turkey. All of those countries appear to be playing by the rules. I would argue that there will be more economic growth in Korea, Brazil and Turkey over the next decade than in the USA. Brazil is hosting both the 2014 World Cup and the 2016 Olympics, for example.
I would argue that the USA does not necessarily play by the rules either, unless it is Goldman Sachs and its competitors who are making the rules. There is too much cross-over between Wall Street investment firms and the US government and it doesn't appear to matter who is in office, democrat and republican, they both kow-tow to Wall Street.
I am not anti-Wall Street since I have a large chunk of my net worth tied up in stocks and one bond fund. Am just trying to get some out-of-country diversification RE bonds as I have already done so with stocks. It just seems to me that Treasuries have been in somewhat of a bubble phase since prices are up, thus, yields are down. A lot of people jumped into Treasuries this past year and missed the run-up in stock prices post February.
Well, the global bond fund that I bought has bonds from the following countries in its Top Ten Holdings list: Sweden, Korea, Brazil, and Turkey. All of those countries appear to be playing by the rules. I would argue that there will be more economic growth in Korea, Brazil and Turkey over the next decade than in the USA. Brazil is hosting both the 2014 World Cup and the 2016 Olympics, for example.
depends on what kind of growth you are talking about. Significant growth? yes for Brazil. Korea, Sweden and Turkey? Not a chance in hell.
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I am not anti-Wall Street since I have a large chunk of my net worth tied up in stocks and one bond fund.
I don't see any causal relationship there. Many wealthy people are anti-Wall Street.
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