Are all mutual funds traded on IB considered "no load"?

[Cyrix]

I called IB's customer services about this, and from what I was told, it appeared that all mutual funds traded on IB were "no front load" even when they were funds with front load in prospectus.

They said that IB did not have the ability to charge the front load, so all front loads were waived. However, back loads would be charged as commissions.

Is that true? That sounded too good to be true.

Thanks.

 

[drm7]

Yes, they are called "load waived" funds.

 

[Cyrix]

Yes, they are called "load waived" funds.

Can you please clarify,

Is only a subset of funds on IB "load waived", or are all funds "load waived" as long as they are tradable on IB?

If all funds are like this then I can trade all class As at very low cost.

Thanks.

 

[drm7]

As far as I know, there are no funds on IB which have front-end loads. There is an IB Rep on here, so hopefully he can confirm.

 

[Zzzz1]

Lol, too good to be true? Have you looked at the mediocre performance of mutual funds over the past 20 years? Virtually all of them have underperformed a broad based (tradable) index tracker. You are dancing because you can invest your money in a mediocre fund just because to don't get charged a completely unnecessary fee that should never be charged in the first place?

I called IB's customer services about this, and from what I was told, it appeared that all mutual funds traded on IB were "no front load" even when they were funds with front load in prospectus.

They said that IB did not have the ability to charge the front load, so all front loads were waived. However, back loads would be charged as commissions.

Is that true? That sounded too good to be true.

Thanks.

 

[Cyrix]

Lol, too good to be true? Have you looked at the mediocre performance of mutual funds over the past 20 years? Virtually all of them have underperformed a broad based (tradable) index tracker. You are dancing because you can invest your money in a mediocre fund just because to don't get charged a completely unnecessary fee that should never be charged in the first place?

There are some asset classes in which mutual funds almost always outperform ETFs. For example, most high yield bond funds outperform HYG and JNK in terms of both return and risk.

 

[Zzzz1]

Hardly any over the past 20 years. Care to share a few? I would be interested in learning stuff I do not know yet. The many I came across so far did not outperform a bond index tracker fund.

There are some asset classes in which mutual funds almost always outperform ETFs. For example, most high yield bond funds outperform HYG and JNK in terms of both return and risk.

 

[Cyrix]

Hardly any over the past 20 years. Care to share a few? I would be interested in learning stuff I do not know yet. The many I came across so far did not outperform a bond index tracker fund.

For discussion on investment choices please open another thread.

This thread was posted under the broker sub-forum regarding broker policies.

 

[clacy]

Lol, too good to be true? Have you looked at the mediocre performance of mutual funds over the past 20 years? Virtually all of them have underperformed a broad based (tradable) index tracker. You are dancing because you can invest your money in a mediocre fund just because to don't get charged a completely unnecessary fee that should never be charged in the first place?

Are you talking about managed mutual funds only?

As far as index mutual funds, they broadly track the index just like ETF's. For instance you can't see any difference between VFINX (Vanguard's S&P index fund) vs SPY. ZERO difference. Most of Vanguard and Fidelity's index funds have management fees that are the same or lower than that of ETF's.

As another poster pointed out, many managed funds do out-perform indices as well, particularly in managed bond funds, such as high yield corporates and munis.

You should probably be more specific when you give advice like this, IMO.

 

[Zzzz1]

I was specific yet you ignored it. I talked about bond funds yet you replied referring to equity funds. I talked also specifically about no load funds or funds in general that only assess minimum fees because that's what tracking funds should do, they should be cheap. My assertion is that over 20 years hardly any managed bond fund significantly outperformed an index tracking bond fund. Of course should management fees of the managed bond fund be incorporated into the performance result. And when you talk about a managed high yield bond fund then you should compare that with a high yield index and its tracker fund.

My whole point is that managed funds are dying and will be completely gone in less than a decade because they add no value but cost more. They have for decades fed a whole army and subsection of financial services with nice fees in exchange for little to nothing in terms of alpha. The only reason of their existence was lack of alternative choices. Now we have choices and that's reflected in the outflow from managed funds.

Are you talking about managed mutual funds only?

As far as index mutual funds, they broadly track the index just like ETF's. For instance you can't see any difference between VFINX (Vanguard's S&P index fund) vs SPY. ZERO difference. Most of Vanguard and Fidelity's index funds have management fees that are the same or lower than that of ETF's.

As another poster pointed out, many managed funds do out-perform indices as well, particularly in managed bond funds, such as high yield corporates and munis.

You should probably be more specific when you give advice like this, IMO.