etrade s&p 500 index fund

Fidelity also had similar statements, but without a guaranteed date. I doubt they would change the ratio, at least not all the way to .79% because index funds are so competitive that if they did, most people would sell and move to some other fund. So I think it's relatively safe.

If you're holding the fund in a taxable account, selling it requires you to realize your capital gains.

i was checking vanguards site and could not find a similar statement. maybe i missed it. i'm just afraid that this is an introductory offer that will soon be changed. after all it is very very low. i'm also trying to make a long term decision on where to keep my money. i don't want to watch anything.

cporro wrote: > what they seem to be saying is the expense ratio is due to increase in

This is a valid concern with any fund that is temporarily limiting its expenses. If it doesn't grow enough by the time the contractual limit expires, it might not be able to keep them low. Also - similar concern - tracking error (deviation from the index) may be larger for smaller index funds.

Another thing you should look into is whether you can transfer that fund elsewhere through ACAT (the electronic platform for broker to broker transfers). I wouldn't be surprised if it can only be custodied at eTrade, but check if that's the case.

If it is, and they don't change that in the future, then buying the fund commits you to eTrade, for that fund anyway -- you'd need to sell the fund to move those dollars somewhere else. Some people don't like the idea of being tied to one broker/custodian for the long term. I've seen cases where an investor maintains an old brokerage account just for one proprietary fund, that can't be ACAT-ed out. Selling would trigger so much in capital gains taxes that it would wipe out years of minor cost advantages of alternative funds they'd rather own. It's a coulda-woulda-shoulda kind of thing, they're kind of stuck.

But this doesn't apply to all funds with names that sound proprietary. For example I think Schwab's index funds can now be held elsewhere, though that wasn't always the case. It's something to check fund-by-fund

-- I believe Yahoo includes it, as does Morningstar.

-Tad

that's a good point and one i was totally unaware of. i figured it was just a close the account type of fee. maybe $50 per account. but selling it, that's another thing. sheesh.