The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: Riff on July 10, 2015, 12:49:22 PM
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My wife's 401k was invested in many crappy high expense mutual funds through NationWide until a few months ago when we went online and sold them all and bought VTSAX. At least, I think it's VTSAX. It has 0.05% expense ratio (plus a .37% net asset fee, the bastards), and the name is "Vngrd Ttl StMkt Indx Fd AS." The AS I'm guessing is Admiral Shares.
What stumps me is that for the ticker, it says "NW.CUQA," and the share price is $1.06. Does this make any sense?
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Voya does the same thing.
Because all the other mutual funds are expensive, the fund gives the account custodian a kick back.
You are invested in a VTSAX type allocation, but since the ER is so low the custodian charges you it's own fee because it's not getting a kickback from Vanguard.
The additional fee is still probably lower than the other options. Do you have a Self Directed Brokerage Account Option? Voya does, so we transfer my wife's contributions to TD Ameritrade and buy commission free Vanguard ETFs.
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Regarding the strange ticker and share price, it's because it's not a ticker or share price. It's Nationwide's internal code for their separate account that directs its investments into (presumably) VTSAX, and the "unit value" of that separate account -- which is how insurance/annuity companies do things when they pretend to be investment companies. It's a pretty common practice in the 401(k) world.