Author Topic: What is your minimum buy amount for ETFs? (I'm Canadian)  (Read 1819 times)

tomatops

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What is your minimum buy amount for ETFs? (I'm Canadian)
« on: January 17, 2017, 01:12:00 PM »
Not a mathematician so need some help here.

I'm not a Questrader for my own reasons, so I do pay a $9.99 commission each time I trade.

Right now, I'm chucking in $1500 into two mutual index funds (0.35% and 0.51% MER respectively) and am wondering if that is a sufficient amount for justifying going straight to a single ETF purchase each month that balances US and international indices.

Thoughts? What is your minimum ETF purchase dollar amount?
« Last Edit: January 17, 2017, 01:25:48 PM by tomatops »

RichMoose

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Re: What is your minimum buy amount for ETFs? (I'm Canadian)
« Reply #1 on: January 17, 2017, 03:24:00 PM »
Not a mathematician so need some help here.

I'm not a Questrader for my own reasons, so I do pay a $9.99 commission each time I trade.

Right now, I'm chucking in $1500 into two mutual index funds (0.35% and 0.51% MER respectively) and am wondering if that is a sufficient amount for justifying going straight to a single ETF purchase each month that balances US and international indices.

Thoughts? What is your minimum ETF purchase dollar amount?

It depends on your purchasing behaviour, rebalancing behaviour, and investment timeline. If you save $1,500 a month over 10 years and can save 20bps by switching to ETFs, as long as your commission costs are $10 a month you pretty much break even. However as time goes on the ETF begins to win as the higher mutual fund fees are a compounding drag on your portfolio whereas the commission fee is one-time (ie. it just reduces your investment contribution from $1,500 to $1,490 per month).

Personally I use Questrade so ETFs was an easy decision for me. My typical purchase is a couple grand.

Space Pickle

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Re: What is your minimum buy amount for ETFs? (I'm Canadian)
« Reply #2 on: January 17, 2017, 04:01:01 PM »
I do $500/month with Questrade.

Retire-Canada

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Re: What is your minimum buy amount for ETFs? (I'm Canadian)
« Reply #3 on: January 17, 2017, 04:03:08 PM »
Thoughts? What is your minimum ETF purchase dollar amount?

My thoughts? I use Questrade so I'll buy 1 share if that's what my AA and saved $$ calls for.

If I was paying ~$10/trade I want to be buying ~$10K+ that's still 0.1% in fees. $1K is 1% in fees - ouch! :(
« Last Edit: January 17, 2017, 04:42:52 PM by Retire-Canada »

smilla

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Re: What is your minimum buy amount for ETFs? (I'm Canadian)
« Reply #4 on: January 17, 2017, 04:15:25 PM »
It depends on your purchasing behaviour, rebalancing behaviour, and investment timeline.

+1   How many trades a year? What is the account balance?  Spending an effective .1% of the account in annual trading costs is my maximum.

At Scotia iTrade that works out to up to 5 $9.99 trades per year (my minimum buy is $1000). In the meantime, I use the closest commission-free etfs to collect contributions throughout the year, so although I prefer VUN or XUU for US equities, I buy HXS for free until I do my annual rebalancing (HXT instead of XIC/VCN for Canadian equities, VEF instead of XEF for developed, and XEC is commission-free and my preferred choice for emerging markets). This way the money is in the market but I'm not overspending on fees.

I don't have a minimum buy for the commission-free etfs or at Questrade.

Heckler

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Re: What is your minimum buy amount for ETFs? (I'm Canadian)
« Reply #5 on: January 17, 2017, 06:54:27 PM »
10 trades at $9.95 per year is my planned maximum, resulting in a 0.025% account MER above my ETFs fees.

$7500 minimum (0.13%) for bond and $3500 (0.28%)minimum for equity ETFs. Majority of contributions are collected in my work plans using slightly higher MER index mutual funds with no transaction fees, free to transfer annually to my self directed ETFs.

$20,000 (0.15%) minimum for VTI with Norberts Gambit (3 trades).  Plan is to do our USD travelling using this holding, eliminating NG on the sale. 

This is why CCP advocates a minimum account value before switching to ETFs.   Questtrade, Tangerine or Eseries for smaller accounts.