Author Topic: Transition To Index Funds: Load Fee Question  (Read 1382 times)


  • 5 O'Clock Shadow
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Transition To Index Funds: Load Fee Question
« on: October 21, 2015, 05:48:58 PM »
Greetings Mustachians,

I'm a long time guest and reader, but this is my first time posting. I have a bit of a conundrum regarding level-load fees (face punch for owning funds with such high fees in the first place):

If I own roughly 10k in funds with annual fees of 1.5-2.5% and load fees of 1%, is it a better move to sell and switch to an index fund immediately, or wait 1 year to sell them, when the load fees drop to 0%?

The transition would be to 0.05% funds. Given this, my "back of the napkin" math says sell and switch now.
A = Wait           = (10000 * 0.9855)  = 9850
B = Switch Now =  (10000 * .99)      = 9900

Would you agree or am I missing a part of the equation?


  • Walrus Stache
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Re: Transition To Index Funds: Load Fee Question
« Reply #1 on: October 21, 2015, 05:51:47 PM »
Yeah, selling now for 1% and paying 0.05% for the next year is better than paying 1.5% for the next year and paying 0% to switch. If you only had to hold on to the bad funds for a few months to get rid of the load, the answer would be different.