Q: Hi
I'm looking to invest $5K/month in an equity fund. You previously sided with VEQT for its history and slightly better long term returns versus ZEQT.
However, I can buy ZEQT for free, whereas I'm charged $10 a trade for VEQT.
Would saving the $120/year in fees be short sighted if VEQT will appreciate more in the long run? Or will the $120/year add up to even it out?
Thanks,
Robert
I'm looking to invest $5K/month in an equity fund. You previously sided with VEQT for its history and slightly better long term returns versus ZEQT.
However, I can buy ZEQT for free, whereas I'm charged $10 a trade for VEQT.
Would saving the $120/year in fees be short sighted if VEQT will appreciate more in the long run? Or will the $120/year add up to even it out?
Thanks,
Robert
5i Research Answer:
The fee adds up to approx. 0.2% annually. But the performance difference on VEQT has been much higher (future returns not guaranteed, of course) and we would not really consider the $120 as an important factor here. For a smaller amount of cash, of course, the importance would increase.