A few days ago, I decided to put about $2000.00 into VFINX through Scottrade. Turns out I bought it at $81.01 per share, so they bought 24.688 shares which turns out to be exactly $1999.97. Strange thing is, they charged me the full $2000.00. Now I don't exactly need the 3 cents, but I'm a bit concerned that a financial institution is taking the liberty to round and taking the difference. I emailed them to ask about it and got:
<< Having contacted our mutual funds department, we find that this accounting method is what the Vanguard Fund used to process this order...This is more or less a rounding issue with Vanguard >>
Is this normal practice? Should I be concerned?
ebas7565
Ancient Member
posted: Mar. 28, 2003 @ 10:28p
That depends on what you call "normal practice". That 3 cents amounts to .0015 percent. It in the end amounts to normal practice because when dealing with the number (or rather fraction) of shares of the fund you purchased this typically results. It costs more to process a 3 cent refund....hell just talking to the CSR cost them 3 cents. I'm not saying its right or wrong, but at the end of the day thats the way most things are done.......You could always write Vanguard and ask them (email isnt as effective), or call....but that will cost you more than the 3 cents (but its the principle of it). You shouldnt be concerned however, its not a big thing
MyTwoSense
Senior Member - 1K
posted: Mar. 29, 2003 @ 12:14a
Most likely Vanguard takes the shares out to 3 decimal places. So 24.688 shares is correct since to give you 24.689 would have come to a total of $2000.06.
liviathan
Member
posted: Mar. 29, 2003 @ 9:53a
This happens to me all the time, specially when you enter the amount in MS Money. They are just rounding different...
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