Fidelity has 10 basis point funds for $10K.

I believe Vanguard has Admiral shares that go down to 9 basis points depending on the fund.

Fidelity has "super Spartan" (can't remember the exact name) for 7 or 8 basis points for $100k.

Anything less and you probably want ETFs. But the bid/ask spread and commissions might get you. I have Wells Fargo so I don't pay any commissions.

So you're basically asking if there are load based funds that have zero expense ratio?

If anything you're likely to find most load based funds have higher expense ratios as they are likely "actively" managed.

I'm not aware of a mutual fund that charges no yearly expense ratio in exchange for having a big load or wrap fee but I'd imagine that if one existed the load or wrap would be a huge fee.

JLtheP said:That 15bp you're referring to is the cost of managing the index, which tracks the S&P 500. In other words, it can't be done for free.

But what costs are there for managing an index fund? You buy shares of each company in the index, and then just sit there and do next to nothing until someone decides to cash out their investment. Aside from collecting dividends and distributing them to the shareholders of the fund (which costs very little), I don't see any significant costs to running the fund. Restrictions on frequent trading are part of how these index funds are able to keep costs so low.

I just thought I might be able to save some money if there were a low-priced index fund that charged for joining/leaving the fund, but low/no ongoing fees for holding it. But alas, there don't seem to be any. Thanks to everyone who replied.

frugalpete said:slightly off topic but i've wondered about this for awhile. why do ETFs have lower expense ratios than the corresponding mutual fund?

Because they never have to redeem shares to investor. When you sell a mutual fund, the fund has to sell shares to get the cash it needs to pay you. When you sell an ETF, the fund doesn't have to do anything, because you're just selling the ETF to someone else.

Bobalude said:

Your $80,000 generating $120/yr in expenses is probably subsidizing the cost of having many more people with $5000-$10,000 accounts that generate only $7.50-$15/yr in expenses.

Are you suggesting it would be cheaper to open eight 10K accounts than one 80K?

verruckterBaum said:Fidelity has 10 basis point funds for $10K.

I believe Vanguard has Admiral shares that go down to 9 basis points depending on the fund.

Fidelity has "super Spartan" (can't remember the exact name) for 7 or 8 basis points for $100k.

Anything less and you probably want ETFs. But the bid/ask spread and commissions might get you. I have Wells Fargo so I don't pay any commissions.

The 'super Spartan' are Advantage class (vs. Investor class) funds. They generally do run at 7 bp. Check your company sponsored plans, because my wife's 403(b) gives us access to them with no minumum.

Load index funds aren't cheaper because the sales person is paid after the sale, through a trailer taken from the 12(b)-1 fee of the expense ratio.

My bank once tried to sell me a S&P 500 index fund with a 5% load and 0.88% annual expense ratio