I used to have a target date fund until I realized its yield did not meet the yield of its underlying holdings and it cost more to hold.
For example, looking at the Vanguard 2045 fund, its yield is 2.05% and expenses are .15%.
For a $100,000 investment this means you'll receive $2,050 in dividends and have an expense of about $150 for the year.
If you look at this fund's underlying holdings individually, you'd get a total return of 2.24% (a 9.2% improvement over the target date fund) and an expense of .068% (a 55% reduction in fees).
So, more yield at a cheaper fee. What am I missing?
Submitted June 11, 2018 at 11:08AM by secondnameIA https://ift.tt/2JGjRDr
