I'm trying to find the most cost efficient method possible to make regular small investments into index funds.
I have had a look at both ETFs and normal index funds. Vanguard seem to be the cheapest for both.
However, it seems as with everything, we are getting ripped off compared to the US
The VAS standard ASX 300 ETF has an expense ratio of 0.15% which is pretty good. However the brokerage charges with ETFs kills it, especially for regular small investments. This is an even bigger problem when I want to buy about 3 ETFs to diversify with overseas stocks as well.
The equivilent Vanguard fund doesn't have any fees for contributions but the expense ratio is .75 down to .35% for amounts over 100k.
This compares with the US where its is .05% for both types of funds and you can get free brokerage if you trade with Vanguard.
I was thinking using interactive brokers might be an option. This brings the brokerage down to $6 per trade. No CHESS sponsorship is the cost though.
Then I was thinking that trades made on the US markets are only 1 dollar a trade. Would buying a US All stock index on the ASX or the NYSE make any difference? My only concern would be in terms of franking credits for any Australian stock ETFS would not be available.
Anyone have any other ideas? Really wish we had the access to the same cost Vanguard funds as in the US.