Selling a Mutual Fund | RRSPs and RRIFs | Discussion forum

kanaka said

I understand that the selling of a mutual fund is much different than selling stocks in as much you cannot sell them at market price or use a stock limit option. Apparently you give the order to sell, but the price is not determined until after the market closes. I have my mutual funds with an adviser but have no problem, if it is to my benefit, to move them to my online brokerage.

Questions:

Is there any one out there that has both bought and sold on their online brokerage (with out the use of an adviser)?

I buy and sell mutual funds regularly in my RBC Direct Investing accounts.

Is there any one out there that has sold through their adviser and had some type of control of selling at a unit price that you chose?

NO - as you make the decision to sell, typically prior to 2 pm (or so) and then the order occurs using the 4 pm closing price. This is both with a self-directed account and an advisor based account.

Say if the unit price is closing at $80.00 is that what you would receive? Or?

YES - you either pay or receive that day's closing price.

Any information would be greatly appreciated.

I am looking at being able to sell at a price that I determine.

Cannot be done. You place an order when you decide the time is right and if the market changes dramatically after the cut-off time you either benefit or suffer.

Thanks Peter

This is why I mostly hold ETFs as they trade more like stocks, while still holding a basket of investments, like a mutual fund. I tend to ONLY use mutual funds when I am accumulating enough of a position to make it worthwhile to buy the associated (by me) ETF.

So, I may own RBC's bond fund (RBF270) and add small amounts to it (typically monthly bond interest payments) till I have enough (in my mind) to justify buying more of the iShares DEX Universe Bond ETF (XBB). When I am ready I issue a SELL on RBF270 and wait one day to see what price it will settle at and then buy a multiple of XBB to use up all the funds. The next month when I have more interest payments I re-buy the RBF

Greg

kanaka said

[snip]
So I guess if my adviser cannot handle the transaction for me, I will have to transfer them to my online brokerage and handle myself.
[snip]

There is no reason your advisor cannot handle the transaction. The ONLY sticking point may be HIS cut-off time during the day and HIS reluctance to have you make the transaction. If the fund company has a cutoff time of, say, 2 pm, your advisor may say his cutoff time is, say, 1 pm. He also may tell you that you should NOT do the transaction,

But other than knowing the cutoff time in advance, the advisor is getting paid to "look after" your account. He is typically getting 1/8 of 1% per quarter (trailer fee) from the fund company to act as their representative to you.

And, getting back to cutoff time, there has been more than once where I got it in my head to sell or buy something, and decided to think about it for an hour. Next thing I knew the 2 pm cutoff time had passed. So, I waited till the next day, and missed the cutoff time again. I now place my orders at ANY time of day, even 2 am, knowing that the trade will be locked in at 2 pm the next day and will settle 3 days later. As I said earlier, my mutual fund holdings tend to be temporary buckets being held just till I buy an appropriate ETF.

And, speaking of ETF's here is a Vanguard tool I just discovered that makes ETF comparison really simple.

Greg