For those of you looking for a quick tool to assess how fees and expenses affect your investments’ performance, check out the Fund Analyzer app by the Financial Industry Regulatory Authority (FINRA). This tool enables you to look up over 18,000 mutual funds, Exchange Traded Funds (ETFs) and Exchange Traded Notes (ETNs). Most importantly, it allows you to run a simulation of your projected investment value and the impact of fees and expenses over a selected time period.
Why FINRA’s Fund Analyzer over Personal Capital?
Before you Personal Capital fans pull up in an unmarked van, throw a bag over my head and take me out to the middle of nowhere leaving me for dead – hear me out. I am actually a huge fan of Personal Capital. No one loves a robust financial tool that is 1) simple and 2) efficient in terms of aggregating all of your accounts and transactions in one convenient place more than I. The pretty graphs and other shiny visuals are extremely effective whereas other financial tools and their terminology can get too technical and overwhelming. And who wouldn’t love that handsome Investment Fee Tool???
What it doesn’t do particularly well, for me at least, is capture and/or automate alternative investments such as rental property mortgages and lease income escalators, cash value of life insurance, partnership investments that require a K-1 tax form or plain accounts who are not yet associated. Consequently, I unable to see a complete picture of my total net worth.
Again, I am merely advocating FINRA’s tool as a quick alternative, not a substitute, to Personal Capital should you run into the same issues as I have. Otherwise, J$ the founder of Budgets are Sexy and Air Guitar Champion 1986-88 wrote a great review here that I would highly encourage you to check out.
FINRA’s Fund Analyzer
For purposes of showing you how it works, I am using the Blackrock S&P 500 Index Fund Institutional Shares [ticker: BSPIX]. As this tool has a comparison feature between multiple investments, I selected the Vanguard 500 Index Fund Institutional Select Shares [ticker: VFFSX] to see fees and expenses difference. Below is a step-by-step process:
Step 1: Select your fund(s)
It is setup so that you are able to type in the ticker symbol if known, the name of the fund or a keyword to find exactly what you are looking for. Once found, it moves over to the right as a selected fund and simply click on ‘Show Results’ button.
Step 2: Enter Investment Details
After clicking on ‘Show Results’, you need to determine how much you are going to invest (e.g. $10k), an assumed rate of return (I am using a conservative 5%) and the time period (10 years) you would like to analyze.
Step 3: Compare
A ‘Summary’ will automatically populate with a table containing high level information, but the most important is what I have circled in red. It shows a drastic difference in fees between the two – $140.95 (Blackrock) vs. $12.88 (Vanguard). I sure wish my 401(k) plan would offer the Vanguard fund as an option.
Whether or not you are using Personal Capital, this little tool can really come in handy on the fly. Especially when you are in some sketch-place blogging about your portfolio and the second you turn on your WiFi – everything gets hacked.
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