[shred45]

Do you manage the portfolio of each customer individually? How closely will this match the target portfolio for smaller investment sizes? I see that there are minimum investment sizes. Do I need to buy at least one share of each member of the SP500 for instance?

How do transaction fees compare with expense ratios of, say, Vanguard? I see that you account for them in your backtest, but it would be helpful to represent that in terms of an expense ratio.

[jjmaxwell4]

We use fractional shares. But otherwise you are correct, our minimums are set to allow you to buy at least $5 of each member of the US 500.

We do not charge trade commissions. There are some SEC fees charged for trading across most major brokerages. The national best bid offer (NBBO) means you will get executed at the current best price for a given security across all exchanges.

[shred45]

Thanks, regarding transaction fees, I was referring to slippage (should have said transaction cost). This depends a lot on your customers rebalancing settings, but it would be good to be able to compare that directly to VOO.

[jjmaxwell4]

Yeah it's an interesting point. Due to the redemption mechanism of ETFs, my understanding is that an ETF's bid-ask spread is basically the weighted average of the bid ask spread of it's underlying holdings. Which to answer your questions means that buying the individual stocks within an ETF would result in approximately the same slippage as buying the ETF itself.

"Bid/ask spreads of the underlying securities directly impact the costs to market makers to trade ETFs" from this .pdf: https://www.ssga.com/library-content/pdfs/etf/au/spdr-au-etf...

[ajoseps]

This is definitely not true in practice except for maybe highly liquid ETFs and underliers