In fact, the supermarkets, to their credit, don't often have the sickliest on the NTF shelf.
Money managers from NTF funds are almost always those invited to Schwab's conferences for financial advisers.
The upshot is that supermarkets now constitute a huge percentage of the ownership of many NTF funds.
At least at Fidelity and Schwab, the two biggest supermarkets, NTF bond funds do seem to cost more.
Notably absent from their supermarket NTF shelves (and ubiquitous in our Best Buy rankings): Vanguard's famously cheap bond funds.
Does that mean NTF funds impose higher expenses on shareholders than other funds?
For sure, the funds paying the NTF freight are hardly desperate no-names.
Once fund sponsors are in the NTF system, it's hard to leave.
For the right fund, an NTF fee is cheaper for the sponsor than advertising, and cheaper for the investor than going through a broker.
Surely that's one reason Schwab could raise NTF fees by 0.05 points to 0.4% early last year, even though funds were still reeling from the bear market.
The expense ratio for leading NTF bond funds at these shops averages 0.66%, while the average cost of bond funds on the Forbes Best Buy list is 0.37%.
One in four of those on Morningstar's Picks list are NTF funds, and the group includes such well-respected no-load outfits as Ariel, Artisan, Clipper, Janus, Marsico and Third Avenue.
The move provoked a stare-down with Schwab, which ordinarily mandates that a fund list its cheapest share class with the supermarket, but Schwab let the old Davis fund keep its NTF listing for existing customers.
Investors can construct diversified portfolios by accessing some of the best no load, no-transaction-fee (NTF) funds in different categories such as American Century Equity Income (TWEIX), UMB Scout International (UMBWX), and Matthews Asia Pacific Tiger (MAPTX).
Several funds told FORBES they follow a convention in which half the NTF fee (up to 0.2%) is charged to investors, just as accounting or legal fees or some marketing fees are, and the other half comes from the fund sponsor.
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