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TRP Ultrashort Bond ETF Market Purchase Disallowed at Fido

Apparently, Fido considers the new TRP ETF TBUX to be illiquid based on volume. Fidelity will only allow limit orders to buy TBUX due to low volume. Why can't TRP create a market for this etf by getting financial advisers to buy it for their clients ?

Comments

  • Set a limit order at the ask? Problem solved lol
  • edited October 11
    Inception Date: 9 / 28

    Opened at $50. Dropped by 3 cents today (NAV $49.97)

    TBUX Chart from Lipper (Growth of $10,000):

    image

    Should be a great fund. I’d expect assets to grow quickly. Fido = 99% good. But occasionally they toss a curve ball.

    How about a limit order above ask? Pretty sure I read that you can do it to insure a purchase.
  • OK-thanks for the tips-I've never placed a limit order before.
  • edited October 11
    carew388 said:

    OK-thanks for the tips-I've never placed a limit order before.

    I haven’t either.:) You might start with a small test purchase first. The price certainly won’t vary much.

    Proceed with caution!

  • At Schwab today TBUX traded only 1k shares, so it may not have caught buyers’ eyes.
  • Or just set the limit order at the price you want to pay, and set the expiration to “good tip cancelled” and the buy will not go through until that price triggers the order to execute. The money will sit “used” (subtracted from funds available for trading) until the order executes. This is a ultra ST bond fund, so it really should only move up or down a few cents a day at most (unless a black swan-ish event happens).
  • Schwab has this note regarding TBUX:
    "Please Note: TBUX has a special maintenance requirement of 100%"

    Can anyone tell me what that means?
    Thanks- OJ
  • OK, with a search I did find the following info from Ameritrade. It apparently deals with margin purchases, which I never even consider, so it's probably a logic "don't care".
    Maintenance Requirements on Stock

    How are Maintenance Requirements on a Stock Determined?

    In accordance with the rules of the exchanges, TD Ameritrade places “Initial and Maintenance” margin requirements on accounts. These requirements dictate the amount of equity needed in an account in order to hold and create new margin positions.

    All broker/dealers, including TD Ameritrade, Inc., reserve the right at any time to adjust minimum maintenance requirements. This adjustment can be done on an individual account basis as well as on a stock-by-stock basis, depending on a stock's trading volatility and other factors. Your account may be subject to higher margin equity requirements based on how market fluctuations affect your portfolio.

    Below are the maintenance requirements for most long and short positions. However, concentrated positions and certain stocks may have special requirements between 35% and 100%.

    Non-marginable stocks cannot be used as collateral for a margin loan. Likewise, you may not use margin to purchase non-marginable stocks.
  • edited October 13
    Just checked TRP’s funds page

    “30 Day Yield - Annualized Dividend” for TRBUX is given as 0.69% (not that I pretend to understand all the jargon). Interestingly, there’s a fee wavier which appears to drop the ER down to 0.29%. The ER on TBUX (the etf ) appears to be 0.17%. Seems to boil down to choice of either a 0.69% or 0.81% annualized yield (based on a 0.12% difference in ER).

    T. Rowe Price / LINK
    -

    Fido’s “deferred” ntf fees being what they are does complicate matters. Can’t just buy TRBUX one day and than switch to TBUX the next. I certainly understand @carew388’s frustration.
  • there’s a fee wavier which appears to drop the ER down to 0.29%

    As strange as this may sound, you're reading it backward. The gross ER is 0.29%, while the net ER, after accounting for fee waivers is higher, at 0.31%.

    This is because the waiver currently in effect says that the ER will be no higher than 0.31% including a clawback of previously waived expenses.

    If the current ER without waivers were, say, 0.35%, then 0.04% would be waived and the ER would be 0.31%. But the current ER without waivers is 0.29%. The fund management is thus allowed to take another 0.02% to get back fees it previously forwent.

    The clawback is limited to 0.02% because according to the fee waiver agreement, the net ER cannot rise above 0.31%.

    As the prospectus states: "Fees waived and expenses paid under this agreement (and a previous limitation of 0.35%) are subject to reimbursement to T. Rowe Price Associates, Inc., by the fund whenever the class’ expense ratio is below 0.31%."
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