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TD Ameritrade: How to Buy and Sell Mutual Funds (2019 Beginner’s Instructions)


Step-by-step instructions on how to buy mutual fund TD Ameritrade. Fees and cost of selling, trading mutual funds.



How to Buy Mutual Funds at TD Ameritrade


If you’re new to the world of investing and are interested in buying and selling mutual funds, keep reading. We’re going to give you step-by-step instructions on how to buy mutual funds at TD Ameritrade.


First, Read the Broker’s Educational Materials


The first step to trading mutual funds is to become familiar with their characteristics. TD Ameritrade has a learning section on its website devoted to investment education, and there are materials on mutual funds there. The section can be located by clicking on ‘Education’ in the top menu and then selecting ‘Mutual Funds & ETFs’ under ‘Education Center.’ On the new page that appears, there will be several videos on mutual fund basics. You’ll definitely want to go over these before buying anything.


Next, Use the Broker’s Fund Screener


After you have journeyed through a minimum level of mutual fund education, it’s time to start looking for a possible investment to make. TD Ameritrade offers a very good mutual fund screener at Research & Ideas > Screeners > Mutual Funds.


tdameritrade fund screener


Once you have the fund screener open, you’ll be able to look for funds that meet specific criteria. For example, Morningstar rating is a searchable variable. If you want a fund that is highly-rated, you can specify four or five stars from Morningstar. You can also specify asset class (stocks or bonds, for example), fund family (T. Rowe Price or Vanguard, for example), or the expense ratio. This last variable is the yearly cost of investing in the fund.

Another issue that can be used in a search is load status. A fund’s load is a percent-based fee, either at purchase or sale, that the fund charges. Many funds have no load, so be sure you know what you want and what you’re investing in before placing a trade.


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Third, Go Through the Results


After you enter all the criteria you’re interested in, it’s time to go through the screener’s results. In a test screen we ran, we got 29 results. This is a small list that we received by specifying several criteria. In total, TD Ameritrade offers about 11,200 mutual funds. More than 3,700 have no load and no transaction fee. If you want only no-load, no transaction-fee funds, be sure to specify this preference in a search.

When we were browsing through our 29 funds in Google Chrome, the results didn’t display correctly. To correct the display problem in this browser, click on “See complete table” in the upper-right portion of the results. Doing so will generate a new window where the results are displayed better.

A scan’s results can be sorted by the criteria specified in the search. There’s also a ‘views’ drop-down menu in the top section of the scan’s results. There are several options here that will produce different sortable columns of information.

One of these is ‘Fees & Expenses.’ As the name suggests, this view produces several columns on the cost of trading a mutual fund. Columns include transaction fee status, minimum investment amount, and expense ratio.

In a screener’s results, there are also buy and sell buttons in the far-right column. But first, you want to do thorough research on a specific fund before placing a trade.


Fourth, Read a Fund’s Profile Page


Clicking on a fund’s ticker symbol in the far-left column will produce a new page with information on that particular fund. You’ll definitely want to look over all this information before deciding on a fund.

TD Ameritrade delivers a lot of information on mutual fund profile pages. At the top is information on load and transaction fee statuses. The fund’s title and ticker symbol will be shown once again. The fund family is displayed next to the percent allocation.

This last piece of information is important. It tells you what percentage of the fund is invested in stocks or bonds. Typically, the higher the percentage invested in stocks, the riskier the fund. But it depends on the quality of the stocks or bonds as well, and whether the bonds are short-term or long-term.


tdameritrade mutual funds


Also at the top of the page is a link to the fund’s prospectus. This is a very important document that you need to look over before making a decision. The prospectus contains detailed information on the fund’s expense ratio, other share classes, and the breakdown of the fund’s performance history.

The ‘Summary’ tab on a fund’s profile page displays lots of great details. For example, the top ten holdings in a fund are shown. For example, the American Beacon Balanced Fund (AABPX) has Wells Fargo, ConocoPhillips, and US Treasury bonds as major holdings.


Fifth, Place a Trade


Once you have found a mutual fund that you’re confident in, it’s time to make a purchase. There are convenient green buy and red sell buttons at the top of a fund’s profile. Click on the green buy button, and an order page will appear.

On the order page, the transaction fee, if any, will be displayed. At TD Ameritrade, the transaction fee is $49.99 and is charged only on the buy side. Funds that don’t have this fee must be held at least 180 days; otherwise, the broker will charge a $49.99 short-term redemption fee.

Other important information will be shown for the fund on the order page. These data points include any fund-imposed fees on the front or back side, the cut-off time for the order, and minimum investment amounts for regular and retirement accounts. Retirement accounts usually have lower minimums.


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TD Ameritrade Mutual Funds Buying Cost


Most mutual funds on TD Ameritrade cost $49.95 to buy or sell. However, there are over 2,000 mutual funds at TD Ameritrade that are $0 to buy and sell. Learn more about these funds in TD Ameritrade NTF funds article.


Finally, Monitor Your Investment


Once you have made a purchase, your mutual fund will show up on the positions page inside your TD Ameritrade account. This can be found by navigating to ‘My Account’ in the top menu and selecting ‘Positions.’

Each fund position will display the current NAV, which is the price at which funds are bought and sold. The quantity of shares held will be shown, and all-important total gain or loss will be displayed.


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