Kbg wrote: ↑Sat Apr 11, 2020 8:12 pm
SIPC is about the brokerage...mutual funds vs. ETFs is a function of the sponsoring company and the risks are different there. Granted, a lot of the larger brokerages are also mutual fund and ETF providers. If someone is really interested in the risks when the two overlap, please feel free to do the research and report back. It would be something I would be interested in and most likely it would take a securities lawyer to educate us.
I'm fairly certain that this has been a fairly recent topic of discussion here. Let me see if I can find it.
It looks like it was discussed here:
viewtopic.php?f=4&t=9978
From mathjak:
by mathjak107 » Sat Dec 07, 2019 4:12 am
FEW REALIZE THIS :
if you ever check your vanguard statement or fidelity they read :
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" SIPC insurance provides protection for assets held by you in a Vanguard Brokerage account. Vanguard Brokerage Services is a division of Vanguard Marketing Corporation, which is a member of SIPC...
Vanguard mutual funds, including any Vanguard money market fund linked to your Vanguard Brokerage account, are not covered by SIPC insurance."
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"If you buy mutual funds through a brokerage account, those funds are protected against theft by SIPC.
However, if you buy mutual funds directly from a mutual fund company, they are not protected by SIPC, because no protection is necessary : . Each mutual fund is set up as a separate entity, apart from the company that manages the fund. ""The employees at a mutual fund don't have direct access to the assets,All mutual fund assets by law must be held in a trust account at a custodian bank. "
That is a special account, not part of the bank's assets. The bank can fail, but the trust accounts are not involved in any way shape or form in that failure ...
https://www.bogleheads.org/wiki/SIPC_pr ... tual_funds
Vinny