These 3 ETFs Replace the In-House Funds Your Broker Filled Your Account With

You’re 68 and retired, and every fund on your brokerage statement has the same name on it. The large-cap fund, the international fund, and the income fund all come from the firm that holds your account. A broker picked them years ago, and you have probably never seen what they cost you each year. Three iShares Core ETFs from BlackRock cover the same ground for very little: the iShares Core S&P 500 ETF (NYSEARCA:IVV), the iShares Core MSCI EAFE ETF (CBOE:IEFA) and the iShares Core U.S. Aggregate Bond ETF (NYSEARCA:AGG).

How to Spot an In-House Fund and Its Hidden Cost

If the fund family shares your brokerage firm’s name, the fund is likely proprietary. These funds often charge higher expense ratios, sales loads, or ongoing distribution fees. The fees come straight out of your returns without a separate bill. Find each fund’s prospectus and look for the expense ratio and any sales charge.

Fees also compound. On a $100,000 account, each 1% in annual fees costs you $1,000 a year. At a 0.03% expense ratio, the same $100,000 costs about $30.

IVV Replaces Your Large-Cap Stock Fund

IVV tracks the S&P 500, which holds the largest U.S. companies. It covers the same ground as an in-house “large-cap,” “blue chip,” or “core equity” fund. The expense ratio is 0.03%, so you keep $9,997 of every $10,000 working for you each year. Launched in 2000, it held about $888 billion in net assets as of June 30, 2026.

IVV pays quarterly. Its trailing 12-month distributions of $8.40 per share work out to a yield of about 1.1% at a recent price near $757.90. Its adjusted price rose 72.75% over five years and 314.81% over 10 years.

The trade-off: the index weights companies by size, so a few of the largest U.S. companies drive most of your returns. Prices also move. IVV fell 2.91% over the past month.

IEFA Covers Your International Fund

IEFA owns large, mid-size, and small companies in developed markets outside the U.S. and Canada. Japan makes up 24.37% of the fund, and the U.K. 14.67%. By sector, financials (22.67%) and industrials (19.77%) lead. The expense ratio is 0.07%, or about $70 a year on $100,000. Net assets were about $190 billion as of July 31, 2026, and Morningstar recently gave the fund a Gold rating.

IEFA pays twice a year, and its trailing distributions of $3.29 per share come to a yield of about 3.4%. Over the past year, it returned 15.68%, ahead of IVV’s 13.86%.

The trade-off: currency moves can add to or subtract from your returns, and the fund leaves out emerging markets entirely.

AGG Steps In for Your Bond or Income Fund

AGG tracks the Bloomberg U.S. Aggregate Bond Index, which covers the broad investment-grade U.S. bond market: Treasuries, agency mortgage bonds, and high-quality corporate bonds. That’s the core of most in-house “income” funds. The expense ratio is 0.03%.

For a retiree, the payout schedule matters. AGG pays monthly, and its trailing 12-month distributions of $3.98 per share put the yield near 4.1%.

The catch: bond prices fall when interest rates rise. AGG’s adjusted price slipped 0.93% over five years. More recently, the 10-year Treasury yield fell from 5.31% on Oct. 5 to 4.84% on Nov. 5, and AGG gained 2.77% over the past month.

What to Check Before Switching Funds

• Check for back-end sales charges. Some in-house funds charge you to sell within a set number of years.
• Know your account type. In a taxable account, selling can trigger capital gains taxes. The IRS notes that its investment income rules do not apply to investments held in IRAs, so swapping funds inside an IRA doesn’t create a tax bill.
• Ask about transfers. If you plan to move to another brokerage, you may not be able to transfer some proprietary funds in kind. In that case, you’d have to sell them first.

Keep Your Mix and Cut the Bill

Switching has a real trade-off. Nobody will rebalance them for you, and none will try to beat its index. You get the market’s return, minus a very small fee. Some retirees value the hand-holding that came with the broker’s lineup, and that service had a price.

At 68, every dollar you pay in fees comes straight out of your retirement income. IVV, IEFA and AGG cover the same three building blocks your broker chose: U.S. stocks, developed-market international stocks and investment-grade bonds. The difference is that you can see exactly what each one holds and what it costs you each year.

Contact [email protected] for any questions or corrections.