Given the following situation:
- an employer-offered "Simple IRA" run by a major brokerage with 1% gross pay matching;
- No near-future feasible opportunity to invest the Simple IRA contribution in a no-load index fund because of high minimums;
- the option of buying A or C shares of virtually any mutual fund available, so long as it isn't no-load;
- a transaction fee of $50 per ten shares on stocks, including ETFs; and no option to go somewhere other than the specific brokerage without forgoing the 1% matching,
What is the optimal strategy in this situation for someone who ideally would invest in a passive index fund like Vanguard's VFINX with minimal frictional costs?
- ETFs, even though they have the relatively high transaction fee? If so, how should the transactions be spaced so as to minimize the frictional costs?
- A mutual fund with a load of some sort, even though they will have fees of their own and (AFAIK) have poorer performance than an index fund and generally are not passive?
- Forgo the matching and just save a certain percentage of income in an index fund privately?
- Some other strategy altogether?
Edit: generalized the question, took out the explanation of A and C shares (someone please let me know if they are not standardized and thus the brokerage might have a unique fee structure for them that would change the optimal strategy). Not looking for specific buy/sell recommendations, e.g. I just want something as close to index funds like VFINX or VOO as possible. If it turns out the best strategy is a brokerage-exclusive discount on iShares' IVV, that works just as well. Thanks for all the responses so far.