VTSAX vs VTI
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VTSAX vs VTI
VTSAX vs VTI:
They are both very similar, than why would anyone invest in VTSAX when you may have to pay Capital gains tax for a MF ?
Only another benefit that I see with VTSAX is Auto Investing.. am I missing something ?
Let me add more information.
I am planning to invest a lumpsum amount (not necessarily looking for Auto Investing) and want to pay capital gains only when I "Sell".
So should I choose the ETF instead of MF ?
They are both very similar, than why would anyone invest in VTSAX when you may have to pay Capital gains tax for a MF ?
Only another benefit that I see with VTSAX is Auto Investing.. am I missing something ?
Let me add more information.
I am planning to invest a lumpsum amount (not necessarily looking for Auto Investing) and want to pay capital gains only when I "Sell".
So should I choose the ETF instead of MF ?
Re: VTSAX vs VTI
VTSAX has same tax efficiency as VTI due to patented process that Vanguard has to transact the MF shares with their equivalent ETF shares.
Re: VTSAX vs VTI
They are not similar. They are identical.newInvestor987654321 wrote: ↑Thu Oct 21, 2021 2:51 pm VTSAX vs VTI:
They are both very similar, than why would anyone invest in VTSAX when you may have to pay Capital gains tax for a MF ?
Only another benefit that I see with VTSAX is Auto Investing.. am I missing something ?
Let me add more information.
I am planning to invest a lumpsum amount (not necessarily looking for Auto Investing) and want to pay capital gains only when I "Sell".
So should I choose the ETF instead of MF ?
As the prior post notes, with Vanguard the two are equally tax efficient. The ETF is slightly less expensive since those are less costly to administer.
Re: VTSAX vs VTI
As noted in the previous replies, Vanguard's index funds are special - they don't distribute capital gains like mutual funds typically do.newInvestor987654321 wrote: ↑Thu Oct 21, 2021 2:51 pm VTSAX vs VTI:
They are both very similar, than why would anyone invest in VTSAX when you may have to pay Capital gains tax for a MF ?
Only another benefit that I see with VTSAX is Auto Investing.. am I missing something ?
Let me add more information.
I am planning to invest a lumpsum amount (not necessarily looking for Auto Investing) and want to pay capital gains only when I "Sell".
So should I choose the ETF instead of MF ?
Whether to choose ETF or mutual fund, consult the Boglehead wiki article ETFs vs mutual fund to learn about the pros & cons.
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Re: VTSAX vs VTI
I would go with VTI. ETFs are the future of investing. Mutual funds are are for old guys like me.
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Re: VTSAX vs VTI
I would go with VTSAX.
The main argument for ETFs over mutual funds is tax efficiency, but that's not an issue for Vanguard mutual funds.
I like Vanguard mutual funds over the ETF equivalents because my dividends get reinvested automatically (avoiding cash drag on returns); I feel like the cash drag issue outweighs saving a few bps on expense ratio in the ETF. I also don't have to worry about bid-ask spreads, or buying an ETF that's trading at a premium to NAV. And if I choose to ever switch to the ETF, I have the option to do so without a tax event. I couldn't switch from the ETF to the mutual fund, it's only one way.
The main argument for ETFs over mutual funds is tax efficiency, but that's not an issue for Vanguard mutual funds.
I like Vanguard mutual funds over the ETF equivalents because my dividends get reinvested automatically (avoiding cash drag on returns); I feel like the cash drag issue outweighs saving a few bps on expense ratio in the ETF. I also don't have to worry about bid-ask spreads, or buying an ETF that's trading at a premium to NAV. And if I choose to ever switch to the ETF, I have the option to do so without a tax event. I couldn't switch from the ETF to the mutual fund, it's only one way.
Re: VTSAX vs VTI
At least at Vanguard, dividends are reinvested into the ETFs at NAV. No cash drag. (At least for their ETFs and other popular 3rd party ones.)Hannibal Barca wrote: ↑Thu Oct 21, 2021 4:41 pm I would go with VTSAX.
The main argument for ETFs over mutual funds is tax efficiency, but that's not an issue for Vanguard mutual funds.
I like Vanguard mutual funds over the ETF equivalents because my dividends get reinvested automatically (avoiding cash drag on returns); I feel like the cash drag issue outweighs saving a few bps on expense ratio in the ETF. I also don't have to worry about bid-ask spreads, or buying an ETF that's trading at a premium to NAV. And if I choose to ever switch to the ETF, I have the option to do so without a tax event. I couldn't switch from the ETF to the mutual fund, it's only one way.
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Re: VTSAX vs VTI
When VTI trades at a premium to NAV, deposit to VTSAX and subsequently convert the shares to VTI to avoid paying a premium to NAV for the ETF shares.
Re: VTSAX vs VTI
I prefer mutual funds in tax advantaged accounts (ease of rebalancing) and ETFs in taxable accounts (ease of tax loss harvesting with non-Vanguard ETFs). They are very similar with the user experience on buying/selling being one of the main differences right now.
Keep in mind you can convert a mutual fund to an ETF in taxable but not the other way around. In a tax advantaged account you can sell or buy as you wish without tax consequences.
Keep in mind you can convert a mutual fund to an ETF in taxable but not the other way around. In a tax advantaged account you can sell or buy as you wish without tax consequences.
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Re: VTSAX vs VTI
OP, you might also be interested in this earlier thread on same topic. I waded in thinking I was all set to convert from VTSAX (and other MFs) to VTI (and corresponding ETFs), and just confirming some details. By the time I got done hearing about and weighing the pros and cons, I had lost much of the motivation to switch (at least in my case). If I was starting out with original purchase, it may have been different, however.
viewtopic.php?f=1&t=355987
viewtopic.php?f=1&t=355987
Re: VTSAX vs VTI
Interesting concept. Have you ever been able to act on it? If so, how did you knew on the day you made the VTSAX purchase that VTI was going to close at a premium to its NAV?Northern Flicker wrote: ↑Thu Oct 21, 2021 5:29 pm When VTI trades at a premium to NAV, deposit to VTSAX and subsequently convert the shares to VTI to avoid paying a premium to NAV for the ETF shares.
Steve
Re: VTSAX vs VTI
To get mutual fund like pricing you can always submit a market-on-open or market-on-close order. Those auctions are deep and determine published opening and closing prices.
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Re: VTSAX vs VTI
I didn't realize that. When you buy ETFs on the Vanguard platform, I guess you're engaging directly with them, not a 3rd party on the exchange? And do you know if it's the same way when selling the ETF?exodusNH wrote: ↑Thu Oct 21, 2021 4:51 pmAt least at Vanguard, dividends are reinvested into the ETFs at NAV. No cash drag. (At least for their ETFs and other popular 3rd party ones.)Hannibal Barca wrote: ↑Thu Oct 21, 2021 4:41 pm I would go with VTSAX.
The main argument for ETFs over mutual funds is tax efficiency, but that's not an issue for Vanguard mutual funds.
I like Vanguard mutual funds over the ETF equivalents because my dividends get reinvested automatically (avoiding cash drag on returns); I feel like the cash drag issue outweighs saving a few bps on expense ratio in the ETF. I also don't have to worry about bid-ask spreads, or buying an ETF that's trading at a premium to NAV. And if I choose to ever switch to the ETF, I have the option to do so without a tax event. I couldn't switch from the ETF to the mutual fund, it's only one way.
Re: VTSAX vs VTI
At least at Vanguard, you can only sell whole shares. Fractional shares are automatically liquidated within a day or two and the proceeds transferred to your settlement account.Hannibal Barca wrote: ↑Thu Oct 21, 2021 8:53 pmI didn't realize that. When you buy ETFs on the Vanguard platform, I guess you're engaging directly with them, not a 3rd party on the exchange? And do you know if it's the same way when selling the ETF?exodusNH wrote: ↑Thu Oct 21, 2021 4:51 pmAt least at Vanguard, dividends are reinvested into the ETFs at NAV. No cash drag. (At least for their ETFs and other popular 3rd party ones.)Hannibal Barca wrote: ↑Thu Oct 21, 2021 4:41 pm I would go with VTSAX.
The main argument for ETFs over mutual funds is tax efficiency, but that's not an issue for Vanguard mutual funds.
I like Vanguard mutual funds over the ETF equivalents because my dividends get reinvested automatically (avoiding cash drag on returns); I feel like the cash drag issue outweighs saving a few bps on expense ratio in the ETF. I also don't have to worry about bid-ask spreads, or buying an ETF that's trading at a premium to NAV. And if I choose to ever switch to the ETF, I have the option to do so without a tax event. I couldn't switch from the ETF to the mutual fund, it's only one way.
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Re: VTSAX vs VTI
Yes, I have done this for a different fund. You cannot be guaranteed that the trading of the ETF will close at a premium, but if the ETF is trading at a premium when you submit the request, buying the ETF at that time would have been at a premium.Longdog wrote: ↑Thu Oct 21, 2021 7:35 pmInteresting concept. Have you ever been able to act on it? If so, how did you knew on the day you made the VTSAX purchase that VTI was going to close at a premium to its NAV?Northern Flicker wrote: ↑Thu Oct 21, 2021 5:29 pm When VTI trades at a premium to NAV, deposit to VTSAX and subsequently convert the shares to VTI to avoid paying a premium to NAV for the ETF shares.
You always buy the MutF shares at NAV, and can submit the request close to market close. You also are saved half the bid-ask spread.
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Re: VTSAX vs VTI
I find mutual funds easier for harvesting losses. You just do a direct exchange from fund A to fund B that is not substantially identical to fund A.stan1 wrote: ↑Thu Oct 21, 2021 5:43 pm I prefer mutual funds in tax advantaged accounts (ease of rebalancing) and ETFs in taxable accounts (ease of tax loss harvesting with non-Vanguard ETFs). They are very similar with the user experience on buying/selling being one of the main differences right now.
Keep in mind you can convert a mutual fund to an ETF in taxable but not the other way around. In a tax advantaged account you can sell or buy as you wish without tax consequences.
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Re: VTSAX vs VTI
Are you thinking you can’t reinvest dividends in an ETF? Because that’s never been the case. Every brokerage I know of let’s you reinvest dividends in an ETF.Hannibal Barca wrote: ↑Thu Oct 21, 2021 4:41 pm I like Vanguard mutual funds over the ETF equivalents because my dividends get reinvested automatically (avoiding cash drag on returns); I feel like the cash drag issue outweighs saving a few bps on expense ratio in the ETF.
No, you’re not buying ETF’s directly from Vanguard (or selling to them the other direction), you’re buying them on the open market from an individual who wants to sell, just like a stock (that’s what the “exchange traded” part means).Hannibal Barca wrote: ↑Thu Oct 21, 2021 8:53 pm When you buy ETFs on the Vanguard platform, I guess you're engaging directly with them, not a 3rd party on the exchange? And do you know if it's the same way when selling the ETF?
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Re: VTSAX vs VTI
There should be a wiki for this.
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Re: VTSAX vs VTI
So is this basically an off-exchange liquidity pool situation? Namely, Vanguard is matching buyers and sellers on its platform, but there's no bid-ask spread, exchange fees (since it's not on an exchange), and NAV issues?TropikThunder wrote: ↑Fri Oct 22, 2021 12:28 amAre you thinking you can’t reinvest dividends in an ETF? Because that’s never been the case. Every brokerage I know of let’s you reinvest dividends in an ETF.Hannibal Barca wrote: ↑Thu Oct 21, 2021 4:41 pm I like Vanguard mutual funds over the ETF equivalents because my dividends get reinvested automatically (avoiding cash drag on returns); I feel like the cash drag issue outweighs saving a few bps on expense ratio in the ETF.
No, you’re not buying ETF’s directly from Vanguard (or selling to them the other direction), you’re buying them on the open market from an individual who wants to sell, just like a stock (that’s what the “exchange traded” part means).Hannibal Barca wrote: ↑Thu Oct 21, 2021 8:53 pm When you buy ETFs on the Vanguard platform, I guess you're engaging directly with them, not a 3rd party on the exchange? And do you know if it's the same way when selling the ETF?
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Re: VTSAX vs VTI
They are not "similar", they are identical. Vanguard Total Stock Market ETF (VTI) is just another share class of the regular mutual fund.newInvestor987654321 wrote: ↑Thu Oct 21, 2021 2:51 pm VTSAX vs VTI:
They are both very similar, than why would anyone invest in VTSAX when you may have to pay Capital gains tax for a MF ?
Only another benefit that I see with VTSAX is Auto Investing.. am I missing something ?
Let me add more information.
I am planning to invest a lumpsum amount (not necessarily looking for Auto Investing) and want to pay capital gains only when I "Sell".
So should I choose the ETF instead of MF ?
Both are very tax-efficient. The regular mutual fund is just as tax-efficient as the ETF share class.
A regular mutual fund has simpler trading mechanics. ETFs trade on a stock exchange. To switch ETFs requires two separate transactions. You sell your ETF on a stock exchange to another investor. Then you buy a new ETF on a stock exchange from a different investor. With a regular mutual funds you can do this in single seamless transaction.
With ETFs you may need to be aware of bid/ask spreads, and might want to use limit orders.
With regular mutual funds you can easily setup both automatic investment of new contributions and automatic reinvestment of dividends and gains.
With either an ETF or a regular mutual fund you pay capital gains when you sell.
Wiki article, ETFs versus mutual funds
"Everything should be as simple as it is, but not simpler." - Albert Einstein |
Wiki article link: Bogleheads® investment philosophy
Re: VTSAX vs VTI
Depends. I hold mutual funds in my retirement accounts because I can invest 100% of my money and not have leftover cash. In my taxable account, I use ETFs. (I don't use a broker that offers fractional shares).
Re: VTSAX vs VTI
With VTSAX I can buy and transfer from my checking account.
With VTI I would first have to transfer from my checking account to the Settlement fund. Then buy from the settlement fund.
With VTI you will always have the "remainder" if you want to buy $1,000, some remainder will be left that stays in your settlement account un-invested.
I know some brokerages allow fractional shares.
The differences are minor, but I find working with ETFs (buy and hold) more difficult.
With VTI I would first have to transfer from my checking account to the Settlement fund. Then buy from the settlement fund.
With VTI you will always have the "remainder" if you want to buy $1,000, some remainder will be left that stays in your settlement account un-invested.
I know some brokerages allow fractional shares.
The differences are minor, but I find working with ETFs (buy and hold) more difficult.
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Re: VTSAX vs VTI
You buy ETFs at Vanguard with a brokerage account. If you buy shares of any ETF at Vanguard, they are functioning as a broker for purchasing the shares just as any other retail broker would. Vanguard has a separate process for converting mutual fund shares to ETF shares which does not involve trading with a counterparty. I don't know if this latter process is used for reinvestment of dividends, but dividends are reinvested at an average intraday price for the ETF.Hannibal Barca wrote: ↑Fri Oct 22, 2021 8:50 amSo is this basically an off-exchange liquidity pool situation? Namely, Vanguard is matching buyers and sellers on its platform, but there's no bid-ask spread, exchange fees (since it's not on an exchange), and NAV issues?TropikThunder wrote: ↑Fri Oct 22, 2021 12:28 amAre you thinking you can’t reinvest dividends in an ETF? Because that’s never been the case. Every brokerage I know of let’s you reinvest dividends in an ETF.Hannibal Barca wrote: ↑Thu Oct 21, 2021 4:41 pm I like Vanguard mutual funds over the ETF equivalents because my dividends get reinvested automatically (avoiding cash drag on returns); I feel like the cash drag issue outweighs saving a few bps on expense ratio in the ETF.
No, you’re not buying ETF’s directly from Vanguard (or selling to them the other direction), you’re buying them on the open market from an individual who wants to sell, just like a stock (that’s what the “exchange traded” part means).Hannibal Barca wrote: ↑Thu Oct 21, 2021 8:53 pm When you buy ETFs on the Vanguard platform, I guess you're engaging directly with them, not a 3rd party on the exchange? And do you know if it's the same way when selling the ETF?
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Re: VTSAX vs VTI
If the price of the MF and ETF are calculated from the NAV (if I understand things correctly), then why if the ETF priced so much higher than the MF?
"Let me explain. No, there is too much. Let me sum up." (Inigo Montoya) |
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Re: VTSAX vs VTI
Why do 2-liter bottles of Coke cost more than 12-ounce cans?
Meet my pet, Peeve, who loves to convert non-acronyms into acronyms: FED, ROTH, CASH, IVY, ...
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Re: VTSAX vs VTI
+1. This is why I buy VTSAX.Northern Flicker wrote: ↑Fri Oct 22, 2021 12:05 amI find mutual funds easier for harvesting losses. You just do a direct exchange from fund A to fund B that is not substantially identical to fund A.stan1 wrote: ↑Thu Oct 21, 2021 5:43 pm I prefer mutual funds in tax advantaged accounts (ease of rebalancing) and ETFs in taxable accounts (ease of tax loss harvesting with non-Vanguard ETFs). They are very similar with the user experience on buying/selling being one of the main differences right now.
Keep in mind you can convert a mutual fund to an ETF in taxable but not the other way around. In a tax advantaged account you can sell or buy as you wish without tax consequences.
Re: VTSAX vs VTI
Mutual funds trade at closing NAV regardless of whatever intraday gyrations that go on, and without the market spreads.
It's trivial amount, but when selling a mutual fund you don't get the SEC transaction fees stocks and ETFs get when trading directly (on top of the fees the fund itself is paying internally for transactions of its holdings).
Mutual funds have a shorter settlement period for the funds when buysing/selling.
While some brokers allow for fractional share trading, it's not available everywhere, and mutual funds allow you to buy/sell fractional amounts for any dollar amount.
I'm sure there's differences for different people, but when I create buy/sell orders there's always a bit of anxiety mixed with the thrill of being in the game along with some nuisance of having to sometimes play around with the limits to get something that executes... Mutual funds allow for a more hands-off automatic approach.
You don't necessarily have to have a brokerage account to buy a mutual fund.
It's trivial amount, but when selling a mutual fund you don't get the SEC transaction fees stocks and ETFs get when trading directly (on top of the fees the fund itself is paying internally for transactions of its holdings).
Mutual funds have a shorter settlement period for the funds when buysing/selling.
While some brokers allow for fractional share trading, it's not available everywhere, and mutual funds allow you to buy/sell fractional amounts for any dollar amount.
I'm sure there's differences for different people, but when I create buy/sell orders there's always a bit of anxiety mixed with the thrill of being in the game along with some nuisance of having to sometimes play around with the limits to get something that executes... Mutual funds allow for a more hands-off automatic approach.
You don't necessarily have to have a brokerage account to buy a mutual fund.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham
Re: VTSAX vs VTI
The price of one share is irrelevant.BMWrider1986 wrote: ↑Sat Oct 23, 2021 7:05 amIf the price of the MF and ETF are calculated from the NAV (if I understand things correctly), then why if the ETF priced so much higher than the MF?
If you hold VTSAX at Vanguard and as them to convert you from VTSAX to VTI, you will wind up with the same dollar amount in VTI, just a different number of shares.
Occasionally, the ETF or mutual fund will go through a split to keep the per-share price lower. With mutual funds, it doesn't really matter since you have always been able to buy in exact dollar amounts above some threshold.
I wish Vanguard would split more ETFs, since their platform only allows purchasing whole shares (minus DRIP.) Other brokerages support fractional ETFs.
Re: VTSAX vs VTI
Vanguard has a document https://www.vanguard.com/pdf/etfpdf.pdf that lets you "Find out which Vanguard index mutual funds
can be converted tax-free to Vanguard ETFs".
Curious which mutual funds are you interested in having an ETF share class for?
Re: VTSAX vs VTI
I was saying I wished they'd split some of their ETFs (e.g. the ones over $100/share) so make it easier for regular weekly buys and for allocating in an IRA. They don't support purchasing fractional ETF shares except as distribution reinvestments.sycamore wrote: ↑Mon Oct 25, 2021 11:00 amVanguard has a document https://www.vanguard.com/pdf/etfpdf.pdf that lets you "Find out which Vanguard index mutual funds
can be converted tax-free to Vanguard ETFs".
Curious which mutual funds are you interested in having an ETF share class for?
Re: VTSAX vs VTI
I get it nowexodusNH wrote: ↑Mon Oct 25, 2021 11:32 amI was saying I wished they'd split some of their ETFs (e.g. the ones over $100/share) so make it easier for regular weekly buys and for allocating in an IRA. They don't support purchasing fractional ETF shares except as distribution reinvestments.sycamore wrote: ↑Mon Oct 25, 2021 11:00 amVanguard has a document https://www.vanguard.com/pdf/etfpdf.pdf that lets you "Find out which Vanguard index mutual funds
can be converted tax-free to Vanguard ETFs".
Curious which mutual funds are you interested in having an ETF share class for?
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Re: VTSAX vs VTI
This is simply because the initial (arbitrary) price for VTI per share was higher than the price per share of VTSAX. They’ve had the same return ever since though.BMWrider1986 wrote: ↑Sat Oct 23, 2021 7:05 amIf the price of the MF and ETF are calculated from the NAV (if I understand things correctly), then why if the ETF priced so much higher than the MF?
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Re: VTSAX vs VTI
Do other ETF providers do that?exodusNH wrote: ↑Mon Oct 25, 2021 11:32 amI was saying I wished they'd split some of their ETFs (e.g. the ones over $100/share) so make it easier for regular weekly buys and for allocating in an IRA. They don't support purchasing fractional ETF shares except as distribution reinvestments.sycamore wrote: ↑Mon Oct 25, 2021 11:00 amVanguard has a document https://www.vanguard.com/pdf/etfpdf.pdf that lets you "Find out which Vanguard index mutual funds
can be converted tax-free to Vanguard ETFs".
Curious which mutual funds are you interested in having an ETF share class for?
Re: VTSAX vs VTI
Many other brokerages support fractional shares of both stocks and ETFs, or at least the widely-traded ones.anon_investor wrote: ↑Mon Oct 25, 2021 3:08 pmDo other ETF providers do that?exodusNH wrote: ↑Mon Oct 25, 2021 11:32 amI was saying I wished they'd split some of their ETFs (e.g. the ones over $100/share) so make it easier for regular weekly buys and for allocating in an IRA. They don't support purchasing fractional ETF shares except as distribution reinvestments.sycamore wrote: ↑Mon Oct 25, 2021 11:00 amVanguard has a document https://www.vanguard.com/pdf/etfpdf.pdf that lets you "Find out which Vanguard index mutual funds
can be converted tax-free to Vanguard ETFs".
Curious which mutual funds are you interested in having an ETF share class for?
Re: VTSAX vs VTI
At Fidelity, I buy VTI with fractional shares (if needed). For example, I can sell $1k of ITOT and buy $1k of VTI during a TLH event.anon_investor wrote: ↑Mon Oct 25, 2021 3:08 pmDo other ETF providers do that?exodusNH wrote: ↑Mon Oct 25, 2021 11:32 amI was saying I wished they'd split some of their ETFs (e.g. the ones over $100/share) so make it easier for regular weekly buys and for allocating in an IRA. They don't support purchasing fractional ETF shares except as distribution reinvestments.sycamore wrote: ↑Mon Oct 25, 2021 11:00 amVanguard has a document https://www.vanguard.com/pdf/etfpdf.pdf that lets you "Find out which Vanguard index mutual funds
can be converted tax-free to Vanguard ETFs".
Curious which mutual funds are you interested in having an ETF share class for?
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Re: VTSAX vs VTI
I know about fractional ETF purchases, I have a Fidelity account where I can do that. But I meant, do other ETF providers bother doing splits to lower their ETF share prices? I know companies do this for their stock price, notably Apple and TSLA did this recently.exodusNH wrote: ↑Mon Oct 25, 2021 3:15 pmMany other brokerages support fractional shares of both stocks and ETFs, or at least the widely-traded ones.anon_investor wrote: ↑Mon Oct 25, 2021 3:08 pmDo other ETF providers do that?exodusNH wrote: ↑Mon Oct 25, 2021 11:32 amI was saying I wished they'd split some of their ETFs (e.g. the ones over $100/share) so make it easier for regular weekly buys and for allocating in an IRA. They don't support purchasing fractional ETF shares except as distribution reinvestments.sycamore wrote: ↑Mon Oct 25, 2021 11:00 amVanguard has a document https://www.vanguard.com/pdf/etfpdf.pdf that lets you "Find out which Vanguard index mutual funds
can be converted tax-free to Vanguard ETFs".
Curious which mutual funds are you interested in having an ETF share class for?
Re: VTSAX vs VTI
Vanguard did it for 3 funds in March 2021. I don't know how often that happens in general.anon_investor wrote: ↑Mon Oct 25, 2021 3:28 pm I know about fractional ETF purchases, I have a Fidelity account where I can do that. But I meant, do other ETF providers bother doing splits to lower their ETF share prices? I know companies do this for their stock price, notably Apple and TSLA did this recently.
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Re: VTSAX vs VTI
Really? Which ones? I am buying ITOT in my Merrill Edge account because the share price of VTI is too high, and I am only buying ITOT with cash back from my BoA CCs, so I don't want to have to add external money. At Vanguard I can just buy VTSAX and at Fidelity I can buy fractional shares of VTI.exodusNH wrote: ↑Mon Oct 25, 2021 3:38 pmVanguard did it for 3 funds in March 2021. I don't know how often that happens in general.anon_investor wrote: ↑Mon Oct 25, 2021 3:28 pm I know about fractional ETF purchases, I have a Fidelity account where I can do that. But I meant, do other ETF providers bother doing splits to lower their ETF share prices? I know companies do this for their stock price, notably Apple and TSLA did this recently.
Re: VTSAX vs VTI
https://lmgtfy.app/?q=vanguard+etf+splitanon_investor wrote: ↑Mon Oct 25, 2021 3:41 pmReally? Which ones? I am buying ITOT in my Merrill Edge account because the share price of VTI is too high, and I am only buying ITOT with cash back from my BoA CCs, so I don't want to have to add external money. At Vanguard I can just buy VTSAX and at Fidelity I can buy fractional shares of VTI.exodusNH wrote: ↑Mon Oct 25, 2021 3:38 pmVanguard did it for 3 funds in March 2021. I don't know how often that happens in general.anon_investor wrote: ↑Mon Oct 25, 2021 3:28 pm I know about fractional ETF purchases, I have a Fidelity account where I can do that. But I meant, do other ETF providers bother doing splits to lower their ETF share prices? I know companies do this for their stock price, notably Apple and TSLA did this recently.
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Re: VTSAX vs VTI
exodusNH wrote: ↑Mon Oct 25, 2021 4:03 pmhttps://lmgtfy.app/?q=vanguard+etf+splitanon_investor wrote: ↑Mon Oct 25, 2021 3:41 pmReally? Which ones? I am buying ITOT in my Merrill Edge account because the share price of VTI is too high, and I am only buying ITOT with cash back from my BoA CCs, so I don't want to have to add external money. At Vanguard I can just buy VTSAX and at Fidelity I can buy fractional shares of VTI.exodusNH wrote: ↑Mon Oct 25, 2021 3:38 pmVanguard did it for 3 funds in March 2021. I don't know how often that happens in general.anon_investor wrote: ↑Mon Oct 25, 2021 3:28 pm I know about fractional ETF purchases, I have a Fidelity account where I can do that. But I meant, do other ETF providers bother doing splits to lower their ETF share prices? I know companies do this for their stock price, notably Apple and TSLA did this recently.
Re: VTSAX vs VTI
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Re: VTSAX vs VTI
Since the thread was bounced I'll add that the strategy of buying the mutual fund and converting shares when the ETF is trading at a premium may not work as expected with ex-US funds due to fair value pricing models.Northern Flicker wrote: ↑Fri Oct 22, 2021 12:01 amYes, I have done this for a different fund. You cannot be guaranteed that the trading of the ETF will close at a premium, but if the ETF is trading at a premium when you submit the request, buying the ETF at that time would have been at a premium.Longdog wrote: ↑Thu Oct 21, 2021 7:35 pmInteresting concept. Have you ever been able to act on it? If so, how did you knew on the day you made the VTSAX purchase that VTI was going to close at a premium to its NAV?Northern Flicker wrote: ↑Thu Oct 21, 2021 5:29 pm When VTI trades at a premium to NAV, deposit to VTSAX and subsequently convert the shares to VTI to avoid paying a premium to NAV for the ETF shares.
You always buy the MutF shares at NAV, and can submit the request close to market close. You also are saved half the bid-ask spread.
Last edited by Northern Flicker on Mon Jul 31, 2023 12:15 pm, edited 1 time in total.
Re: VTSAX vs VTI
What do you mean?Northern Flicker wrote: ↑Mon Jul 31, 2023 12:09 am Since the thread was bounced I'll add that the strategy of buying the mutual fund and concerting shares when the ETF is trading at a premium may not work as expected with ex-US funds due to fair value pricing models.
Re: VTSAX vs VTI
Sell A.
Buy B.
With ETFs, those are two transactions separated by some amount of time.
With MF, transactions happen at the end of the day. Vanguard allows transactions between their mutual funds.
Re: VTSAX vs VTI
That was not a concern or "worry" for me. My post was from 2021. Now Vanguard allows Vanguard ETFs to be bought and sold in dollars in addition to shares. Still two transactions rather than one but without the step of calculating the number of shares to buy and having up to several hundred dollars sitting in cash after rebalancing. Things change, today I wouldn't write what I did in 2021 (and even then it was more of a personal preference rather than a major point). But we do still have mutual funds in spouse's retirement accounts because they are understood, spouse understands how to buy/sell mutual fund shares but not ETF shares so leaving those accounts as is.
Re: VTSAX vs VTI
Dollar amount investing in Vanguard's ETFs was a welcome change in the tax-advantaged accounts. It works well as long as you don't get annoyed at a few pennies being left behind due to rounding. (I do. It's irrational. I keep the S&P 500 mutual fund in my IRA to mop up the leftovers.)stan1 wrote: ↑Mon Jul 31, 2023 8:58 amThat was not a concern or "worry" for me. My post was from 2021. Now Vanguard allows Vanguard ETFs to be bought and sold in dollars in addition to shares. Still two transactions rather than one but without the step of calculating the number of shares to buy and having up to several hundred dollars sitting in cash after rebalancing. Things change, today I wouldn't write what I did in 2021 (and even then it was more of a personal preference rather than a major point). But we do still have mutual funds in spouse's retirement accounts because they are understood, spouse understands how to buy/sell mutual fund shares but not ETF shares so leaving those accounts as is.
I avoid it in taxable because Vanguard's individual lot management is a joke. Maybe one day they'll fix it, but it's nearly unusable right now.
Re: VTSAX vs VTI
Do you genuinely mean this? Are you saying there are people who pick the mutual fund over an ETF for this reason? or are you just taking out a magnifying glass and looking for microscopic differences?
Please be serious.