Mutual fund vs. ETF accumulation and withdrawal

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freedom66
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Mutual fund vs. ETF accumulation and withdrawal

Post by freedom66 »

I read the boglehead wiki on “ETFs vs mutual funds” along with various postings and I still have a fundamental question:

The current expense ratio of VTI (Vanguard Total Stock Market Index ETF) is 0.03% and VTSAX (Vanguard Total Stock Market Index Admiral Shares) is 0.04%. For a high balance ($millions) for decades, this difference is significant in total expenses paid. There are various online calculators that can be used to compare results of different expense ratios to calculate this. But the bogleheads wiki says that:

“ETFs also incur a penalty from bid/ask spreads in the market, typically in the 0.01% - 0.1% range (varying with fund size and popularity) and a premium/discount to net asset value(NAV) that can vary from negligible to highly significant.”

My question is: For a shareholder with a high balance and holding/selling the assets at Vanguard that intends to hold for perhaps 15-20 years before beginning periodic withdrawals for perhaps 15-20 years, which is actually the better overall vehicle for overall expenses between the mutual fund and ETF? Is the advantage of expense ratio while holding the asset (0.01%) offset, or even more than offset (0.01% - 0.1%), by the disadvantages while selling (bid/ask spread and premium/discount factors)? This question specifically pertains to VTI vs. VTSAX.

Thank you.
nalor511
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Re: Mutual fund vs. ETF accumulation and withdrawal

Post by nalor511 »

ETF, bid/ask and premium are over hyped, NAV is just an estimate, those things all come out about even. But you WILL save around 25% on the ER by choosing ETF. And you will be able to move it to another broker easily should you ever need to do so. NO downsides IMO, if you spend 5 minutes learning about ETF and tips and gotchas
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David Jay
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Re: Mutual fund vs. ETF accumulation and withdrawal

Post by David Jay »

freedom66 wrote: Sun Dec 05, 2021 2:57 pmThe current expense ratio of VTI (Vanguard S&P500 Index ETF) is 0.03% and VFIAX (Vanguard S&P500 Index Admiral Shares) is 0.04%. For a high balance ($millions) for decades, this difference is significant in total expenses paid.
I reject that this is “significant”, .01% amounts to $100 per year per million invested which is just noise.

But VFIAX VTSAX underperforms the index by .24 due to income from loans.

(edited to reflect OP edit)
Last edited by David Jay on Sun Dec 05, 2021 3:41 pm, edited 1 time in total.
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Re: Mutual fund vs. ETF accumulation and withdrawal

Post by nalor511 »

David Jay wrote: Sun Dec 05, 2021 3:15 pm
freedom66 wrote: Sun Dec 05, 2021 2:57 pmThe current expense ratio of VTI (Vanguard S&P500 Index ETF) is 0.03% and VFIAX (Vanguard S&P500 Index Admiral Shares) is 0.04%. For a high balance ($millions) for decades, this difference is significant in total expenses paid.
I reject that this is “significant”, .01% amounts to $100 per year per million invested which is just noise.

But VFIAX underperforms the index by less than .04 due to income from loans, the effective fund performance is closer to .025.
The correct ETF is VOO to compare with MF VFIAX
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Re: Mutual fund vs. ETF accumulation and withdrawal

Post by livesoft »

The bid/ask spread of things like VTI and VOO are 1 cent. 1 cent out of $231 is about 0.004%.

That probably rounds up to 0.01% seen here: https://advisors.vanguard.com/investments/bidaskspread A good broker will keep it closer to the 1 cent range and one often splits the difference or closer to half a cent. How about your trades? What have you seen?

Bottom line: I do not worry about bid/ask spread. It is something that mutual fund lovers and ETF haters like to highlight.
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freedom66
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Re: Mutual fund vs. ETF accumulation and withdrawal

Post by freedom66 »

I reject that this is “significant”, .01% amounts to $100 per year per million invested which is just noise.

But VFIAX underperforms the index by less than .04 due to income from loans, the effective fund performance is closer to .025.
Sorry, yes I made a mistake on the funds and have corrected it. I am comparing VTSAX and VTI

I used an expense ratio calculator for:
Initial investment of $3 million,
adding $12K per year
for 20 years and assuming 9% return

Expenses for 0.04% are $126,212
Expenses for 0.03% are $94,741
a difference of $31,471

However, if VTSAX has an effective expense ratio closer to 0.025, then it is superior to its ETF twin. I never heard of this before, that income from loans effectively lessens the expense ratio. Where can I read about this?
Last edited by freedom66 on Sun Dec 05, 2021 4:02 pm, edited 1 time in total.
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Re: Mutual fund vs. ETF accumulation and withdrawal

Post by Makefile »

You do realize, when taking "expense ratios matter" to this extreme, that Fidelity has index funds with an ER of zero?
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Re: Mutual fund vs. ETF accumulation and withdrawal

Post by freedom66 »

The bid/ask spread of things like VTI and VOO are 1 cent. 1 cent out of $231 is about 0.004%.

That probably rounds up to 0.01% seen here: https://advisors.vanguard.com/investments/bidaskspread A good broker will keep it closer to the 1 cent range and one often splits the difference or closer to half a cent. How about your trades? What have you seen?

Bottom line: I do not worry about bid/ask spread. It is something that mutual fund lovers and ETF haters like to highlight.
I have not sold, so I do not know first-hand. I have about $3 million in VTSAX and $3 million in VTI and I am considering moving all to VTI for the expense ratio advantage I think it has.
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Re: Mutual fund vs. ETF accumulation and withdrawal

Post by Makefile »

freedom66 wrote: Sun Dec 05, 2021 3:48 pm
The bid/ask spread of things like VTI and VOO are 1 cent. 1 cent out of $231 is about 0.004%.

That probably rounds up to 0.01% seen here: https://advisors.vanguard.com/investments/bidaskspread A good broker will keep it closer to the 1 cent range and one often splits the difference or closer to half a cent. How about your trades? What have you seen?

Bottom line: I do not worry about bid/ask spread. It is something that mutual fund lovers and ETF haters like to highlight.
I have not sold, so I do not know first-hand. I have about $3 million in VTSAX and $3 million in VTI and I am considering moving all to VTI for the expense ratio advantage I think it has.
Assuming you're holding VTSAX at Vanguard, you have a conversion privilege and can call them up and switch your existing shares to VTI tax-free. You certainly shouldn't sell and re-buy if that's implied
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Re: Mutual fund vs. ETF accumulation and withdrawal

Post by freedom66 »

You do realize, when taking "expense ratios matter" to this extreme, that Fidelity has index funds with an ER of zero?
Yes I do. But I have owned my fund and ETF for many years in a taxable account and so there are significant capital gains. I cannot switch (to, for example, a Fidelity fund) at this point without incurring highly significant capital gains taxes. But I can switch tax-free from VTSAX to VTI.

It does seem on the surface that the difference in expense ratios are small, however with a lot invested over a long time, it could be a lot (over $30K difference in my calculations which of course make assumptions). $30K isn’t a lot as compared to $3 million, but it is a significant amount of money that can be gained.
Last edited by freedom66 on Sun Dec 05, 2021 3:55 pm, edited 1 time in total.
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Re: Mutual fund vs. ETF accumulation and withdrawal

Post by freedom66 »

Assuming you're holding VTSAX at Vanguard, you have a conversion privilege and can call them up and switch your existing shares to VTI tax-free. You certainly shouldn't sell and re-buy if that's implied
Yes, I hold at both at Vanguard in a taxable account and I would switch tax-free. But I desire to make the correct choice because it is a one-way street.
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Re: Mutual fund vs. ETF accumulation and withdrawal

Post by sycamore »

freedom66 wrote: Sun Dec 05, 2021 3:44 pm ...
However, if VTSAX has an effective fund performance closer to 0.025, then it is superior to its ETF twin. I never heard of this before, that income from loans effectively lessens the expense ratio. Where can I read about this?
VTSAX and VTI ETF are both part of the same fund (just different share classes). I don't know that one share classes benefits "more" from securities lending than another share class. I would guess that securities lending is done at the fund level, and each share class benefits proportionally in relation to its assets.

Some info at the Bogleheads wiki: https://www.bogleheads.org/wiki/Securities_lending

More info about it in the Bogleheads blog: https://www.bogleheads.org/blog/tag/security-lending/
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Re: Mutual fund vs. ETF accumulation and withdrawal

Post by Makefile »

freedom66 wrote: Sun Dec 05, 2021 3:53 pm
Assuming you're holding VTSAX at Vanguard, you have a conversion privilege and can call them up and switch your existing shares to VTI tax-free. You certainly shouldn't sell and re-buy if that's implied
Yes, I hold at both at Vanguard in a taxable account and I would switch tax-free. But I desire to make the correct choice because it is a one-way street.
When converting, the only thing you "lose" is Vanguard's obligation to buy the shares back from you at some future date at closing net asset value for that day. You will only be able to sell them to someone else at whatever the market price is.

The whole ETF stucture (authorized participants, etc.) is designed to keep the market price and NAV in alignment. There have been posts about them getting out of alignment (March 2020) but that was for certain bond funds, not broad market stocks like this. And even then, it was debatable as to whether the ETF market price was too low, or the mutual fund NAV was too high for those funds. Poster alex_686 has posted a lot about how that works.

I wonder to what degree the bid/ask and premium/discount issues mentioned in the wiki have reduced over time, and what the future trajectory is. It seems all the robo-advisers use ETFs, and that a lot of 20-somethings starting investing have never heard of a mutual fund.

Remember that with mutual funds you always get the closing price for the day, while with ETFs you get market/limit price at that time. I bet the difference between those dwarfs the bid/ask-spread and premium/discount that you mention.
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Re: Mutual fund vs. ETF accumulation and withdrawal

Post by freedom66 »

Remember that with mutual funds you always get the closing price for the day, while with ETFs you get market/limit price at that time. I bet the difference between those dwarfs the bid/ask-spread and premium/discount that you mention.
Yes I also wonder a lot about this because I see, for example at 6 pm, that VTI can be significantly higher or lower in percentage gain/loss than VTSAX. You are right - the differences almost always dwarf the discounts I mentioned. That is also a big concern of mine when it comes time to selling VTI down the road. And thus a concern of mine before I switch my large second account from VTSAX to VTI.
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Re: Mutual fund vs. ETF accumulation and withdrawal

Post by David Jay »

freedom66 wrote: Sun Dec 05, 2021 3:44 pmHowever, if VTSAX has an effective expense ratio closer to 0.025, then it is superior to its ETF twin. I never heard of this before, that income from loans effectively lessens the expense ratio. Where can I read about this?
This post will give specific VTSAX overperformance numbers from last year but the entire thread will be useful: viewtopic.php?p=5643516#p5643516
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Re: Mutual fund vs. ETF accumulation and withdrawal

Post by freedom66 »

shess wrote: ↑Mon Dec 07, 2020 2:36 pm
David Jay wrote: ↑Mon Dec 07, 2020 12:55 pm
galawdawg wrote: ↑Mon Dec 07, 2020 12:50 pm
The expense ratio of VTI has only been lower than VTSAX since Oct 2019, 0.03% vs 0.04%.

And one year returns? VTSAX beat VTI by 0.02%. VTSAX kept up with the benchmark (Spliced Total Stock Market Index), VTI trailed the same benchmark by 0.02%.

I'm staying the course!
This!

When you are talking hundredths of one percent, execution performance can make the difference.
Since VTSAX and VTI are literally the same underlying portfolio (I don't mean target, they are two share classes on the same investment pool), I feel like execution isn't going to make a sustained difference. If the market is efficient over time, you can expect that 0.02% to be reclaimed in the following year, assuming the difference isn't actually a rounding issue or time series difference or something.
VTSAX has consistently outperformed it's index - over the past several years the fund indicates a .04% expense ratio but performs about .016% below the index, meaning it is outperforming it's claimed expense ratio by about .026%.

I suspect that the creation/dissolution of ETF shares is not cost-free. It doesn't take much cost to change performance by one or two basis points.
David, Thank you for the link and thoughts. I see that historically, albeit for a short timeframe, despite the lower advertised expense ratio of VTI that VTSAX has had the actual advantage in return.
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Re: Mutual fund vs. ETF accumulation and withdrawal

Post by livesoft »

I thought it would be fun to review a VTI trade that I did at the opening cross on the morning of Tuesday August 25, 2015. I sold a lot of shares in VTI with no bid/ask spread at the opening cross. VTI closed about 4.5% LOWER that day. That is, I outdid a VTSAX mutual fund seller by 4.5% because I sold earlier in the day. That 4.5% would overwhelm any longterm variations in bid/ask spread and premium/discount numbers.

Here's the original link where this was discussed in real-time:
viewtopic.php?p=2601576#p2601576

The main point is that variations in the prices of the ETF shares throughout the day will overwhelm any slight differences in spreads. Also no matter how one looks up historical prices for VTI, the price that an investor actually received on a buy or sell transaction cannot be known from published numbers unless one has access to the actual transactions. And every investor will have different historical data. Thus, any backtesting or modellng will just be useless I think.
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Re: Mutual fund vs. ETF accumulation and withdrawal

Post by Northern Flicker »

Securities lending will cover some or all of the ER of a typical index fund. Both VTSAX and VTI will get the same benefit, so this will be a wash.

You can deposit to the mutual fund and have Vanguard convert the shares to ETF shares at NAV. Then there is no bid-ask spread or market price at premium to NAV to worry about. Vanguard does use a fair value pricing method for the mutual fund shares that may negate the benefit of the method, but depositing to the mutual fund and converting to ETF shares is a good strategy.

If and when the ETF is trading at a discount to NAV, buy the ETF shares directly.
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Re: Mutual fund vs. ETF accumulation and withdrawal

Post by 22twain »

freedom66 wrote: Sun Dec 05, 2021 3:44 pm
I reject that this is “significant”, .01% amounts to $100 per year per million invested which is just noise.
I used an expense ratio calculator for:
Initial investment of $3 million,
adding $12K per year
for 20 years and assuming 9% return

Expenses for 0.04% are $126,212
Expenses for 0.03% are $94,741
a difference of $31,471
What is the final amount of the investments, and the percentage of this that $31,471 represents? How much difference will it make in whatever end use you put the money to?
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Re: Mutual fund vs. ETF accumulation and withdrawal

Post by Ferdinand2014 »

freedom66 wrote: Sun Dec 05, 2021 2:57 pm I read the boglehead wiki on “ETFs vs mutual funds” along with various postings and I still have a fundamental question:

The current expense ratio of VTI (Vanguard Total Stock Market Index ETF) is 0.03% and VTSAX (Vanguard Total Stock Market Index Admiral Shares) is 0.04%. For a high balance ($millions) for decades, this difference is significant in total expenses paid. There are various online calculators that can be used to compare results of different expense ratios to calculate this. But the bogleheads wiki says that:

“ETFs also incur a penalty from bid/ask spreads in the market, typically in the 0.01% - 0.1% range (varying with fund size and popularity) and a premium/discount to net asset value(NAV) that can vary from negligible to highly significant.”

My question is: For a shareholder with a high balance and holding/selling the assets at Vanguard that intends to hold for perhaps 15-20 years before beginning periodic withdrawals for perhaps 15-20 years, which is actually the better overall vehicle for overall expenses between the mutual fund and ETF? Is the advantage of expense ratio while holding the asset (0.01%) offset, or even more than offset (0.01% - 0.1%), by the disadvantages while selling (bid/ask spread and premium/discount factors)? This question specifically pertains to VTI vs. VTSAX.

Thank you.
The investor behavior difference between using an ETF or mutual fund such as VTI or VTSAX will likely overwhelm any expense or bid/ask benefit.
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Re: Mutual fund vs. ETF accumulation and withdrawal

Post by freedom66 »

What is the final amount of the investments, and the percentage of this that $31,471 represents? How much difference will it make in whatever end use you put the money to?
The calculator I used was from nerdwallet.com “Mutual Fund Calculator: Find What Fees Will Cost you”. Here are my assumptions and results:

Initial investment of $3 million,
adding $12K per year
for 20 years and assuming 9% return

0.04% expense ratio:
Ending value (net with fees): $17,356,195
Ending value (gross): $17,482,407
Cost of fees: $126,212

0.03% expense ratio:
Ending value (net with fees): $17,387,666
Ending value (gross): $17,482,407
Cost of fees: $94,741

The difference in fees is $31,471 (of course using my assumptive inputs). This amount is 1.05% of the original investment amount of $3 million. As far as my own retirement it would not make a difference; however since it is an option to gain this amount simply by switching from VTSAX to VTI with no tax consequences, it would add to the amount of my charitable donations. $31K goes a long, long way for some people and causes.
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Re: Mutual fund vs. ETF accumulation and withdrawal

Post by freedom66 »

The investor behavior difference between using an ETF or mutual fund such as VTI or VTSAX will likely overwhelm any expense or bid/ask benefit.
I agree with this after all the discussion here and having read livesofts thread he kindly linked. Perhaps the answer I seek is basically unknowable with all the variables and time (decades), behavior, and of course I made assumptions in the calculations as well. My plan is currently to draw down by taking out money once per year after 20 years. For now I will leave my accounts alone with about 50% in VTSAX and 50% in VTI, and hopefully this thread will remain on the back burner here and bogleheads can continue to add information.
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Re: Mutual fund vs. ETF accumulation and withdrawal

Post by mkc »

Makefile wrote: Sun Dec 05, 2021 3:46 pm You do realize, when taking "expense ratios matter" to this extreme, that Fidelity has index funds with an ER of zero?
But they are proprietary funds at Fidelity and cannot be transferred in kind to another brokerage. They are appropriate only for tax-advantaged accounts where they can be liquidated if needed without incurring capital gains taxes.
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Re: Mutual fund vs. ETF accumulation and withdrawal

Post by 22twain »

freedom66 wrote: Mon Dec 06, 2021 8:47 am The difference in fees is $31,471 (of course using my assumptive inputs). This amount is 1.05% of the original investment amount of $3 million.
And about 0.18% of the final amount of $17.4 million. Different people are free to have different reactions, but if I had that much, I wouldn't be slapping my head and thinking, "Oh gee, I coulda had another $31K if I'd invested that in VTI instead of VTSAX! :oops: " :happy
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Re: Mutual fund vs. ETF accumulation and withdrawal

Post by ruralavalon »

White Coat Investor, "Don’t Obsess About Expense Ratios". " . . . all of a sudden the investor who has been told that “expenses matter” assumes that differences of 1-3 basis points matter. Yes, they matter, but not very much. And in fact, once you've gotten down to differences of less than 10-20 basis points, they matter a whole lot less than some other things. "
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Re: Mutual fund vs. ETF accumulation and withdrawal

Post by jhawktx »

Makefile wrote: Sun Dec 05, 2021 3:46 pm You do realize, when taking "expense ratios matter" to this extreme, that Fidelity has index funds with an ER of zero?
And you do realize that Fidelity's zero ER funds have not translated into higher total returns which is the most important metric?
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Re: Mutual fund vs. ETF accumulation and withdrawal

Post by McDee »

At $5M+ in VTSAX, the institutional share class VITSX could be used instead or converted to tax-free, with the same current 0.03% expense ratio as VTI.
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Re: Mutual fund vs. ETF accumulation and withdrawal

Post by freedom66 »

And about 0.18% of the final amount of $17.4 million. Different people are free to have different reactions, but if I had that much, I wouldn't be slapping my head and thinking, "Oh gee, I coulda had another $31K if I'd invested that in VTI instead of VTSAX!
I fully understand your point. I donate and invest significant amounts of my money to environmental efforts such as reforestation, preservation of existing forests, and animal care. $31K is a LOT of animal food and/or tree seedlings, if all other things are equal and all I have to do is click a few buttons to move from a fund to an ETF. But yes your point is understood and appreciated, and the difference is likely a toss-up anyway depending on what the future brings.
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Re: Mutual fund vs. ETF accumulation and withdrawal

Post by livesoft »

Since you already own shares of VTI presumably you have seen how your brokerage automatically reinvests dividends, right? But maybe you do not automatically reinvest dividends and either spend them or manually reinvest or some of each. Since the reinvest price depends on how those dividends get reinvested, there is also no way to model this since the price, time, and day will be variable and that variability will also overwhelm any attempt at getting a precise prediction and even assessment of the past.
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Re: Mutual fund vs. ETF accumulation and withdrawal

Post by freedom66 »

At $5M+ in VTSAX, the institutional share class VITSX could be used instead or converted to tax-free, with the same current 0.03% expense ratio as VTI.
McDee, thank you very much! I somehow missed that opportunity. That seems like the way forward for me once I hit $5 million with my existing VTSAX. A pity I have a large amount already in VTI that I cannot convert back, then convert it all now to VITSX.

Thank you boglehead community.
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Re: Mutual fund vs. ETF accumulation and withdrawal

Post by freedom66 »

Since you already own shares of VTI presumably you have seen how your brokerage automatically reinvests dividends, right? But maybe you do not automatically reinvest dividends and either spend them or manually reinvest or some of each. Since the reinvest price depends on how those dividends get reinvested, there is also no way to model this since the price, time, and day will be variable and that variability will also overwhelm any attempt at getting a precise prediction and even assessment of the past.
I do not automatically reinvest dividends in VTI. They go into my settlement fund and I reinvest all of them manually into VTSAX.
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Re: Mutual fund vs. ETF accumulation and withdrawal

Post by David Jay »

freedom66 wrote: Mon Dec 06, 2021 11:18 am$31K is a LOT of animal food and/or tree seedlings, if all other things are equal and all I have to do is click a few buttons to move from a fund to an ETF.
It is a lot now, in your current condition. But in your current condition a .01% difference on $3m is only $300, not $31K.

In your example, you will have $17M. $17M will buy a whole lot more of what you care about than $31K.

And all this is allowing that VTI actually outperforms and you never convert to VITSX.
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Re: Mutual fund vs. ETF accumulation and withdrawal

Post by freedom66 »

Your are right, David. Thanks for the perspective.
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Re: Mutual fund vs. ETF accumulation and withdrawal

Post by Makefile »

jhawktx wrote: Mon Dec 06, 2021 10:34 am
Makefile wrote: Sun Dec 05, 2021 3:46 pm You do realize, when taking "expense ratios matter" to this extreme, that Fidelity has index funds with an ER of zero?
And you do realize that Fidelity's zero ER funds have not translated into higher total returns which is the most important metric?
Thanks for proving my point, yes.
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Re: Mutual fund vs. ETF accumulation and withdrawal

Post by Ferdinand2014 »

Makefile wrote: Mon Dec 06, 2021 11:45 am
jhawktx wrote: Mon Dec 06, 2021 10:34 am
Makefile wrote: Sun Dec 05, 2021 3:46 pm You do realize, when taking "expense ratios matter" to this extreme, that Fidelity has index funds with an ER of zero?
And you do realize that Fidelity's zero ER funds have not translated into higher total returns which is the most important metric?
Thanks for proving my point, yes.
They follow different indexes. They have followed the stated index very well with almost complete overlap. That’s the bogey. Not if they outperform another low cost fund with a different index.
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Re: Mutual fund vs. ETF accumulation and withdrawal

Post by Northern Flicker »

They also are not zero cost.
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Re: Mutual fund vs. ETF accumulation and withdrawal

Post by Gas Exchange »

I am currently dealing with the same decision, whether to use ETF or MF versions of the same Vanguard fund. There are a lot of internal mechanisms that are not captured within the ER.

So I used Morningstar's compare tool:
$10,000 dollars put into VTI 10 years ago = $35,807.43 today
$10,000 dollars put into VTSAX 10 year ago = $35,797.33 today (0.9997 of above $ value.... aka the same number).

This appears to be true at various other short and long range time periods: that ETF is infinitesimally cheaper (really the same $ value).

So it appears that the slightly lower ER for ETF "evens" them out. You don't actually make more money keeping your holdings in an EFT v a MF of the same Vanguard index.

But I still share OP concern that bid-ask and even more significantly, premium-discount, play a role. BUT only on the way in (buying) and out (selling). It is my understanding that the higher the trading volume the less it is relevant, but for Bonds ETF > Stock ETF; for Municipal Bond and Corporate Bonds >> Treasury bonds. So these spreads could be most relevant for the narrower ETFs.

The sagacious Bill Bernstein does not like Bond ETFs (at least in the past??) because of the potential gaps in pricing that can develop under stress. Vanguard in an industry-focused podcast seemed to say that how the Bond ETFs held up in the March/April 2020 meltdown proved they are sturdy devices. But one can say the the Fed deciding to buy bond ETFs was because they were nervous about these ETFs (or perhaps more likely they were the perfect tool to shore up bonds collectively??).

I am concerned looking at Vanguard Bond ETFs that annual total returns are quite variable when you look at Price return v NAV returns.

So I am still analyzing the MF v ETF dilemma. It does seem when you buy and when you sell you can have spreads. But some have pointed out in other posts that end-of-day NAV for a MF is still a mathematical construct and not a "true" value, but would seem to be closer to the true value.

Perhaps just paying attention to the trading range when your buying or selling an ETF, and picking a close but favorable limit value can make up any of the other spreads discussed.

I am thinking out loud here. Does this make sense? Does this help anyone? Do you agree?
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