Mutual Fund (VFSVX) vs. ETF (VSS) question

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Callalily
Posts: 32
Joined: Wed Dec 16, 2009 11:42 am

Mutual Fund (VFSVX) vs. ETF (VSS) question

Post by Callalily »

I'm just now beginning to consider purchasing ETFs rather than mutual funds and so am on a learning spree. Why would Vanguard FTSE All-Wld ex-US SmCp Idx VFSVX show a YTD return of -5.78% while VSS's is -6.30%? (I obtained the figures from Morningstar). It seems as if you're paying a "fee" either way, whether it's via a purchasing fee for mutual funds or ETF premium.

Am I on the right track?
mikep
Posts: 3856
Joined: Wed Apr 22, 2009 9:27 pm

Post by mikep »

Could the first trading day of the year have anything to do with it? VSS measured from market open, and VFSVX measured from the end of day NAV?
pauliec84
Posts: 414
Joined: Wed Feb 09, 2011 10:29 am

Post by pauliec84 »

The problem is because the underlying stocks trade in europe. So the mutual funds NAV gets set after european trading. VSS then moves a head of the shares based on new information during the American trading day, so unless you have a period where the stock doesn't move, you will get valuations for each.
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