Mutual funds to ETFs.....A question!

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Broken Man 1999
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Mutual funds to ETFs.....A question!

Post by Broken Man 1999 » Fri Jan 12, 2018 6:52 pm

I have converted all our mutual funds on the equity side to ETFs.

I am now addressing the bond mutual funds.

To my surprise, when I called Vanguard to do the deed, I was surprised that my bond funds didn't have ETF equivalents.

I have Vanguard Intermediate Treasury fund. No ETF!
But, Vanguard Intermediate Treasury Index fund. Has an ETF

Likewise, I have Vanguard Short Term Treasury fund. No ETF!
But Vanguard Short Term Treasury Index fund has an ETF!

I honestly never noticed the differences. :oops:

My plan now is to convert both my holdings to Vanguard Total Bond Index fund.
Then I can convert Vanguard Total Bond Index fund to the associated Vanguard Total Bond Index ETF.

Question: Any wait time required, other than the normal MF timing? Any requirement on how long you must hold a MF before concerting to an ETF?

Finish by selling some Total Bond Index ETF, and buying whatever ETF (Vanguard Intermediate Treasury Index ETF, or Vanguard Short Term Treasury Index ETF) I decide to go with.

Any easier route to my desired goal?

Thanks!

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven than I shall not go. " -Mark Twain

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CAsage
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Re: Mutual funds to ETFs.....A question!

Post by CAsage » Fri Jan 12, 2018 6:54 pm

What is the point of buying the Total Bond Fund? Can you skip that step?
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DSInvestor
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Re: Mutual funds to ETFs.....A question!

Post by DSInvestor » Fri Jan 12, 2018 6:59 pm

ETF conversion is not available for Total Bond Market Index fund.

https://investor.vanguard.com/etf/faqs
Vanguard's ETF Conversion FAQ wrote: Can I convert my conventional Vanguard mutual fund shares to Vanguard ETF Shares?
Yes. Most funds that offer ETF Shares will allow you to convert from conventional shares of the same fund to ETF Shares. (Four of our bond ETFs—Total Bond Market, Short-Term Bond, Intermediate-Term Bond, and Long-Term Bond—don't allow for conversions.)

Conversions are allowed from both Investor and Admiral™ Shares and are tax-free if you own your mutual fund and ETF Shares through Vanguard.

Keep in mind that you can't convert ETF Shares back to conventional shares. If you decide in the future to sell your Vanguard ETF Shares and repurchase conventional shares, that transaction could be taxable.
If you have a brokerage account at Vanguard, there's no charge to convert conventional shares to ETF Shares. If you have questions, call us at 866-499-8473.

If you own your Vanguard mutual fund shares through another broker, keep in mind that some brokers may not be able to convert fractional shares, which could result in a modest taxable gain for you. Other brokers may also charge a fee for a conversion. Contact your broker for more information.
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F150HD
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Re: Mutual funds to ETFs.....A question!

Post by F150HD » Fri Jan 12, 2018 7:06 pm

Broken Man 1999 wrote:
Fri Jan 12, 2018 6:52 pm
I have converted all our mutual funds on the equity side to ETFs.
I converted mine last year but now kinda wish I hadn't and had kept mutual funds instead.

Now I have that little chunk of uninvestible cash that sits in (for example) my Roth that isn't enough to buy another whole share of anything (VTI for example). I think I have $40ish in cash in there now after my 2018 Roth contribution.

My concern is- over time that chunk may grow as the share price of VTI grows and I lack enough to buy that 'one extra share'. Don't have that issue w/ funds. I try to pick up shares of any ETF w/ the excess cash (VXUS for example), just kinda frustrating.

Broken Man 1999
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Re: Mutual funds to ETFs.....A question!

Post by Broken Man 1999 » Fri Jan 12, 2018 7:17 pm

Ah, now I remember about converting Total Bond Index to the ETF, had to do with interest or something.

Well, new plan: Sell mutual funds. Buy my desired ETF.

Thanks for the info. I thought I had found a way to do this in real time. Nope! Oh well, not going to matter much as the bond funds aren't going to suddenly go to heck.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven than I shall not go. " -Mark Twain

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randomizer
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Re: Mutual funds to ETFs.....A question!

Post by randomizer » Fri Jan 12, 2018 9:53 pm

What's the motivation to switch to an ETF?

(I did this recently too, even though I mostly prefer mutual funds, because I wanted to move some of my holdings to a different broker).
75:25 AA / Expected retirement: 2097

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