how to put different ETF in different accounts

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kdlinvest
Posts: 16
Joined: Sun Sep 04, 2011 11:42 pm

how to put different ETF in different accounts

Post by kdlinvest » Sat Oct 13, 2018 2:37 am

Hi, I'm a new boglehead here after reading bogleheads 3-fund portfolio and I decided to follow this seemingly easy investment strategy for my retirement investment.

I'd like to hear your valuable advise/inputs here as I'm new to this and I'd like to find out if I'm doing the right things. Here's some background information and objectives and projected annual saving.

- I'm in my mid-forties, married with 2 young kids (1-2 y/o)

- Goal: We are frugal and saving for retirement to be able to retire in next 6 years is our goal.

- Current asset: I have the following accounts: a taxable account of 800K, tax-deferred company defined benefit of 220K, 401K of me and my wife each 60K and 40K, tax-free roth IRA for me and my wife, 170k and 40k each, and finally a tax-free health-saving-account of 12k.

- Besides primary residence with a good amount of equity, I do not own any other investment (no rental properties, etc.)

- Projected saving: We're planning to invest the following ANNUALLY: about 100K into our DB, 20K to my 401K, 10K to my wife's 401K, 7K to our HSA account to max out these tax-favorable accounts. In addition, we are putting in 20K to our taxable account MONTHLY.

I'd appreciate your thoughtful advises/suggestions for the following questions.

1) we have about 1.3 million of investable asset. Should I hire a professional manager to manage it for me? I understand bogleheads advocates for low fee index fund investing. But what're the pros/cons of hiring a financial advisor in consideration of my asset in terms of planning for early retirement in next 6 years?

2) I'm selling holdings in my taxable/tax-free/tax-deferred accounts and buying these following index funds: VTI/VXUS/BND/VNQ to complete my 4-fund portfolio with the addition of REITs ETF. Is 70/10/10/10 a reasonable asset allocation ratio for my age, retirement goal and projected annual saving? Should I be more aggressive or conservative?

3) Here's how I'm planning to "stuff" different accounts with different ETFs.
- taxable (unlimited free trades being a chase private client): vti/vxus
- DB (no free trades): vti
- 401K for both me/wife (no free trades): vti
- roth IRA for me (limited free trades): vti/vxus/bnd/vnq
- roth IRA for wife (no free trades): vti
- HSA (no free trades): vti

again, I'm planning to invest 401K and DB semi-annually, 7K on average to each Roth IRA/HSA annually, and but deposit 20K into taxable account monthly.

I'm planning to use my Roth IRA acct with existing 170K and yearly 7K to hold vti/vxus/bnd/vnq for re-balancing since I have free trades and it's tax-free account.

I'm planning to use VTI in all other accounts, except taxable acct I'd buy both VTI/VXUS. Is this a good plan in terms of most tax-efficient placement of these different ETF to different accounts?

- How would you rebalance this portfolio? Monthly when I deposit 20K into my taxable account I'd need to rebalance or just wait until the end of the year?

What do you all think? Is this a reasonable plan to self-manage my retirement investment saving?

Thank you all for your feedbacks/suggestions. Any additional questions/suggestions are highly welcomed
Last edited by kdlinvest on Sat Oct 13, 2018 7:34 pm, edited 2 times in total.

HEDGEFUNDIE
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Joined: Sun Oct 22, 2017 2:06 pm

Re: how to put different ETF in different accounts

Post by HEDGEFUNDIE » Sat Oct 13, 2018 3:10 am

Why are you so in love with VTI? Each account type probably offers its own free-to-trade total market fund. Why not save commissions and use those?

typical.investor
Posts: 399
Joined: Mon Jun 11, 2018 3:17 am

Re: how to put different ETF in different accounts

Post by typical.investor » Sat Oct 13, 2018 5:27 am

If you retire in your early fifties, you will have approximately a what 3-3.5% withdrawal.

Let’s say you find a cheap advisor at 0.8%. Do you see how expensive that is?

I doubt the advisor’s returns will cover their costs let alone leave you better off after having paid them.

90% equities 6 years from retirement seems too risky to me. Read about sequence of return risk.
Last edited by typical.investor on Sat Oct 13, 2018 5:39 am, edited 1 time in total.

UpperNwGuy
Posts: 1234
Joined: Sun Oct 08, 2017 7:16 pm

Re: how to put different ETF in different accounts

Post by UpperNwGuy » Sat Oct 13, 2018 5:30 am

HEDGEFUNDIE wrote:
Sat Oct 13, 2018 3:10 am
Why are you so in love with VTI? Each account type probably offers its own free-to-trade total market fund. Why not save commissions and use those?
I agree. Having VTI in all the accounts gives the false appearance of simplicity. It's probably simpler to take advantage of the unique choices available in each account. For example, I hold Vanguard's Total Stock in my Vanguard account and Schwab's Total Stock in my Schwab account.

kdlinvest
Posts: 16
Joined: Sun Sep 04, 2011 11:42 pm

Re: how to put different ETF in different accounts

Post by kdlinvest » Sat Oct 13, 2018 10:22 am

valid point, I can use schwab total market fund instead VTI and get unlimited free trades. On the other hand, I only plan to buy/sell in 401k/db once or twice a year, paying $4.95/trade x 2 doesn't seem to be a big issue. Does it?

on the other hand a more important question is this, what are the pros/cons of owning total market fund (mutual fund) over VTI? why is having VTI in all accounts "give a false sense of simplicity"? It's simpler than buying/holding mutual and VTI together, isn't it? especially trying to re-balance them across multiple accounts easily and quickly.

If not using VTI or replacing with a total market fund, do you recommend a different strategy such targeted fund?
Last edited by kdlinvest on Sat Oct 13, 2018 10:47 am, edited 1 time in total.

kdlinvest
Posts: 16
Joined: Sun Sep 04, 2011 11:42 pm

Re: how to put different ETF in different accounts

Post by kdlinvest » Sat Oct 13, 2018 10:31 am

typical.investor wrote:
Sat Oct 13, 2018 5:27 am
If you retire in your early fifties, you will have approximately a what 3-3.5% withdrawal.

Let’s say you find a cheap advisor at 0.8%. Do you see how expensive that is?

I doubt the advisor’s returns will cover their costs let alone leave you better off after having paid them.

90% equities 6 years from retirement seems too risky to me. Read about sequence of return risk.
yes, sequence of return is a concern. fortunately, we do have passive income stream coming between year 7 to year 20 (age 65) so our withdrawal rate is much lower than 4% (maybe close to 0% since I do plan on doing some side gigs to supplement income during this period of time). Besides, I do have flexibility to stretch from 6 to 10 years or longer if I have to work. The 6 year to retirement is goal, for us to put as much money into saving as possible for now.

on the other hand, the passive income will end at age 65. At the time we would have to live off on our accumulated saving.
Last edited by kdlinvest on Sat Oct 13, 2018 10:56 am, edited 1 time in total.

JW-Retired
Posts: 6994
Joined: Sun Dec 16, 2007 12:25 pm

Re: how to put different ETF in different accounts

Post by JW-Retired » Sat Oct 13, 2018 10:51 am

kdlinvest wrote:
Sat Oct 13, 2018 2:37 am
1) we have about 1.3 million of investable asset. Should I hire a professional manager to manage it for me? I understand bogleheads advocates for low fee index fund investing. But what're the pros/cons of hiring a financial advisor in consideration of my asset in terms of planning for early retirement in next 6 years?
The humongous con is that typically the advisor wants to be paid handsomely, so one way or another he/she siphons off a yearly 1% or 2% of your retirement nest egg every year. If you consider that a historical "safe draw" from retirement savings is 4% or less, you are handing off 25%-50% of your retirement income to the advisor before you get any. Isn't that sheer madness?

Many advisors do make it difficult to know what's happening though. :wink:

Welcome to the forum!
JW
Retired at Last

123
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Joined: Fri Oct 12, 2012 3:55 pm

Re: how to put different ETF in different accounts

Post by 123 » Sat Oct 13, 2018 11:56 am

kdlinvest wrote:
Sat Oct 13, 2018 2:37 am
...
1) we have about 1.3 million of investable asset. Should I hire a professional manager to manage it for me? I understand bogleheads advocates for low fee index fund investing. But what're the pros/cons of hiring a financial advisor in consideration of my asset in terms of planning for early retirement in next 6 years?...
There is no one who has a higher interest in the success of your investment plan than you. You can be a far better manager of your own funds than anyone else ever could be. A "professional manager" is more interested in getting commissions and fees from you for his own portfolio than in is in the growth of your assets. If you've got a substantial shortfall that you want to make up in order to retire in 6 years you are far better able to appreciate your own tolerance for risk than anyone else. Sure the professional manager may come up with some options that might work on a six year time frame, but those options might be of the retire in six years or NEVER variety.
The closest helping hand is at the end of your own arm.

kdlinvest
Posts: 16
Joined: Sun Sep 04, 2011 11:42 pm

Re: how to put different ETF in different accounts

Post by kdlinvest » Sat Oct 13, 2018 2:16 pm

123 wrote:
Sat Oct 13, 2018 11:56 am
kdlinvest wrote:
Sat Oct 13, 2018 2:37 am
...
1) we have about 1.3 million of investable asset. Should I hire a professional manager to manage it for me? I understand bogleheads advocates for low fee index fund investing. But what're the pros/cons of hiring a financial advisor in consideration of my asset in terms of planning for early retirement in next 6 years?...
There is no one who has a higher interest in the success of your investment plan than you. You can be a far better manager of your own funds than anyone else ever could be. A "professional manager" is more interested in getting commissions and fees from you for his own portfolio than in is in the growth of your assets. If you've got a substantial shortfall that you want to make up in order to retire in 6 years you are far better able to appreciate your own tolerance for risk than anyone else. Sure the professional manager may come up with some options that might work on a six year time frame, but those options might be of the retire in six years or NEVER variety.
Yes, I agree with you based on everything I read about index fund investment. But I'm just afraid I'm doing something wrong without a professional advisor.

It feels very "unreal" to convert 20-40 stocks/etfs into 4 etfs and hold them in large amount. I meant, based on my plan, I'd have close to 900K in VTI after converting to 4-fund portfolio. I meant very soon less than 1 year, I'd have over 1 million of asset in VTI.

Feels scary? Doesn't it?

HEDGEFUNDIE
Posts: 1190
Joined: Sun Oct 22, 2017 2:06 pm

Re: how to put different ETF in different accounts

Post by HEDGEFUNDIE » Sat Oct 13, 2018 3:51 pm

kdlinvest wrote:
Sat Oct 13, 2018 10:22 am
valid point, I can use schwab total market fund instead VTI and get unlimited free trades. On the other hand, I only plan to buy/sell in 401k/db once or twice a year, paying $4.95/trade x 2 doesn't seem to be a big issue. Does it?

on the other hand a more important question is this, what are the pros/cons of owning total market fund (mutual fund) over VTI? why is having VTI in all accounts "give a false sense of simplicity"? It's simpler than buying/holding mutual and VTI together, isn't it? especially trying to re-balance them across multiple accounts easily and quickly.

If not using VTI or replacing with a total market fund, do you recommend a different strategy such targeted fund?
I think you may be confused with the terminology. When BHs say “total market fund” we mean any low expense fund (mutual fund or exchange-traded fund) that tracks the entirety of the US stock market.

The Vanguard VTI exchange-traded fund qualifies. So does the Schwab Total Market mutual fund (SWTSX), or the Fidelity Total Market mutual fund (FSTMX), or a half dozen other funds from other investment houses. They are all 99.9% identical, investing in the same stocks. So you can hold as many different Total Market funds as you want, no rebalancing or “different strategy” required.

kdlinvest
Posts: 16
Joined: Sun Sep 04, 2011 11:42 pm

Re: how to put different ETF in different accounts

Post by kdlinvest » Sat Oct 13, 2018 4:11 pm

HEDGEFUNDIE wrote:
Sat Oct 13, 2018 3:51 pm
kdlinvest wrote:
Sat Oct 13, 2018 10:22 am
valid point, I can use schwab total market fund instead VTI and get unlimited free trades. On the other hand, I only plan to buy/sell in 401k/db once or twice a year, paying $4.95/trade x 2 doesn't seem to be a big issue. Does it?

on the other hand a more important question is this, what are the pros/cons of owning total market fund (mutual fund) over VTI? why is having VTI in all accounts "give a false sense of simplicity"? It's simpler than buying/holding mutual and VTI together, isn't it? especially trying to re-balance them across multiple accounts easily and quickly.

If not using VTI or replacing with a total market fund, do you recommend a different strategy such targeted fund?
I think you may be confused with the terminology. When BHs say “total market fund” we mean any low expense fund (mutual fund or exchange-traded fund) that tracks the entirety of the US stock market.

The Vanguard VTI exchange-traded fund qualifies. So does the Schwab Total Market mutual fund (SWTSX), or the Fidelity Total Market mutual fund (FSTMX), or a half dozen other funds from other investment houses. They are all 99.9% identical, investing in the same stocks. So you can hold as many different Total Market funds as you want, no rebalancing or “different strategy” required.
Yes, I understood your clarification. When I said re-balancing, I meant re-balance in the total portfolio with bonds/international/reits etf in mind. It just seems easier to use etfs.

HEDGEFUNDIE
Posts: 1190
Joined: Sun Oct 22, 2017 2:06 pm

Re: how to put different ETF in different accounts

Post by HEDGEFUNDIE » Sat Oct 13, 2018 4:24 pm

kdlinvest wrote:
Sat Oct 13, 2018 4:11 pm
HEDGEFUNDIE wrote:
Sat Oct 13, 2018 3:51 pm
kdlinvest wrote:
Sat Oct 13, 2018 10:22 am
valid point, I can use schwab total market fund instead VTI and get unlimited free trades. On the other hand, I only plan to buy/sell in 401k/db once or twice a year, paying $4.95/trade x 2 doesn't seem to be a big issue. Does it?

on the other hand a more important question is this, what are the pros/cons of owning total market fund (mutual fund) over VTI? why is having VTI in all accounts "give a false sense of simplicity"? It's simpler than buying/holding mutual and VTI together, isn't it? especially trying to re-balance them across multiple accounts easily and quickly.

If not using VTI or replacing with a total market fund, do you recommend a different strategy such targeted fund?
I think you may be confused with the terminology. When BHs say “total market fund” we mean any low expense fund (mutual fund or exchange-traded fund) that tracks the entirety of the US stock market.

The Vanguard VTI exchange-traded fund qualifies. So does the Schwab Total Market mutual fund (SWTSX), or the Fidelity Total Market mutual fund (FSTMX), or a half dozen other funds from other investment houses. They are all 99.9% identical, investing in the same stocks. So you can hold as many different Total Market funds as you want, no rebalancing or “different strategy” required.
Yes, I understood your clarification. When I said re-balancing, I meant re-balance in the total portfolio with bonds/international/reits etf in mind. It just seems easier to use etfs.
Actually it is slightly harder to rebalance with ETFs since ETFs have share prices that you have to account for. Let’s say you needed to rebalance $1000 of your portfolio from stocks into bonds. If all you had were ETFs you would have to calculate how many shares of the ETF to sell, dividing the $1000 by the share price to get the share count. With a mutual fund all you need is the dollar amount, not the share count.

kdlinvest
Posts: 16
Joined: Sun Sep 04, 2011 11:42 pm

Re: how to put different ETF in different accounts

Post by kdlinvest » Sat Oct 13, 2018 4:52 pm

HEDGEFUNDIE wrote:
Sat Oct 13, 2018 4:24 pm
kdlinvest wrote:
Sat Oct 13, 2018 4:11 pm
HEDGEFUNDIE wrote:
Sat Oct 13, 2018 3:51 pm
kdlinvest wrote:
Sat Oct 13, 2018 10:22 am
valid point, I can use schwab total market fund instead VTI and get unlimited free trades. On the other hand, I only plan to buy/sell in 401k/db once or twice a year, paying $4.95/trade x 2 doesn't seem to be a big issue. Does it?

on the other hand a more important question is this, what are the pros/cons of owning total market fund (mutual fund) over VTI? why is having VTI in all accounts "give a false sense of simplicity"? It's simpler than buying/holding mutual and VTI together, isn't it? especially trying to re-balance them across multiple accounts easily and quickly.

If not using VTI or replacing with a total market fund, do you recommend a different strategy such targeted fund?
I think you may be confused with the terminology. When BHs say “total market fund” we mean any low expense fund (mutual fund or exchange-traded fund) that tracks the entirety of the US stock market.

The Vanguard VTI exchange-traded fund qualifies. So does the Schwab Total Market mutual fund (SWTSX), or the Fidelity Total Market mutual fund (FSTMX), or a half dozen other funds from other investment houses. They are all 99.9% identical, investing in the same stocks. So you can hold as many different Total Market funds as you want, no rebalancing or “different strategy” required.
Yes, I understood your clarification. When I said re-balancing, I meant re-balance in the total portfolio with bonds/international/reits etf in mind. It just seems easier to use etfs.
Actually it is slightly harder to rebalance with ETFs since ETFs have share prices that you have to account for. Let’s say you needed to rebalance $1000 of your portfolio from stocks into bonds. If all you had were ETFs you would have to calculate how many shares of the ETF to sell, dividing the $1000 by the share price to get the share count. With a mutual fund all you need is the dollar amount, not the share count.
Good point here...except I would have to go with schwab funds. Here're drawbacks.

- I can't get admiral funds at either schwab or chase private client accounts. I'd have to go with schwab funds in order to minimize ER and re-balance cost.

- while schwab funds are low cost (just as vanguard admiral funds, if not lower), but I've read here schwab funds don't track the same index as vanguard funds, especially international stock market. I'd have to do patch work to cover what schwab funds don't cover, which would make portfolio more complicated.

- I really feel more comfortable with established vanguard funds

- on the other hand, I can get vanguard ETF in any accounts, with same ER as admiral funds, and most if not all, free trades for re-balancing.

- yes, there's more calculation to be made before buying/selling ETF, and might pay a little more on spreads, but it's just a minor inconvenience.

Does it make sense? I'm sure schwab would want me to go with schwab for all for funds.

Feel free to correct me. Thank you.

ThriftyPhD
Posts: 732
Joined: Mon Jul 31, 2017 10:43 am

Re: how to put different ETF in different accounts

Post by ThriftyPhD » Sat Oct 13, 2018 5:11 pm

kdlinvest wrote:
Sat Oct 13, 2018 2:37 am
- Projected saving: We're planning to invest about 100K annually into our DB, 20K to my 401K, 10K to my wife's 401K, and 20K monthly to our taxable account, 7K to our HSA account
Is that really 20k monthly to taxable, or yearly? You repeat it later as monthly too.

Is there a reason why you're putting so much into taxable before maxing both 401ks and Roth IRAs? If you're worried about too much pretax given the DB, do either/both 401ks offer a Roth or after tax option?

HEDGEFUNDIE
Posts: 1190
Joined: Sun Oct 22, 2017 2:06 pm

Re: how to put different ETF in different accounts

Post by HEDGEFUNDIE » Sat Oct 13, 2018 5:17 pm

kdlinvest wrote:
Sat Oct 13, 2018 4:52 pm
HEDGEFUNDIE wrote:
Sat Oct 13, 2018 4:24 pm
kdlinvest wrote:
Sat Oct 13, 2018 4:11 pm
HEDGEFUNDIE wrote:
Sat Oct 13, 2018 3:51 pm
kdlinvest wrote:
Sat Oct 13, 2018 10:22 am
valid point, I can use schwab total market fund instead VTI and get unlimited free trades. On the other hand, I only plan to buy/sell in 401k/db once or twice a year, paying $4.95/trade x 2 doesn't seem to be a big issue. Does it?

on the other hand a more important question is this, what are the pros/cons of owning total market fund (mutual fund) over VTI? why is having VTI in all accounts "give a false sense of simplicity"? It's simpler than buying/holding mutual and VTI together, isn't it? especially trying to re-balance them across multiple accounts easily and quickly.

If not using VTI or replacing with a total market fund, do you recommend a different strategy such targeted fund?
I think you may be confused with the terminology. When BHs say “total market fund” we mean any low expense fund (mutual fund or exchange-traded fund) that tracks the entirety of the US stock market.

The Vanguard VTI exchange-traded fund qualifies. So does the Schwab Total Market mutual fund (SWTSX), or the Fidelity Total Market mutual fund (FSTMX), or a half dozen other funds from other investment houses. They are all 99.9% identical, investing in the same stocks. So you can hold as many different Total Market funds as you want, no rebalancing or “different strategy” required.
Yes, I understood your clarification. When I said re-balancing, I meant re-balance in the total portfolio with bonds/international/reits etf in mind. It just seems easier to use etfs.
Actually it is slightly harder to rebalance with ETFs since ETFs have share prices that you have to account for. Let’s say you needed to rebalance $1000 of your portfolio from stocks into bonds. If all you had were ETFs you would have to calculate how many shares of the ETF to sell, dividing the $1000 by the share price to get the share count. With a mutual fund all you need is the dollar amount, not the share count.
Good point here...except I would have to go with schwab funds. Here're drawbacks.

- I can't get admiral funds at either schwab or chase private client accounts. I'd have to go with schwab funds in order to minimize ER and re-balance cost.

- while schwab funds are low cost (just as vanguard admiral funds, if not lower), but I've read here schwab funds don't track the same index as vanguard funds, especially international stock market. I'd have to do patch work to cover what schwab funds don't cover, which would make portfolio more complicated.

- I really feel more comfortable with established vanguard funds

- on the other hand, I can get vanguard ETF in any accounts, with same ER as admiral funds, and most if not all, free trades for re-balancing.

- yes, there's more calculation to be made before buying/selling ETF, and might pay a little more on spreads, but it's just a minor inconvenience.

Does it make sense? I'm sure schwab would want me to go with schwab for all for funds.

Feel free to correct me. Thank you.
The Schwab fund is actually cheaper than VTSAX, the Vanguard Total Market Admiral Fund. SWTSX has an expense ratio of 0.03%, VTSAX is 0.04.

It is true that the two funds track different indices, but they are 99.99% identical. As a matter of fact, I just ran a comparison of VTSAX with SWTSX over the lifespan of these funds, take a look:

https://www.portfoliovisualizer.com/fun ... F12%2F2018

Plug in VTI into that comparison in place of VTSAX and you’ll see a real difference begin to emerge, not in favor of Vanguard, and this doesn’t even account for any trading commissions or cash drag (from using ETFs).
Last edited by HEDGEFUNDIE on Sat Oct 13, 2018 5:30 pm, edited 1 time in total.

HEDGEFUNDIE
Posts: 1190
Joined: Sun Oct 22, 2017 2:06 pm

Re: how to put different ETF in different accounts

Post by HEDGEFUNDIE » Sat Oct 13, 2018 5:25 pm

And by the way, it is not a given that Vanguard funds track the “best” indices. See discussion here:

viewtopic.php?t=208496

And

https://www.bogleheads.org/wiki/US_tota ... ex_returns

Vanguard tracks the CRSP indices, Schwab tracks Dow Jones. When you say that Vangaurd funds are “established”, do you realize that they switched over to the CRSP indices in 2013? Schwab has been tracking Dow Jones this whole time.

kdlinvest
Posts: 16
Joined: Sun Sep 04, 2011 11:42 pm

Re: how to put different ETF in different accounts

Post by kdlinvest » Sat Oct 13, 2018 5:56 pm

ThriftyPhD wrote:
Sat Oct 13, 2018 5:11 pm
kdlinvest wrote:
Sat Oct 13, 2018 2:37 am
- Projected saving: We're planning to invest about 100K annually into our DB, 20K to my 401K, 10K to my wife's 401K, and 20K monthly to our taxable account, 7K to our HSA account
Is that really 20k monthly to taxable, or yearly? You repeat it later as monthly too.

Is there a reason why you're putting so much into taxable before maxing both 401ks and Roth IRAs? If you're worried about too much pretax given the DB, do either/both 401ks offer a Roth or after tax option?
sorry, it's 20k monthly to taxable, after db/401k/backdoor ira are maxed out.

kdlinvest
Posts: 16
Joined: Sun Sep 04, 2011 11:42 pm

Re: how to put different ETF in different accounts

Post by kdlinvest » Sat Oct 13, 2018 6:02 pm

HEDGEFUNDIE wrote:
Sat Oct 13, 2018 5:17 pm
kdlinvest wrote:
Sat Oct 13, 2018 4:52 pm
HEDGEFUNDIE wrote:
Sat Oct 13, 2018 4:24 pm
kdlinvest wrote:
Sat Oct 13, 2018 4:11 pm
HEDGEFUNDIE wrote:
Sat Oct 13, 2018 3:51 pm


I think you may be confused with the terminology. When BHs say “total market fund” we mean any low expense fund (mutual fund or exchange-traded fund) that tracks the entirety of the US stock market.

The Vanguard VTI exchange-traded fund qualifies. So does the Schwab Total Market mutual fund (SWTSX), or the Fidelity Total Market mutual fund (FSTMX), or a half dozen other funds from other investment houses. They are all 99.9% identical, investing in the same stocks. So you can hold as many different Total Market funds as you want, no rebalancing or “different strategy” required.
Yes, I understood your clarification. When I said re-balancing, I meant re-balance in the total portfolio with bonds/international/reits etf in mind. It just seems easier to use etfs.
Actually it is slightly harder to rebalance with ETFs since ETFs have share prices that you have to account for. Let’s say you needed to rebalance $1000 of your portfolio from stocks into bonds. If all you had were ETFs you would have to calculate how many shares of the ETF to sell, dividing the $1000 by the share price to get the share count. With a mutual fund all you need is the dollar amount, not the share count.
Good point here...except I would have to go with schwab funds. Here're drawbacks.

- I can't get admiral funds at either schwab or chase private client accounts. I'd have to go with schwab funds in order to minimize ER and re-balance cost.

- while schwab funds are low cost (just as vanguard admiral funds, if not lower), but I've read here schwab funds don't track the same index as vanguard funds, especially international stock market. I'd have to do patch work to cover what schwab funds don't cover, which would make portfolio more complicated.

- I really feel more comfortable with established vanguard funds

- on the other hand, I can get vanguard ETF in any accounts, with same ER as admiral funds, and most if not all, free trades for re-balancing.

- yes, there's more calculation to be made before buying/selling ETF, and might pay a little more on spreads, but it's just a minor inconvenience.

Does it make sense? I'm sure schwab would want me to go with schwab for all for funds.

Feel free to correct me. Thank you.
The Schwab fund is actually cheaper than VTSAX, the Vanguard Total Market Admiral Fund. SWTSX has an expense ratio of 0.03%, VTSAX is 0.04.

It is true that the two funds track different indices, but they are 99.99% identical. As a matter of fact, I just ran a comparison of VTSAX with SWTSX over the lifespan of these funds, take a look:

https://www.portfoliovisualizer.com/fun ... F12%2F2018

Plug in VTI into that comparison in place of VTSAX and you’ll see a real difference begin to emerge, not in favor of Vanguard, and this doesn’t even account for any trading commissions or cash drag (from using ETFs).
Yes, I'm aware of SWTSX has ER of 0.03%. I don't see the difference between these two funds on the portfoliovisualizer. Replace VTSAX with VTI, I don't see any difference either.

It's other funds that I'm concerned about. I've read on this forum schwab international doesn't perform as well as vanguard international stock.

HEDGEFUNDIE
Posts: 1190
Joined: Sun Oct 22, 2017 2:06 pm

Re: how to put different ETF in different accounts

Post by HEDGEFUNDIE » Sat Oct 13, 2018 6:10 pm

kdlinvest wrote:
Sat Oct 13, 2018 6:02 pm

It's other funds that I'm concerned about. I've read on this forum schwab international doesn't perform as well as vanguard international stock.
Whoever put this idea in your head clearly got it wrong:

https://www.portfoliovisualizer.com/fun ... F12%2F2018

kdlinvest
Posts: 16
Joined: Sun Sep 04, 2011 11:42 pm

Re: how to put different ETF in different accounts

Post by kdlinvest » Sat Oct 13, 2018 6:58 pm

HEDGEFUNDIE wrote:
Sat Oct 13, 2018 6:10 pm
kdlinvest wrote:
Sat Oct 13, 2018 6:02 pm

It's other funds that I'm concerned about. I've read on this forum schwab international doesn't perform as well as vanguard international stock.
Whoever put this idea in your head clearly got it wrong:

https://www.portfoliovisualizer.com/fun ... F12%2F2018
I think I read on this forum schwab international stock doesn't cover emerging markets or Canada. I assumed it translated worse performance. That's not the case according to the visualizer you put above. In fact, it shows schwab international stock performs better.

So are you suggesting to hold schwab international fund over vanguard and don't bother with trying to cover emerging market with additional fund as suggested on other posts?

HEDGEFUNDIE
Posts: 1190
Joined: Sun Oct 22, 2017 2:06 pm

Re: how to put different ETF in different accounts

Post by HEDGEFUNDIE » Sat Oct 13, 2018 7:04 pm

kdlinvest wrote:
Sat Oct 13, 2018 6:58 pm
HEDGEFUNDIE wrote:
Sat Oct 13, 2018 6:10 pm
kdlinvest wrote:
Sat Oct 13, 2018 6:02 pm

It's other funds that I'm concerned about. I've read on this forum schwab international doesn't perform as well as vanguard international stock.
Whoever put this idea in your head clearly got it wrong:

https://www.portfoliovisualizer.com/fun ... F12%2F2018
I think I read on this forum schwab international stock doesn't cover emerging markets or Canada. I assumed it translated worse performance. That's not the case according to the visualizer you put above. In fact, it shows schwab international stock performs better.

So are you suggesting to hold schwab international fund over vanguard and don't bother with trying to cover emerging market with additional fund as suggested on other posts?
I am suggesting two things:

1. Over the long run none of these decisions matter all that much. What matters is how much you save and how you behave during market crashes.

2. Just because something has the name “Vanguard” on it doesn’t automatically make it better.

typical.investor
Posts: 399
Joined: Mon Jun 11, 2018 3:17 am

Re: how to put different ETF in different accounts

Post by typical.investor » Sat Oct 13, 2018 7:08 pm

kdlinvest wrote:
Sat Oct 13, 2018 6:58 pm
HEDGEFUNDIE wrote:
Sat Oct 13, 2018 6:10 pm
kdlinvest wrote:
Sat Oct 13, 2018 6:02 pm

It's other funds that I'm concerned about. I've read on this forum schwab international doesn't perform as well as vanguard international stock.
Whoever put this idea in your head clearly got it wrong:

https://www.portfoliovisualizer.com/fun ... F12%2F2018
I think I read on this forum schwab international stock doesn't cover emerging markets or Canada. I assumed it translated worse performance. That's not the case according to the visualizer you put above. In fact, it shows schwab international stock performs better.

So are you suggesting to hold schwab international fund over vanguard and don't bother with trying to cover emerging market with additional fund as suggested on other posts?
That link is apple vs oranges.

Here is a correct comparison. (and yes it holds Canada)

https://www.portfoliovisualizer.com/bac ... tion4_1=20

Here is a simple calculator to determine the market weighted holdings of the Schwab funds (using ETFs, Schwab doesn't have an EM mutual fund other than in their fundamental index (value) line.
https://docs.google.com/spreadsheets/d/ ... sp=sharing

typical.investor
Posts: 399
Joined: Mon Jun 11, 2018 3:17 am

Re: how to put different ETF in different accounts

Post by typical.investor » Sat Oct 13, 2018 7:11 pm

HEDGEFUNDIE wrote:
Sat Oct 13, 2018 7:04 pm
kdlinvest wrote:
Sat Oct 13, 2018 6:58 pm
HEDGEFUNDIE wrote:
Sat Oct 13, 2018 6:10 pm
kdlinvest wrote:
Sat Oct 13, 2018 6:02 pm

It's other funds that I'm concerned about. I've read on this forum schwab international doesn't perform as well as vanguard international stock.
Whoever put this idea in your head clearly got it wrong:

https://www.portfoliovisualizer.com/fun ... F12%2F2018
I think I read on this forum schwab international stock doesn't cover emerging markets or Canada. I assumed it translated worse performance. That's not the case according to the visualizer you put above. In fact, it shows schwab international stock performs better.

So are you suggesting to hold schwab international fund over vanguard and don't bother with trying to cover emerging market with additional fund as suggested on other posts?
I am suggesting two things:

1. Over the long run none of these decisions matter all that much. What matters is how much you save and how you behave during market crashes.

2. Just because something has the name “Vanguard” on it doesn’t automatically make it better.
I agree! Schwab's international were very similar and it's difficult to know which will be better going forward. Vangaurd's floats (allocations for EM, small change due to changes in market weighting) and the allocations for Schwab were set, so that probably accounts for the small difference.

kdlinvest
Posts: 16
Joined: Sun Sep 04, 2011 11:42 pm

Re: how to put different ETF in different accounts

Post by kdlinvest » Sat Oct 13, 2018 7:16 pm

That link is apple vs oranges.

Here is a correct comparison. (and yes it holds Canada)

https://www.portfoliovisualizer.com/bac ... tion4_1=20

Here is a simple calculator to determine the market weighted holdings of the Schwab funds (using ETFs, Schwab doesn't have an EM mutual fund other than in their fundamental index (value) line.
https://docs.google.com/spreadsheets/d/ ... sp=sharing
interesting to see schwab international with incomplete coverage actually outperforms both vanguard international and schwab international with supplementation of additional schwab fund to give complete coverage.

so why bothers to use vanguard at all or try to get multiple schwab funds for complete coverage?

typical.investor
Posts: 399
Joined: Mon Jun 11, 2018 3:17 am

Re: how to put different ETF in different accounts

Post by typical.investor » Sat Oct 13, 2018 7:26 pm

kdlinvest wrote:
Sat Oct 13, 2018 7:16 pm
That link is apple vs oranges.

Here is a correct comparison. (and yes it holds Canada)

https://www.portfoliovisualizer.com/bac ... tion4_1=20

Here is a simple calculator to determine the market weighted holdings of the Schwab funds (using ETFs, Schwab doesn't have an EM mutual fund other than in their fundamental index (value) line.
https://docs.google.com/spreadsheets/d/ ... sp=sharing
interesting to see schwab international with incomplete coverage actually outperforms both vanguard international and schwab international with supplementation of additional schwab fund to give complete coverage.

so why bothers to use vanguard at all or try to get multiple schwab funds for complete coverage?
Because we don't know the future. What underperformed in the past may do better in the future and vice versa.

Otherwise we'd all go 100% FAANG.

kdlinvest
Posts: 16
Joined: Sun Sep 04, 2011 11:42 pm

Re: how to put different ETF in different accounts

Post by kdlinvest » Sat Oct 13, 2018 7:40 pm

typical.investor wrote:
Sat Oct 13, 2018 7:26 pm
kdlinvest wrote:
Sat Oct 13, 2018 7:16 pm
That link is apple vs oranges.

Here is a correct comparison. (and yes it holds Canada)

https://www.portfoliovisualizer.com/bac ... tion4_1=20

Here is a simple calculator to determine the market weighted holdings of the Schwab funds (using ETFs, Schwab doesn't have an EM mutual fund other than in their fundamental index (value) line.
https://docs.google.com/spreadsheets/d/ ... sp=sharing
interesting to see schwab international with incomplete coverage actually outperforms both vanguard international and schwab international with supplementation of additional schwab fund to give complete coverage.

so why bothers to use vanguard at all or try to get multiple schwab funds for complete coverage?
Because we don't know the future. What underperformed in the past may do better in the future and vice versa.

Otherwise we'd all go 100% FAANG.
okay, so make it simple, is it better to have a simple vanguard etf VXUS for TOTAL international coverage at the cost of $4.95 per trade but with ask/offer spread and cash drag or a schwab international fund complemented with their emerging market fund for more complicated portfolio, but no trading cost/spread/cash drag?

ProfWengen
Posts: 20
Joined: Sat Oct 06, 2018 9:15 pm

Re: how to put different ETF in different accounts

Post by ProfWengen » Sat Oct 13, 2018 11:13 pm

I recommend speaking with a fee-only financial advisor if you do decide to go that route. Talk everything over with them and you just pay them for their time. Once you all decide how best to invest you can place the trades yourself with whichever online broker you please. :)

typical.investor
Posts: 399
Joined: Mon Jun 11, 2018 3:17 am

Re: how to put different ETF in different accounts

Post by typical.investor » Sun Oct 14, 2018 12:01 am

kdlinvest wrote:
Sat Oct 13, 2018 7:40 pm
typical.investor wrote:
Sat Oct 13, 2018 7:26 pm
kdlinvest wrote:
Sat Oct 13, 2018 7:16 pm
That link is apple vs oranges.

Here is a correct comparison. (and yes it holds Canada)

https://www.portfoliovisualizer.com/bac ... tion4_1=20

Here is a simple calculator to determine the market weighted holdings of the Schwab funds (using ETFs, Schwab doesn't have an EM mutual fund other than in their fundamental index (value) line.
https://docs.google.com/spreadsheets/d/ ... sp=sharing
interesting to see schwab international with incomplete coverage actually outperforms both vanguard international and schwab international with supplementation of additional schwab fund to give complete coverage.

so why bothers to use vanguard at all or try to get multiple schwab funds for complete coverage?
Because we don't know the future. What underperformed in the past may do better in the future and vice versa.

Otherwise we'd all go 100% FAANG.
okay, so make it simple, is it better to have a simple vanguard etf VXUS for TOTAL international coverage at the cost of $4.95 per trade but with ask/offer spread and cash drag or a schwab international fund complemented with their emerging market fund for more complicated portfolio, but no trading cost/spread/cash drag?
I don't think it makes a big difference either way. It comes down to your preference. If it's in taxable, I might prefer Schwab's funds as EM is volatile and a tax loss harvest opportunity.

Either way is spot on in any case.

Another option at Schwab is to use their Target Index funds. 0.08%ER.

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