Redemption fee applied when converting from Admiral shares to ETF?

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Sue Donim
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Joined: Sun Sep 02, 2018 10:06 am

Redemption fee applied when converting from Admiral shares to ETF?

Post by Sue Donim » Mon Jan 07, 2019 11:53 am

Hi,
I'm thinking about calling Vanguard and having them convert my Vanguard Global ex-U.S. Real Estate Index Fund Admiral Shares (VGRLX) to the equivalent Vanguard ETF (VNQI). However, the Admiral shares have a .25% redemption fee. Anyone know if converting those shares to VNQI will result in the redemption fee being applied?
Thanks,
Sue
No matter how trustworthy he seems, never give your gun to a monkey

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dratkinson
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Location: Centennial CO

Re: Redemption fee applied when converting from Admiral shares to ETF?

Post by dratkinson » Mon Jan 07, 2019 4:46 pm

Call Vanguard to double-check, but....

Recall reading a "conversion" is not a "redemption"; meaning no redemption fee should apply.

Since a conversion is not a redemption---you didn't sell---so it's also a non-taxable event; meaning you don't owe tax to convert.



Disclosure. I've never gone the "mutual fund-->ETF" route so can't guarantee above is true; but it was true when I went the "Investor shares-->Admiral shares" route. And my forum reading suggests both (MF-->ETF, Inv-->Adm) are the same.
d.r.a., not dr.a. | I'm a novice investor, you are forewarned.

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jhfenton
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Location: Ohio

Re: Redemption fee applied when converting from Admiral shares to ETF?

Post by jhfenton » Mon Jan 07, 2019 6:57 pm

Sue Donim wrote:
Mon Jan 07, 2019 11:53 am
Hi,
I'm thinking about calling Vanguard and having them convert my Vanguard Global ex-U.S. Real Estate Index Fund Admiral Shares (VGRLX) to the equivalent Vanguard ETF (VNQI). However, the Admiral shares have a .25% redemption fee. Anyone know if converting those shares to VNQI will result in the redemption fee being applied?
Thanks,
Sue
It does not apply. I did it once a couple of years ago when I decided to simplify and eliminate that holding. I converted to the ETF before selling the position to avoid the redemption fee.

Topic Author
Sue Donim
Posts: 8
Joined: Sun Sep 02, 2018 10:06 am

Re: Redemption fee applied when converting from Admiral shares to ETF?

Post by Sue Donim » Mon Jan 07, 2019 7:02 pm

jhfenton, that's my plan as well. That's what I hoped. Thank you for your response.
No matter how trustworthy he seems, never give your gun to a monkey

Topic Author
Sue Donim
Posts: 8
Joined: Sun Sep 02, 2018 10:06 am

Re: Redemption fee applied when converting from Admiral shares to ETF?

Post by Sue Donim » Mon Jan 07, 2019 7:06 pm

dratkinson, that was my suspicion as well but I will check with Vanguard before I pull the trigger. Just wanted to see if anyone had any personal experience doing this. Thank you for your response.
No matter how trustworthy he seems, never give your gun to a monkey

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