Would you exchange VTSAX to VTI ??

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Rajsx
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Would you exchange VTSAX to VTI ??

Post by Rajsx »

Please help me decide whether to continue with the Admiral shares of Vanguard Total Stock Market Index or exchange them for its ETF, namely VTI.

During the recent Annual Portfolio Review with the Vanguard Financial Planner, it was revealed to me, that I may come out slightly ahead if I exchange the Mutual Fund Shares with its ETFs, although the dollar amount of the benefit was not quoted. He also mentioned, it will not be a taxable event

I have long been a Buy & Hold type Investor of Vanguard Mutual Funds & although I am aware of the ETFs & their middle of the day ability to trade, since I do not trade during the day if at all, I did not pay any attention to them. I was not aware of the financial advantage of ETFs over Admiral MF.

I have around $ 2,270,000 invested in VTSAX including my & DW accounts combined, it has a 0.04 % expense ratio. I do not want to add any more maintenance chores, nor complicate my simple few number of mutual funds Portfolio, but if there is any financial advantage then I will consider the exchange. In case if I do go ahead with exchanging to ETFs, I will still stick to my buy & hold kind of management.In other words I do not plan to Day Trade.
How does one calculate the expense ratio of the ETF, I would assume as they act like individual stocks there should be minimal ongoing expenses if any at all.

Given this scenario, would you exchange the Fund shares to the ETFs & why ?
Last edited by Rajsx on Sat Jul 13, 2019 5:19 pm, edited 3 times in total.
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livesoft
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Re: Would you convert VTSAX to VTI ??

Post by livesoft »

The expense ratio of VTI is listed on Vanguard.com web site just like the expense ratio of VTSAX is listed there. It is not like a stock since it is a collection of stocks and someone has to be paid via the expense ratio to help maintain that collection.

With over seven figures in VTSAX, I would convert some just to try it out. If you find that it is no big deal, then convert the rest. If you do this in a tax-advantaged account, then you can always go back without a tax consequence.
Last edited by livesoft on Sat Jul 13, 2019 5:46 pm, edited 1 time in total.
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Silk McCue
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Re: Would you convert VTSAX to VTI ??

Post by Silk McCue »

On $2,270,000 the savings would be .01% or $227 a year. I wouldn’t do it. That is inconsequential in your financial plan.

Cheers
student
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Re: Would you convert VTSAX to VTI ??

Post by student »

I have not done the conversion and the only reason is I am afraid that Vanguard will screw up the cost basis during the process. I am also not sure how cost basis will convert because of fractional shares. (I assume they have to group fractional shares with different cost basis into one share of ETF in some cases and determine the cost basis appropriately.)
Last edited by student on Sat Jul 13, 2019 5:19 pm, edited 1 time in total.
livesoft
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Re: Would you convert VTSAX to VTI ??

Post by livesoft »

Silk McCue wrote: Sat Jul 13, 2019 5:14 pm On $2,270,000 the savings would be .01% or $227 a year. I wouldn’t do it. That is inconsequential in your financial plan.
It could even be smaller savings than that because the expense ratio is reported to the nearest 0.01%, but that means 0.035% and 0.034% round to 0.04% and 0.03%, respectively. So if the difference is 0.001%, then that's a savings of under $25 a year. :twisted:

Anyways, the Vanguard rep fulfilled their fiduciary duty and you cannot sue them for trying to keep you in VTSAX when VTI is less expensive.
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Rajsx
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Re: Would you exchange VTSAX to VTI ??

Post by Rajsx »

I appreciate the replies, keep them coming.

I have corrected the Expense Ratio to 0.04%, thanks
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1955Chevy
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Re: Would you exchange VTSAX to VTI ??

Post by 1955Chevy »

Can you buy fractional shares of the ETF? If not, I'd say stick with what you have and just use the mutual fund.
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MrJones
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Re: Would you exchange VTSAX to VTI ??

Post by MrJones »

Rajsx wrote: Sat Jul 13, 2019 5:22 pm I appreciate the replies, keep them coming.
What else do you need to know? You know you might save between $25 and $227 a year. What's stopping you from making a decision as to whether the trouble is worth that much?
Chris K Jones
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Re: Would you convert VTSAX to VTI ??

Post by Chris K Jones »

Silk McCue wrote: Sat Jul 13, 2019 5:14 pm On $2,270,000 the savings would be .01% or $227 a year. I wouldn’t do it. That is inconsequential in your financial plan.

Cheers
+1
schooner
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Re: Would you convert VTSAX to VTI ??

Post by schooner »

Silk McCue wrote: Sat Jul 13, 2019 5:14 pm On $2,270,000 the savings would be .01% or $227 a year. I wouldn’t do it. That is inconsequential in your financial plan.

Cheers
Vanguard charges 30 basis points for advisory services, so you’re paying them over $6,000 a year to answer these types of questions. Are they just trying to sell you on ETFs and not answering a basic question about expense ratios? I’d demand better service before switching anything!
sf_tech_saver
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Re: Would you exchange VTSAX to VTI ??

Post by sf_tech_saver »

No way!

The market could move far more on you between the closing day price and the opening price.

Markets almost never open exactly where they close and this percentage is likely to be far larger than the $227 savings. I would consider the risks of being 'out of the market' for even this small moment larger than the savings.

If it were me I would instead start directing new purchases into VTI.
VTI is a modern marvel
schooner
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Re: Would you exchange VTSAX to VTI ??

Post by schooner »

sf_tech_saver wrote: Sat Jul 13, 2019 5:43 pm No way!

The market could move far more on you between the closing day price and the opening price.

Markets almost never open exactly where they close and this percentage is likely to be far larger than the $227 savings. I would consider the risks of being 'out of the market' for even this small moment larger than the savings.

If it were me I would instead start directing new purchases into VTI.
To be fair, I think the switch is instantaneous and you don’t have to worry about that at least.

But the advisor should have thoroughly answered these questions! There are other potential hassles that have been discussed on this board
livesoft
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Re: Would you exchange VTSAX to VTI ??

Post by livesoft »

1955Chevy wrote: Sat Jul 13, 2019 5:25 pm Can you buy fractional shares of the ETF? If not, I'd say stick with what you have and just use the mutual fund.
At Vanguard one can do that with automatically reinvested dividends from the ETF that produced the dividends.
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sf_tech_saver
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Re: Would you exchange VTSAX to VTI ??

Post by sf_tech_saver »

schooner wrote: Sat Jul 13, 2019 5:46 pm
sf_tech_saver wrote: Sat Jul 13, 2019 5:43 pm No way!

The market could move far more on you between the closing day price and the opening price.

Markets almost never open exactly where they close and this percentage is likely to be far larger than the $227 savings. I would consider the risks of being 'out of the market' for even this small moment larger than the savings.

If it were me I would instead start directing new purchases into VTI.
To be fair, I think the switch is instantaneous and you don’t have to worry about that at least.

But the advisor should have thoroughly answered these questions! There are other potential hassles that have been discussed on this board
Ok cool -- I honestly have not done this exact switch but swapping the trading timeline of a real-time ETF and fund can be annoying.

I recently did a transfer at Fidelity into a brokerage link account and I sold the one mutual fund at the end of the prior day and it couldn't get me into the Brokerlink zero fund until the end of the next day. The market was up .6% that day :oops:
VTI is a modern marvel
schooner
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Re: Would you exchange VTSAX to VTI ??

Post by schooner »

sf_tech_saver wrote: Sat Jul 13, 2019 5:50 pm
schooner wrote: Sat Jul 13, 2019 5:46 pm
sf_tech_saver wrote: Sat Jul 13, 2019 5:43 pm No way!

The market could move far more on you between the closing day price and the opening price.

Markets almost never open exactly where they close and this percentage is likely to be far larger than the $227 savings. I would consider the risks of being 'out of the market' for even this small moment larger than the savings.

If it were me I would instead start directing new purchases into VTI.
To be fair, I think the switch is instantaneous and you don’t have to worry about that at least.

But the advisor should have thoroughly answered these questions! There are other potential hassles that have been discussed on this board
Ok cool -- I honestly have not done this exact switch but swapping the trading timeline of a real-time ETF and fund can be annoying.

I recently did a transfer at Fidelity into a brokerage link account and I sold the one mutual fund at the end of the prior day and it couldn't get me into the Brokerlink zero fund until the end of the next day. The market was up .6% that day :oops:
Oof, I’m sorry! Yeah, Vanguard’s dual structure protects you that way. But you can never convert back (without selling and repurchasing), there have been reports of cost basis screw ups, and there are other, in my opinion, serious issues with ETFs in general, although a lot of people really disagree with me :-)
Trader Joe
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Re: Would you exchange VTSAX to VTI ??

Post by Trader Joe »

Rajsx wrote: Sat Jul 13, 2019 4:59 pm Please help me decide whether to continue with the Admiral shares of Vanguard Total Stock Market Index or exchange them for its ETF, namely VTI.

During the recent Annual Portfolio Review with the Vanguard Financial Planner, it was revealed to me, that I may come out slightly ahead if I exchange the Mutual Fund Shares with its ETFs, although the dollar amount of the benefit was not quoted. He also mentioned, it will not be a taxable event

I have long been a Buy & Hold type Investor of Vanguard Mutual Funds & although I am aware of the ETFs & their middle of the day ability to trade, since I do not trade during the day if at all, I did not pay any attention to them. I was not aware of the financial advantage of ETFs over Admiral MF.

I have around $ 2,270,000 invested in VTSAX including my & DW accounts combined, it has a 0.04 % expense ratio. I do not want to add any more maintenance chores, nor complicate my simple few number of mutual funds Portfolio, but if there is any financial advantage then I will consider the exchange. In case if I do go ahead with exchanging to ETFs, I will still stick to my buy & hold kind of management.In other words I do not plan to Day Trade.
How does one calculate the expense ratio of the ETF, I would assume as they act like individual stocks there should be minimal ongoing expenses if any at all.

Given this scenario, would you exchange the Fund shares to the ETFs & why ?
No, I would not exchange VTSAX for VTI. I avoid ETFs and I will never invest in them. No need. Best of luck.
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Re: Would you exchange VTSAX to VTI ??

Post by jyoung »

I do not want to add any more maintenance chores
Then no, I would keep the MF version. This is reason I do not use ETFs. To contribute or withdraw with ETFs at Vanguard it has to be done by shares, not dollar amounts like a MF... Not necessary a huge deal, but just adds a little more work. If you like to feel like you are trading stock then go ETF, if you like simplicity stick with MF. Pretty simple situation if you are using Vanguard funds at Vanguard.
arf30
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Re: Would you exchange VTSAX to VTI ??

Post by arf30 »

I don't really see a reason to convert to ETFs, MFs let me buy directly from a bank account, auto invest on a schedule, can be bought and sold in any dollar amount, and don't require messing around with market or limit orders. There's also a risk they scramble more than a decade of cost basis on my account.

I'd only consider it if I need to pack up and move to a different brokerage.
nix4me
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Re: Would you exchange VTSAX to VTI ??

Post by nix4me »

Yes i would - why not save money?

My preference is ETFs, especially in taxable account. Makes it much easier to buy and sell without wondering what the market is going to do all day and night while your order is sitting there doing nothing while the price fluctuates all over the place.

In an IRA - depends on how you buy - if you buy $6000 at once, use ETFs - if you put $200 a month, use mutuals.

401K - mutual funds of course.
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Re: Would you exchange VTSAX to VTI ??

Post by Nate79 »

Yes I would and have done this exact conversion in the process. Savings is savings.
jyoung
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Re: Would you exchange VTSAX to VTI ??

Post by jyoung »

I wish my friends and coworkers were on this forum. In 'normal' life they all give me a hard time because of the amount of effort I will go through just to try and save a dollar. BUT on here I sometimes feel like I'm just frivolously throwing away money when I take the mutual fund side of the potential 1 basis point debate, and all because I find them to be easier. It feels good to be the one carelessly throwing around money for a change!

But if I had 2 or 3 million and wasn't still frequently contributing, my cheap side might come out and I'd probably consider ETFs. :beer
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Re: Would you exchange VTSAX to VTI ??

Post by j0nnyg1984 »

I did when I moved from vanguard to Merrill edge, but otherwise wouldn’t have. If there is indeed a lower expense ration / cost savings, I would certainly consider it.
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Re: Would you exchange VTSAX to VTI ??

Post by lostdog »

Trader Joe wrote: Sat Jul 13, 2019 7:23 pm
Rajsx wrote: Sat Jul 13, 2019 4:59 pm Please help me decide whether to continue with the Admiral shares of Vanguard Total Stock Market Index or exchange them for its ETF, namely VTI.

During the recent Annual Portfolio Review with the Vanguard Financial Planner, it was revealed to me, that I may come out slightly ahead if I exchange the Mutual Fund Shares with its ETFs, although the dollar amount of the benefit was not quoted. He also mentioned, it will not be a taxable event

I have long been a Buy & Hold type Investor of Vanguard Mutual Funds & although I am aware of the ETFs & their middle of the day ability to trade, since I do not trade during the day if at all, I did not pay any attention to them. I was not aware of the financial advantage of ETFs over Admiral MF.

I have around $ 2,270,000 invested in VTSAX including my & DW accounts combined, it has a 0.04 % expense ratio. I do not want to add any more maintenance chores, nor complicate my simple few number of mutual funds Portfolio, but if there is any financial advantage then I will consider the exchange. In case if I do go ahead with exchanging to ETFs, I will still stick to my buy & hold kind of management.In other words I do not plan to Day Trade.
How does one calculate the expense ratio of the ETF, I would assume as they act like individual stocks there should be minimal ongoing expenses if any at all.

Given this scenario, would you exchange the Fund shares to the ETFs & why ?
No, I would not exchange VTSAX for VTI. I avoid ETFs and I will never invest in them. No need. Best of luck.
+1

Plus you're not saving much. ETF's are too much of a hassle compared to index mutual funds.
lostdog
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Re: Would you exchange VTSAX to VTI ??

Post by lostdog »

nix4me wrote: Sat Jul 13, 2019 9:12 pm Yes i would - why not save money?

My preference is ETFs, especially in taxable account. Makes it much easier to buy and sell without wondering what the market is going to do all day and night while your order is sitting there doing nothing while the price fluctuates all over the place.

In an IRA - depends on how you buy - if you buy $6000 at once, use ETFs - if you put $200 a month, use mutuals.

401K - mutual funds of course.

Most people don't sit and watch the market all day and time their etf buy.
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Re: Would you exchange VTSAX to VTI ??

Post by CoastalWinds »

My understanding (from Alan Roth) is that the ERs are:

VTSAX = 0.04%
VTI = 0.035%

Can anyone confirm?

If so, this is a difference of 0.005%.

This is a cost of $50 for every $1M invested.

Considering the simplicity of MFs, it doesn’t seem worth it.
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Re: Would you exchange VTSAX to VTI ??

Post by wootwoot »

ETFs at Vanguard are just as easy as mutual funds, you'll see no difference other than lower fees. Save yourself some money and switch to the ETF.
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Re: Would you exchange VTSAX to VTI ??

Post by Jefferson »

I’d leave it alone. The amount of money you would save on ER costs is barely a rounding error.

Just keep in mind that the conversion only goes one way. If you regret it later, you’re stuck.
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Re: Would you exchange VTSAX to VTI ??

Post by dbr »

Rajsx wrote: Sat Jul 13, 2019 4:59 pm
During the recent Annual Portfolio Review with the Vanguard Financial Planner, it was revealed to me, that I may come out slightly ahead if I exchange the Mutual Fund Shares with its ETFs, although the dollar amount of the benefit was not quoted. He also mentioned, it will not be a taxable event
It is bad financial advising to suggest to people that they do things but not be clear why. There just is not any reason for a person holding the mutual fund at Vanguard to switch to the ETF willy-nilly. It might be staying in the MF is a little bit better idea. Of course it was probably not advice but just a casual mention in case someone might ask later why it wasn't mentioned.

I hold the ETF rather than the MF but that is at a broker that is not Vanguard and they don't offer Admiral shares and the trading cost for mutual fund is a lot higher than for the ETF. I don't trade anyway mostly.
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Re: Would you exchange VTSAX to VTI ??

Post by just1question »

I've been noticing slightly lower expense ratios on some ETFs relative to comparable MFs, as well as purchase fees (usually like 0.25%) on some MFs but not on ETFs (e.g., corp. bond funds). Does anyone get the sense that Vanguard is trying to move its business model away from mutual funds and over the ETFs? I understand (from posts on this site) that ETFs are less expensive and/or involve less paperwork for Vanguard than MFs. Any insight?

By the way, I've mostly stayed with MFs at Vanguard. IMO, there are minor benefits to each MF v ETFs, but nothing overwhelming one way or the other unless you are a day trader.
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Rajsx
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Re: Would you exchange VTSAX to VTI ??

Post by Rajsx »

I am tilting towards staying with Mutual Funds, as the marginal benefit of ETfs is just not worth it. Yes, converting to ETFs was NOT a advice but a answer to my curiosity about the ETFs.

The Annual (or as needed) Check Up with the Vanguard Financial Planner is complimentary for me, I do not subscribe to the 0.3% PAS.

I believe the fees for some Vanguard ETFs are being /have been reduced.

Thanks every body.
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Re: Would you exchange VTSAX to VTI ??

Post by aussiedog »

I am in almost the exact same position as the OP.
I also don't subscribe to the 0.3% PAS but my complimentary review with their financial planner resulted in the same suggestion.

I did the conversion and it was quite simple. Probably not a big difference either way, but the conversion took a few seconds and went smoothly and I have had no regrets.
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Re: Would you exchange VTSAX to VTI ??

Post by michaeljmroger »

schooner wrote: Sat Jul 13, 2019 5:55 pm there are other, in my opinion, serious issues with ETFs in general
Such as?
aristotelian
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Re: Would you exchange VTSAX to VTI ??

Post by aristotelian »

I'd switch. It's only a couple hundred bucks now, but remember those fees are charged every year, and fees add up over time. No reason not to.
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Re: Would you exchange VTSAX to VTI ??

Post by gd »

wootwoot wrote: Sun Jul 14, 2019 12:09 pm ETFs at Vanguard are just as easy as mutual funds, you'll see no difference other than lower fees. Save yourself some money and switch to the ETF.
You may not care about the differences, but not accurate.
https://investor.vanguard.com/etf/etf-vs-mutual-fund
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Re: Would you exchange VTSAX to VTI ??

Post by ruralavalon »

livesoft wrote: Sat Jul 13, 2019 5:17 pm
Silk McCue wrote: Sat Jul 13, 2019 5:14 pm On $2,270,000 the savings would be .01% or $227 a year. I wouldn’t do it. That is inconsequential in your financial plan.
It could even be smaller savings than that because the expense ratio is reported to the nearest 0.01%, but that means 0.035% and 0.034% round to 0.04% and 0.03%, respectively. So if the difference is 0.001%, then that's a savings of under $25 a year. :twisted:

Anyways, the Vanguard rep fulfilled their fiduciary duty and you cannot sue them for trying to keep you in VTSAX when VTI is less expensive.
CoastalWinds wrote: Sun Jul 14, 2019 11:57 am My understanding (from Alan Roth) is that the ERs are:

VTSAX = 0.04%
VTI = 0.035%

Can anyone confirm?

If so, this is a difference of 0.005%.

This is a cost of $50 for every $1M invested.

Considering the simplicity of MFs, it doesn’t seem worth it.
I wouldn't bother. I haven't switched to Etfs.
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Re: Would you exchange VTSAX to VTI ??

Post by jrbdmb »

I moved money to Vanguard ETFs when I opened an account at Merrill Edge, since ETF transactions cost me $0 vs. $20 for the corresponding Vanguard mutual funds.

But at Vanguard itself? I prefer to keep it simple, not have to think about fractional shares / bid-ask spread / premium-discount, and if I pay 0.001% more in fees then so be it. And it is quite possible that after factoring in the bid-ask spread (twice) plus potential premiums on a specific ETF trade the mutual fund transaction might cost less than the corresponding ETF transaction.
Last edited by jrbdmb on Mon Jul 15, 2019 10:47 am, edited 1 time in total.
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Re: Would you exchange VTSAX to VTI ??

Post by Jack FFR1846 »

Would you prefer to pay more money or less money for exactly the same investment?

Personally.....call me crazy.....I like paying less money. I also accept RSUs at work and any raise that might come my way.

VTSAX and VTI are the same. Yes, I would swap them to save even $3 on over $2MM. But I still pick up coins from the parking lot while others throw their coins out because they're such a bother. The added bonus is that ETFs can easily be transferred elsewhere. I did that recently too....moving VEA from Vanguard to TDA. Easy, peasy.
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Re: Would you exchange VTSAX to VTI ??

Post by jrbdmb »

Jack FFR1846 wrote: Mon Jul 15, 2019 10:45 am Would you prefer to pay more money or less money for exactly the same investment?

Personally.....call me crazy.....I like paying less money. I also accept RSUs at work and any raise that might come my way.

VTSAX and VTI are the same. Yes, I would swap them to save even $3 on over $2MM. But I still pick up coins from the parking lot while others throw their coins out because they're such a bother. The added bonus is that ETFs can easily be transferred elsewhere. I did that recently too....moving VEA from Vanguard to TDA. Easy, peasy.
If the bid-ask spread is two cents on VTI, a $2M order will cost you about $260 to save that $3 in expenses. :twisted:
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Re: Would you exchange VTSAX to VTI ??

Post by schooner »

jrbdmb wrote: Mon Jul 15, 2019 10:54 am
Jack FFR1846 wrote: Mon Jul 15, 2019 10:45 am Would you prefer to pay more money or less money for exactly the same investment?

Personally.....call me crazy.....I like paying less money. I also accept RSUs at work and any raise that might come my way.

VTSAX and VTI are the same. Yes, I would swap them to save even $3 on over $2MM. But I still pick up coins from the parking lot while others throw their coins out because they're such a bother. The added bonus is that ETFs can easily be transferred elsewhere. I did that recently too....moving VEA from Vanguard to TDA. Easy, peasy.
If the bid-ask spread is two cents on VTI, a $2M order will cost you about $260 to save that $3 in expenses. :twisted:
To be fair, I don't believe there is a bid/ask spread for the initial conversion. But you will pay one for new contributions and every time dividends are reinvested. I'm sure someone will correct me if I'm wrong.
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Re: Would you exchange VTSAX to VTI ??

Post by CoastalWinds »

schooner wrote: Mon Jul 15, 2019 11:06 am
jrbdmb wrote: Mon Jul 15, 2019 10:54 am
Jack FFR1846 wrote: Mon Jul 15, 2019 10:45 am Would you prefer to pay more money or less money for exactly the same investment?

Personally.....call me crazy.....I like paying less money. I also accept RSUs at work and any raise that might come my way.

VTSAX and VTI are the same. Yes, I would swap them to save even $3 on over $2MM. But I still pick up coins from the parking lot while others throw their coins out because they're such a bother. The added bonus is that ETFs can easily be transferred elsewhere. I did that recently too....moving VEA from Vanguard to TDA. Easy, peasy.
If the bid-ask spread is two cents on VTI, a $2M order will cost you about $260 to save that $3 in expenses. :twisted:
To be fair, I don't believe there is a bid/ask spread for the initial conversion. But you will pay one for new contributions and every time dividends are reinvested. I'm sure someone will correct me if I'm wrong.
If true, then why not just buy the MF and then convert? Seems like an obvious loophole that would have been closed.
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Re: Would you exchange VTSAX to VTI ??

Post by Vulcan »

Rajsx wrote: Sat Jul 13, 2019 4:59 pm I have around $ 2,270,000 invested in VTSAX including my & DW accounts combined, it has a 0.04 % expense ratio. I do not want to add any more maintenance chores, nor complicate my simple few number of mutual funds Portfolio, but if there is any financial advantage then I will consider the exchange. In case if I do go ahead with exchanging to ETFs, I will still stick to my buy & hold kind of management.In other words I do not plan to Day Trade.
How does one calculate the expense ratio of the ETF, I would assume as they act like individual stocks there should be minimal ongoing expenses if any at all.

Given this scenario, would you exchange the Fund shares to the ETFs & why ?
This post by ogd really ought to be a sticky:

ETF's instead of index funds?
If you torture the data long enough, it will confess to anything. ~Ronald Coase
Shael_AT
Posts: 49
Joined: Mon Jul 15, 2019 2:36 pm

Re: Would you exchange VTSAX to VTI ??

Post by Shael_AT »

I am satisfied with automated investments into VTSAX versus logging into a web portal once a month, or twice, to commit an order on an ETF since it does not support fractional shares.

My time and patience is worth more than the difference in .04 vs .03. Logging in and buying an equity 2x a month, thats easily 12-15 minutes a month. 2.4 through 3 hours a year. Not including the mental drain of absolutely not looking forward to those events, scheduling it and then being reminded of the purchase.

Absolute nonsense. I'll take the simplicity any day.
schooner
Posts: 388
Joined: Sun Jun 09, 2019 8:27 am

Re: Would you exchange VTSAX to VTI ??

Post by schooner »

CoastalWinds wrote: Mon Jul 15, 2019 3:59 pm
schooner wrote: Mon Jul 15, 2019 11:06 am
jrbdmb wrote: Mon Jul 15, 2019 10:54 am
Jack FFR1846 wrote: Mon Jul 15, 2019 10:45 am Would you prefer to pay more money or less money for exactly the same investment?

Personally.....call me crazy.....I like paying less money. I also accept RSUs at work and any raise that might come my way.

VTSAX and VTI are the same. Yes, I would swap them to save even $3 on over $2MM. But I still pick up coins from the parking lot while others throw their coins out because they're such a bother. The added bonus is that ETFs can easily be transferred elsewhere. I did that recently too....moving VEA from Vanguard to TDA. Easy, peasy.
If the bid-ask spread is two cents on VTI, a $2M order will cost you about $260 to save that $3 in expenses. :twisted:
To be fair, I don't believe there is a bid/ask spread for the initial conversion. But you will pay one for new contributions and every time dividends are reinvested. I'm sure someone will correct me if I'm wrong.
If true, then why not just buy the MF and then convert? Seems like an obvious loophole that would have been closed.
Good question! My guess is that a lot of folks really don't care because they think they can time the market with buy-limit orders and make up any bid/ask spread costs when they purchase. Considering the unique tax structure of Vanguard Funds, the "trade" part of exchange traded funds seems to be its most attractive feature.
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