is VINIX better than VTSAX ?

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shortduck
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is VINIX better than VTSAX ?

Post by shortduck » Fri Nov 08, 2019 3:20 pm

On this page :
https://investor.vanguard.com/mutual-fu ... ance/vinix
and
https://investor.vanguard.com/mutual-fu ... ance/vtsax

I see that the VINIX Since inception is 9.89%, where as VTSAX is just 6.87%, does this means that VINIX, which mirrors S&P 500, is better than total stock index ?

I also see that VINIX was started in 1990, where as VTSAX in 2000, I am not sure is this makes any difference.

JLCollins and MMM both has although suggested VTSAX/VTI [etf version].

Please let me know your thoughts, may I am missing something.

Thanks

sport
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Re: is VINIX better than VTSAX ?

Post by sport » Fri Nov 08, 2019 3:25 pm

Comparing funds over different time periods makes a lot of difference. Apples and oranges.
VINIX has a minimum purchase of $5,000,000. If you are still interested in this fund, congratulations on your success. :beer

MotoTrojan
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Re: is VINIX better than VTSAX ?

Post by MotoTrojan » Fri Nov 08, 2019 3:30 pm

VINIX is essentially just the S&P500.

As shown here since inception of VTSAX, VTSAX has actually outperformed VINIX and SPY slightly, with VINIX and SPY essentially being the same return (just differences in expense ratio, tracking errors, securities lending, etc...).

https://www.portfoliovisualizer.com/bac ... ion3_3=100

I consider VTSAX nearly identical to the S&P500 personally. The small-caps do not make a significant difference in the long-run.

Topic Author
shortduck
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Re: is VINIX better than VTSAX ?

Post by shortduck » Fri Nov 08, 2019 3:31 pm

when I say VINIX, i wanted to actually say SP500 class, so ETF version will be VOO, in this case.

So, again the same question is VOO better than VTI ?

mcraepat9
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Re: is VINIX better than VTSAX ?

Post by mcraepat9 » Fri Nov 08, 2019 3:32 pm

shortduck wrote:
Fri Nov 08, 2019 3:20 pm
On this page :
https://investor.vanguard.com/mutual-fu ... ance/vinix
and
https://investor.vanguard.com/mutual-fu ... ance/vtsax

I see that the VINIX Since inception is 9.89%, where as VTSAX is just 6.87%, does this means that VINIX, which mirrors S&P 500, is better than total stock index ?

I also see that VINIX was started in 1990, where as VTSAX in 2000, I am not sure is this makes any difference.

JLCollins and MMM both has although suggested VTSAX/VTI [etf version].

Please let me know your thoughts, may I am missing something.

Thanks
The different inception dates makes all the difference in the world. Had you started them both at 2000, you’d find their performances to be virtually identical with immaterial differences.

Short answer: no, the S&P 500 is not better than the US TSM on the basis of this info.
Last edited by mcraepat9 on Fri Nov 08, 2019 3:32 pm, edited 1 time in total.
Amateur investors are not cool-headed logicians.

almostretired1965
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Re: is VINIX better than VTSAX ?

Post by almostretired1965 » Fri Nov 08, 2019 3:32 pm

shortduck wrote:
Fri Nov 08, 2019 3:20 pm
On this page :
https://investor.vanguard.com/mutual-fu ... ance/vinix
and
https://investor.vanguard.com/mutual-fu ... ance/vtsax

I see that the VINIX Since inception is 9.89%, where as VTSAX is just 6.87%, does this means that VINIX, which mirrors S&P 500, is better than total stock index ?

I also see that VINIX was started in 1990, where as VTSAX in 2000, I am not sure is this makes any difference.

JLCollins and MMM both has although suggested VTSAX/VTI [etf version].

Please let me know your thoughts, may I am missing something.

Thanks
It makes a huge difference, when you are comparing alternative investments, you need to look at their returns over identical time intervals. If you do that, say the 10 year returns, it follows that their performance, as you might expect given what is in scope, are right on top of each other since they are both dominated by large caps. In the short run they differ a bit since VTI is all large cap whereas VTSAX include the rest of the market.

adamb
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Re: is VINIX better than VTSAX ?

Post by adamb » Fri Nov 08, 2019 3:34 pm

We have access to VINIX and not VTSAX in one of our 401ks, with no minimum investment.

Nothing else to add that hasn't already been said.

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David Jay
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Re: is VINIX better than VTSAX ?

Post by David Jay » Fri Nov 08, 2019 3:47 pm

shortduck wrote:
Fri Nov 08, 2019 3:20 pm
I also see that VINIX was started in 1990, where as VTSAX in 2000, I am not sure is this makes any difference.
This makes a huge difference. What you are looking at when you compare “since inception” numbers is the difference in the stock market environment between 1990 and 2000. Did anything noteworthy occur in that decade? Like, perhaps, “irrational exuberance”?

Look at the 10 year numbers from your links: 13.67% versus 13.63%

No significant difference.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

snailderby
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Re: is VINIX better than VTSAX ?

Post by snailderby » Fri Nov 08, 2019 3:57 pm

1. You shouldn't compare the performance of investments across vastly different time periods.

2. You shouldn't make your investing decisions based solely (or even mostly) on past performance. Past performance is no guarantee of future performance, In fact, one study found that funds that outperformed in the last 1, 3, or 5 years tended to underperform going forward (on average). See https://alphaarchitect.com/2019/05/14/t ... %ef%bb%bf/. Unsurprisingly, then, Morningstar Ratings, which "are a measure of a fund's risk-adjusted return, relative to similar funds," are not a great predictor of future returns. See www.wsj.com/articles/the-morningstar-mirage-1508946687 and https://papers.ssrn.com/sol3/papers.cfm ... _id=455240.

3. Historically, the performance of the S&P 500 has been very similar to the performance of the total stock market. From May 1992 through October 2019, one fund had a CAGR of 9.63% while the other fund had a CAGR of 9.59%. See https://www.portfoliovisualizer.com/bac ... ion2_2=100.
Last edited by snailderby on Fri Nov 08, 2019 4:00 pm, edited 1 time in total.

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Taylor Larimore
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Re: is VINIX better than VTSAX? Lesson Learned.

Post by Taylor Larimore » Fri Nov 08, 2019 3:59 pm

shortduck:

As discussed above, the returns of the S&P 500 Index (500 large-cap stocks) and the Total U.S. Stock Market Index (3555 large, mid-cap and small-cap stocks) have been virtually identical over long periods of time. This tells me that there is no long-term advantage in holding more expensive and risky mid-cap and small-cap stocks as the investment industry would like us to believe.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "My preferred index fund happens to be the total stock market which includes large, medium, and small stocks."
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1789
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Re: is VINIX better than VTSAX ?

Post by 1789 » Sat Nov 09, 2019 1:36 am

shortduck wrote:
Fri Nov 08, 2019 3:31 pm
when I say VINIX, i wanted to actually say SP500 class, so ETF version will be VOO, in this case.

So, again the same question is VOO better than VTI ?
No it is not. Their returns are highly correlated. You can’t go wrong by putting your money in world largest mutual fund “VTSAX”, if you have both choices available.
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UpperNwGuy
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Re: is VINIX better than VTSAX ?

Post by UpperNwGuy » Sat Nov 09, 2019 1:48 am

Follow the advice of JL Collins and buy VTSAx.

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nisiprius
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Re: is VINIX better than VTSAX ?

Post by nisiprius » Sat Nov 09, 2019 11:42 am

1) In my opinion, the difference between a total stock market index fund like VTSAX and an S&P 500 index fund like VINIX, hardly matters, because the S&P includes 80% of the dollars in the stock market, and because the rest of the stock market has been 93% correlated with the whole stock market.

Whenever there is any difference, no matter how small, people are going to argue about it. And because there will always be periods of time when one did better than the other, and vice versa, there is always ammunition for an argument that either one is better. The S&P 500 does not include small caps, and there's a widely-held theory that small caps are important to have in a portfolio, so some people are insistent on the superiority of Total Stock, but if you are serious about wanting small caps, you want much more of them than you get in Total Stock. So I think it hardly matters.

I personally switched to using a total market fund, from an S&P 500 fund, around 2004 or so. It wasn't because I thought it was really better. It's just that my original idea had been "just hold the whole market." The S&P 500 is often thought of as being the whole market, but a total market fund was closer to the idea I had in mind, and since it had the same expense ratio, I said "why not?"

2) Yes, the inception date matters hugely, and one of the best lessons you can learn is to poke around long-term charts of the stock market and see for yourself just how much difference it does make.

In this case, the year 2000 was roughly the year of the "dot-bomb" collapse of high-tech. The period before it, particularly 1994-2000, was one of the most spectacular bull markets in history. The decade 2000-2009 was one of the worst in history; $10,000 invested in the stock market on the exact starting day of that decade was actually worth only $9,800 on the exact ending day of the decade. That's because it began with a crash, recovered, and then crashed again.

So, VINIX's lifetime includes the great bull market of the 1990s, while VTSAX's lifetime missed out on it.

Image
Last edited by nisiprius on Sat Nov 09, 2019 2:25 pm, edited 2 times in total.
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ruralavalon
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Re: is VINIX better than VTSAX ?

Post by ruralavalon » Sat Nov 09, 2019 11:57 am

shortduck wrote:
Fri Nov 08, 2019 3:20 pm
On this page :
https://investor.vanguard.com/mutual-fu ... ance/vinix
and
https://investor.vanguard.com/mutual-fu ... ance/vtsax

I see that the VINIX Since inception is 9.89%, where as VTSAX is just 6.87%, does this means that VINIX, which mirrors S&P 500, is better than total stock index ?

I also see that VINIX was started in 1990, where as VTSAX in 2000, I am not sure is this makes any difference.

JLCollins and MMM both has although suggested VTSAX/VTI [etf version].

Please let me know your thoughts, may I am missing something.

Thanks
Comparing different time periods is meaningless.

shortduck wrote:
Fri Nov 08, 2019 3:31 pm
when I say VINIX, i wanted to actually say SP500 class, so ETF version will be VOO, in this case.

So, again the same question is VOO better than VTI ?
A S&P 500 index fund covers 82% of the U.S. stock market, investing in stocks of selected large-cap and mid-cap U.S. companies. A total stock market index fund in addition covers stocks of more mid-cap companies and also stocks of small-cap companies.

The total stock market index funds like VTI and VTSAX are a little more diversified than the S&P 500 index funds like VOO and VINIX, and have a little higher risk. In the 27 years since the creation of the first total stock market index fund the performance of the two types of funds has been almost identical. Morningstar, "growth of $10k" graph (1992 – 2019), VTSAX vs VFIAX.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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