Move SPY to VOO

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Topic Author
NotSoDaring
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Move SPY to VOO

Post by NotSoDaring »

Several years ago I started investing in SPY. When I learned about Vanguard, I started investing in VOO instead. However, I still have the SPY both in retirement account and taxable brokerage account. Recently, SPY's ER has gone from .04 to .09, while VOO has remained at .03.

Can I sell my SPY in both accounts (I assume I can in my SepIRA) and move the exact dollar amount into VOO without taking a tax hit?

TIA for any insight.
livesoft
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Re: Move SPY to VOO

Post by livesoft »

No, if you sell SPY in your taxable account you will realize capital gains and be liable for capital gains taxes. It does not matter that you will buy VOO with the money.
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aristotelian
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Re: Move SPY to VOO

Post by aristotelian »

You can sell SPY in the retirement accounts with no tax consequence. Selling it in your brokerage account will incur realized capital gains.
Topic Author
NotSoDaring
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Re: Move SPY to VOO

Post by NotSoDaring »

Okay, thank you. I clearly misunderstood that if you sell something and re-invest it in a comparable vehicle within (a short timeframe) SPY to VOO tracking the same thing, it is a wash. Clearly I am stuck with the higher ER with the SPY that I have in the taxable account.
drk
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Re: Move SPY to VOO

Post by drk »

NotSoDaring wrote: Fri Jan 14, 2022 12:33 pm Okay, thank you. I clearly misunderstood that if you sell something and re-invest it in a comparable vehicle within (a short timeframe) SPY to VOO tracking the same thing, it is a wash. Clearly I am stuck with the higher ER with the SPY that I have in the taxable account.
If you were to sell SPY for a loss, and buy VOO within 30 days before/afterward, then some would call that a wash sale. Selling for a gain doesn't get the same treatment, though.
rkhusky
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Re: Move SPY to VOO

Post by rkhusky »

NotSoDaring wrote: Fri Jan 14, 2022 12:33 pm Okay, thank you. I clearly misunderstood that if you sell something and re-invest it in a comparable vehicle within (a short timeframe) SPY to VOO tracking the same thing, it is a wash. Clearly I am stuck with the higher ER with the SPY that I have in the taxable account.
Until SPY drops by a lot, such that you don't have cap gains.

Or you are in the 0% LTCG bracket (~ 12% income tax bracket).

And a difference of 0.06% isn't that much. At least don't reinvest dividends and cap gains in SPY, so it doesn't keep growing as fast.
Topic Author
NotSoDaring
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Re: Move SPY to VOO

Post by NotSoDaring »

At least don't reinvest dividends and cap gains in SPY, so it doesn't keep growing as fast.

Good advice. I hadn't thought about that. I will take care of that immediately. Thank you.
dru808
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Re: Move SPY to VOO

Post by dru808 »

Did spy really go up in er?
Good, growth stock mutual funds.
Itogliano
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Re: Move SPY to VOO

Post by Itogliano »

dru808 wrote: Fri Jan 14, 2022 1:04 pm Did spy really go up in er?
Not sure if it's gone up but it is now .0945 (https://www.ssga.com/us/en/individual/e ... -trust-spy) which is triple that of VOO. Coincidentally, I just posted a similar thread to this
an_asker
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Re: Move SPY to VOO

Post by an_asker »

Itogliano wrote: Fri Jan 14, 2022 1:12 pm
dru808 wrote: Fri Jan 14, 2022 1:04 pm Did spy really go up in er?
Not sure if it's gone up but it is now .0945 (https://www.ssga.com/us/en/individual/e ... -trust-spy) which is triple that of VOO. Coincidentally, I just posted a similar thread to this
I hadn't realized it had gone up (if it has, that is). I only recently noticed the difference and was wondering how the returns were so close in spite of the difference in ER.

So, would love to hear confirmation from someone that the ER previously used to be that low.
Itogliano
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Re: Move SPY to VOO

Post by Itogliano »

an_asker wrote: Fri Jan 14, 2022 1:45 pm
Itogliano wrote: Fri Jan 14, 2022 1:12 pm
dru808 wrote: Fri Jan 14, 2022 1:04 pm Did spy really go up in er?
Not sure if it's gone up but it is now .0945 (https://www.ssga.com/us/en/individual/e ... -trust-spy) which is triple that of VOO. Coincidentally, I just posted a similar thread to this
I hadn't realized it had gone up (if it has, that is). I only recently noticed the difference and was wondering how the returns were so close in spite of the difference in ER.

So, would love to hear confirmation from someone that the ER previously used to be that low.
Are ERs taken into account when looking at the performance of an ETF/MF? It was my understanding they aren't.

I'm also interested. I didn't find anything in my quick Google search suggesting it increased.
dru808
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Re: Move SPY to VOO

Post by dru808 »

I’m pretty sure it’s been 9 bp it’s entire existence.
Good, growth stock mutual funds.
an_asker
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Re: Move SPY to VOO

Post by an_asker »

Itogliano wrote: Fri Jan 14, 2022 1:52 pm [...]
Are ERs taken into account when looking at the performance of an ETF/MF? It was my understanding they aren't.

I'm also interested. I didn't find anything in my quick Google search suggesting it increased.
They aren't but they are both index etfs using the same index, so the difference should manifest itself somewhere.

My point being that if the ER for SPY was similar to that of VOO for the past so many years but has suddenly increased, it makes it easier to understand that the performance of both tracks each other (thus far). But if the ER has always been higher, that appears a bit suspicious as to how they've managed to keep the performance the same. I guess there are ways it can be done with leveraging etc.
exodusNH
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Re: Move SPY to VOO

Post by exodusNH »

Itogliano wrote: Fri Jan 14, 2022 1:52 pm
an_asker wrote: Fri Jan 14, 2022 1:45 pm
Itogliano wrote: Fri Jan 14, 2022 1:12 pm
dru808 wrote: Fri Jan 14, 2022 1:04 pm Did spy really go up in er?
Not sure if it's gone up but it is now .0945 (https://www.ssga.com/us/en/individual/e ... -trust-spy) which is triple that of VOO. Coincidentally, I just posted a similar thread to this
I hadn't realized it had gone up (if it has, that is). I only recently noticed the difference and was wondering how the returns were so close in spite of the difference in ER.

So, would love to hear confirmation from someone that the ER previously used to be that low.
Are ERs taken into account when looking at the performance of an ETF/MF? It was my understanding they aren't.

I'm also interested. I didn't find anything in my quick Google search suggesting it increased.
I think it depends on what kind of chart you're looking at. The ER is not something that the company actively pulls out of peoples' holdings. They get pulled out of the fund returns before they get to you. You'll see this on funds at Vanguard where there are different share classes. E.g. a bond fund with investor and admiral shares. You'll see that the reported yield between the two differ by the ER difference.
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calmaniac
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Re: Move SPY to VOO

Post by calmaniac »

I have close to $80k in capital gains in SPY ETF I bought in 2009 in a taxable brokerage account. Since then, I've since moved to less expensive total stock market ETFs and have stopped reinvesting SPY dividends.

Yeah, I'd also rather have a ER of 0.03%! But given that this is costing me ≈$80/year, I have bigger fish to fry. If I am going to take capital gains, there are better ways to use them.
≈63yo. AA 70/30: 30% TSM, 16% value (VIOV/VFVA/AVUV), 16% foreign LC, 8%emerging, 30% GFund/VBTIX. Fed pensions now ≈60% of expenses. Taking SS @age 70--> pension+SS ≈100% of expenses. What me worry?
drk
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Re: Move SPY to VOO

Post by drk »

an_asker wrote: Fri Jan 14, 2022 2:10 pm But if the ER has always been higher, that appears a bit suspicious as to how they've managed to keep the performance the same. I guess there are ways it can be done with leveraging etc.
It's a minuscule difference in ER. Technically, that difference has grown because VOO has gotten cheaper since inception (5 bps to 4 bps to 3 bps), and we can see a difference in CAGR, although there are also structural differences between the funds because SPY is a Unit Investment Trust (no securities lending, no internal dividend reinvestment).
drk
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Re: Move SPY to VOO

Post by drk »

Itogliano wrote: Fri Jan 14, 2022 1:52 pm Are ERs taken into account when looking at the performance of an ETF/MF? It was my understanding they aren't.
What do you mean by "taken into account"?
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