Converting Vanguard Total Stock Market to Admiral Shares

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justint
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Converting Vanguard Total Stock Market to Admiral Shares

Post by justint » Wed Jul 22, 2009 3:05 pm

I have gone a bit over the 100k mark for VTSMX in my Scottrade taxable account. I would like to convert that over to Admiral shares + add additional funds during that purchase.

Are their any issues with just selling the shares of VTSMX and buying the equivalent amount of Admiral Shares? Is thier another way to do it besides buying Admiral Shares as I am not using Vanguard as my brokerage?


My Taxable Account Looks like this.

F 6690 6.39 42,749.10
VEIEX 640.286 21.41 13,708.5233
VGPMX 1578.523 15.72 24,814.3816
VTSMX 4728.281 23.38 110,547.2098

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bearwolf
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Re: Converting Vanguard Total Stock Market to Admiral Shares

Post by bearwolf » Wed Jul 22, 2009 3:20 pm

justint wrote:I have gone a bit over the 100k mark for VTSMX in my Scottrade taxable account. I would like to convert that over to Admiral shares + add additional funds during that purchase.

Are their any issues with just selling the shares of VTSMX and buying the equivalent amount of Admiral Shares? Is thier another way to do it besides buying Admiral Shares as I am not using Vanguard as my brokerage?


My Taxable Account Looks like this.

F 6690 6.39 42,749.10
VEIEX 640.286 21.41 13,708.5233
VGPMX 1578.523 15.72 24,814.3816
VTSMX 4728.281 23.38 110,547.2098
I don't think you want to sell and buy, that might trigger capital gains. I would call vanguard and ask them about converting them.

BearWolf

golfallday
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Post by golfallday » Wed Jul 22, 2009 3:25 pm

I LOVE Ford!!!!!

Jacobkg
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Post by Jacobkg » Wed Jul 22, 2009 4:32 pm

If you are willing to wait a quarter, Vanguard should automatically convert the shares for you.

From the Vanguard Website:

"We automatically convert these accounts to Admiral Shares for you on a quarterly basis" (in reference to accounts over $100,000).

https://personal.vanguard.com/us/conten ... iewJSP.jsp

EDIT: I realize that the above probably only applies to shares that you hold with Vanguard. This may not apply to the shares you hold at scottrade.

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CyberBob
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Re: Converting Vanguard Total Stock Market to Admiral Shares

Post by CyberBob » Wed Jul 22, 2009 4:53 pm

justint wrote:Are their any issues with just selling the shares of VTSMX and buying the equivalent amount of Admiral Shares?
Don't sell, as it will trigger a tax-reportable event.
Admiral shares are simply another share class of the same fund. Conversion is not a taxable event.

Bob

tjwolf
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Location: Minnesota

Post by tjwolf » Wed Jul 22, 2009 5:09 pm

Call Vanguard create an account, then have them transferred "in-kind". You will then have the Admiral shares.

As others have stated, do not sell, or you will create a taxable event!
Tom

livesoft
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Post by livesoft » Wed Jul 22, 2009 5:12 pm

If the shares were held directly at Vanguard, the conversion would be trivial.

Since they are held Scottrade, it kinda seems ridiculous not to transfer all your Vanguard shares in-kind to Vanguard since doesn't Scottrade charge you to buy Vanguard mutual funds?

There are issues with buying and selling. Also we read in another post that some of these brokers do not allow one to buy/sell admiral shares. Why not call of Scottrade and avail yourself of their excellent customer service to find out?

mikep
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Post by mikep » Wed Jul 22, 2009 6:33 pm

If you are at scotttrade and paying commissions, why not use the ETF class which is cheaper than admiral?

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SpringMan
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Post by SpringMan » Wed Jul 22, 2009 6:49 pm

mikep wrote:If you are at scotttrade and paying commissions, why not use the ETF class which is cheaper than admiral?
According to Vanguard's website, VTI is not cheaper, it is exactly the same at .09%. Also, selling the VTSMX and buying VTI would be a taxable event. As far as I know, conversion of VTSMX to VTI is only allowed if you have accounts at Vanguard and VBS. Then it is $50 or free for flagship clients.
Best Wishes, SpringMan

livesoft
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Post by livesoft » Wed Jul 22, 2009 6:55 pm

I think mikep was also referring to the commission to buy shares. At Scottrade, the commission to buy VTI would be significantly less than the commission to buy VTSMX or VTSAX.

There is a little bit of a behavioral finance lesson in this thread. I think that most of us cannot understand why one would buy VTSMX using a Scottrade account in the first place. And then we canoot understand why one wouldn't have transferred to Vanguard ages ago with the funds listed by the OP. We may never find out how this all happened.

mikep
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Post by mikep » Wed Jul 22, 2009 7:01 pm

Yes, referring to commissions. Sorry for confusion.

I would think if you have mostly VG funds why not just roll them in-kind to VG.

Also I hope these are not your only investments, missing bonds and developed international markets, and ford stock is way too much of the total but you didn't indicate this was your entire portfolio so I'm not sure what I can assume.

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tarnation
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Re: Converting Vanguard Total Stock Market to Admiral Shares

Post by tarnation » Wed Jul 22, 2009 10:40 pm

justint wrote:I would like to convert that over to Admiral shares + add additional funds during that purchase.

Are their any issues with just selling the shares of VTSMX and buying the equivalent amount of Admiral Shares? Is thier another way to do it besides buying Admiral Shares as I am not using Vanguard as my brokerage?

Are you positive you can get Admiral shares at your brokerage? I can't at mine.
Image

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Karl
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Re: Converting Vanguard Total Stock Market to Admiral Shares

Post by Karl » Thu Jul 23, 2009 3:46 am

tarnation wrote:Are you positive you can get Admiral shares at your brokerage? I can't at mine.
That was my understanding as well. After all, Vanguard has no idea who you are or what your balance may be if you're at another broker. Vanguard only sees one huge account that aggregates all that broker's clients.

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joe8d
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Post by joe8d » Thu Jul 23, 2009 8:19 pm

Karl wrote;
tarnation wrote:
Are you positive you can get Admiral shares at your brokerage? I can't at mine.


That was my understanding as well. After all, Vanguard has no idea who you are or what your balance may be if you're at another broker. Vanguard only sees one huge account that aggregates all that broker's clients.
I would also think that would be the case.I hold my funds directly with VG.Today one of my funds went over 100K.I clicked on that fund and saw a notation asking me if I wanted to convert to Admiral.I said yes and completed the process.Very simple,about 10 seconds and it will be effective COB tomorrow.
All the Best, | Joe

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