What Fund To Buy Vanguard UTMA

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EinAustin
Posts: 120
Joined: Wed Sep 28, 2016 7:17 pm

What Fund To Buy Vanguard UTMA

Post by EinAustin »

Hi Bogleheads. I opened UTMA accounts for each daughter (3 years old and 1 year old) without thinking about the Vanguard limits on mutual funds. The accounts will have $1,500 and $700 each. The girls are half Chinese and these were red envelope gifts. They will each probably receive additional gifts but this isn't something where they will get large gifts regularly as the family isn't wealthy.

What I wasn't thinking about is the $3k limit for VTSAX. Ideally I didn't want to buy VTI for them because I want 100% invested which I've found hard to do with ETFs.

What would you do in this situation? I could contribute enough for each to have $3k now. Or is there a different fund you'd recommend I can buy at Vanguard that doesn't require a $3k minimum?
livesoft
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Re: What Fund To Buy Vanguard UTMA

Post by livesoft »

You could give enough cash to have a integral number of VTI shares with no leftover cash. Use a limit order to buy to make it so. Although I've heard that Vanguard now supports fractional share purchases of ETF. But also nothing wrong with topping up their accounts to at least $3,000.
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momopi
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Re: What Fund To Buy Vanguard UTMA

Post by momopi »

EinAustin wrote: Wed Jul 17, 2024 3:33 pm Hi Bogleheads. I opened UTMA accounts for each daughter (3 years old and 1 year old) without thinking about the Vanguard limits on mutual funds. The accounts will have $1,500 and $700 each. The girls are half Chinese and these were red envelope gifts. They will each probably receive additional gifts but this isn't something where they will get large gifts regularly as the family isn't wealthy.

What I wasn't thinking about is the $3k limit for VTSAX. Ideally I didn't want to buy VTI for them because I want 100% invested which I've found hard to do with ETFs.

What would you do in this situation? I could contribute enough for each to have $3k now. Or is there a different fund you'd recommend I can buy at Vanguard that doesn't require a $3k minimum?
Wouldn't it be easier to just deposit the money in their 529 accounts?
exodusNH
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Joined: Wed Jan 06, 2021 7:21 pm

Re: What Fund To Buy Vanguard UTMA

Post by exodusNH »

EinAustin wrote: Wed Jul 17, 2024 3:33 pm Hi Bogleheads. I opened UTMA accounts for each daughter (3 years old and 1 year old) without thinking about the Vanguard limits on mutual funds. The accounts will have $1,500 and $700 each. The girls are half Chinese and these were red envelope gifts. They will each probably receive additional gifts but this isn't something where they will get large gifts regularly as the family isn't wealthy.

What I wasn't thinking about is the $3k limit for VTSAX. Ideally I didn't want to buy VTI for them because I want 100% invested which I've found hard to do with ETFs.

What would you do in this situation? I could contribute enough for each to have $3k now. Or is there a different fund you'd recommend I can buy at Vanguard that doesn't require a $3k minimum?
At Vanguard, you can buy fractional shares of their ETFs. You just order a dollar amount.
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WinstonTeracina
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Re: What Fund To Buy Vanguard UTMA

Post by WinstonTeracina »

I believe vanguard target date fund only have a contribution minimum of $1,000. You could choose one with the highest equity allocation and then transfer to VTSAX when you are able.
VT + BNDW + Duration-matched TIPS fund (TPAW)
Topic Author
EinAustin
Posts: 120
Joined: Wed Sep 28, 2016 7:17 pm

Re: What Fund To Buy Vanguard UTMA

Post by EinAustin »

exodusNH wrote: Wed Jul 17, 2024 3:40 pm
EinAustin wrote: Wed Jul 17, 2024 3:33 pm Hi Bogleheads. I opened UTMA accounts for each daughter (3 years old and 1 year old) without thinking about the Vanguard limits on mutual funds. The accounts will have $1,500 and $700 each. The girls are half Chinese and these were red envelope gifts. They will each probably receive additional gifts but this isn't something where they will get large gifts regularly as the family isn't wealthy.

What I wasn't thinking about is the $3k limit for VTSAX. Ideally I didn't want to buy VTI for them because I want 100% invested which I've found hard to do with ETFs.

What would you do in this situation? I could contribute enough for each to have $3k now. Or is there a different fund you'd recommend I can buy at Vanguard that doesn't require a $3k minimum?
At Vanguard, you can buy fractional shares of their ETFs. You just order a dollar amount.
I didn't realize you can buy fractional shares. I've always used the calculator to buy shares closest to the amount of money I have to invest and then there is money leftover. I'll check that out.
the_wiki
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Joined: Thu Jul 28, 2022 11:14 am

Re: What Fund To Buy Vanguard UTMA

Post by the_wiki »

There are competing ETFs with much lower share price. May make it easier.

SCHB is $64
SPTM is $68
SCHK is $53
SPLG is $65


If you weren't at Vanguard, Fidelity and Schwab mutual funds often have no minimums.
WanderDad
Posts: 76
Joined: Sun Mar 17, 2024 6:50 am

Re: What Fund To Buy Vanguard UTMA

Post by WanderDad »

I just did similar for my son. Opened UTMA at Vanguard and bought fractional shares of VTI. Very straightforward.
BD w/ Kung-Fu Grip
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Joined: Wed Mar 29, 2017 1:20 pm

Re: What Fund To Buy Vanguard UTMA

Post by BD w/ Kung-Fu Grip »

EinAustin wrote: Wed Jul 17, 2024 3:33 pm Hi Bogleheads. I opened UTMA accounts for each daughter (3 years old and 1 year old) without thinking about the Vanguard limits on mutual funds. The accounts will have $1,500 and $700 each. The girls are half Chinese and these were red envelope gifts. They will each probably receive additional gifts but this isn't something where they will get large gifts regularly as the family isn't wealthy.

What I wasn't thinking about is the $3k limit for VTSAX. Ideally I didn't want to buy VTI for them because I want 100% invested which I've found hard to do with ETFs.

What would you do in this situation? I could contribute enough for each to have $3k now. Or is there a different fund you'd recommend I can buy at Vanguard that doesn't require a $3k minimum?
If you hold VTSAX, you can buy more shares and then transfer them to the children as a gift. I did this recently, not even thinking about the fact that the initial transfer was under the minimum.
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