VSMAX (Small Cap fund) or VEXAX (Extended Mkt fund)?

[golfallday]

Which do you prefer for a small cap allocation? These are Admiral Class funds with .17 and .16 ERs. Vanguard's Small Cap Growth and Small Cap Value funds don't offer Admiral shares.

[wander]

The name says for itself: VSMAX.

[sendai]

The name says for itself: VSMAX.

+1. VEXAX is (very roughly) half mid caps and half small caps.

[rwwoods]

I prefer Small Cap Value over Small Cap. iShares Small Cap 600 Value (IJS)

[nisiprius]

Well, I don't tilt and I don't slice-and-dice, so take this for what it's worth...

But my opinion is that the Extended Market fund is "for" a very specific purpose. I'm not sure why it isn't spelled out. It was created before the Total Stock Market Fund, and its purpose is to mix with Vanguard Index 500 in order to own the total market. In principle I don't know why it should still exist, but in practice it would be difficult and pointless to discontinue it.

I suppose that even today, if you are a taxable investor, it might well be better to move from Index 500 to Total Stock Market by new purchases of Extended Market than by exchanging Index 500 for Total Stock Market.

Obviously you can use it in ways it isn't intended for, just as people buy the Managed Payout funds and then reinvest dividends instead of using the managed payout feature.

If I were going to slice-and-dice, that is if I wanted to control my large/mid/small allocation, it seems to me that I'd want to go all the way, with separate mid-cap and small-cap funds so I could tune the mixture to whatever I thought was appropriate. I don't know why I'd reject the fixed large/mid/small proportions in Total Stock Market index, only to accept the fixed mid/small blend in the Extended Market fund.

[golfallday]

Great help; thanks very much!! I use VIIIX and VBTIX in my 457 plan; and VTIAX in my IRA. I don't plan to slice and dice to the point of the Coffeehouse Model or Merriman's Ultimate Buy and Hold, but I would like exposure to smaller companies in US. Leaning towards VSMAX in IRA. Thanks again.

[SpringMan]

FSEMX, Spartan Ext Market Index, is a great option for folks with Fidelity with its .1% ER. Fidelity has no true small cap index funds (without using ETFs) and their actively managed small cap funds are expensive.

[livesoft]

I use both SmallCapValue index and ExtendedMarketIndex for the following reasons:

If I had already TotalStockMarket, then I already have the mid/small caps of Extended market. But I don't have a TotalStockMarket index fund. Instead I own an S&P500 index fund and a LargeCap index fund, I use ExtendedMarketIndex to give a complete total market index albeit with an overweight towards small/mid.

Then I add SmallCapValue index to tilt to small-cap and to value.

[Default User BR]

But my opinion is that the Extended Market fund is "for" a very specific purpose. I'm not sure why it isn't spelled out. It was created before the Total Stock Market Fund, and its purpose is to mix with Vanguard Index 500 in order to own the total market. In principle I don't know why it should still exist, but in practice it would be difficult and pointless to discontinue it.

Many 401(k) plans and the like do not offer total market (mine is one). Having a completion fund is useful to people who only have a 500 fund in their plan.



Brian

[Miskatonic]

So.....holding Vanguard Total Stock Market Index (VTSMX or VTSAX) along with Vanguard Extended Market Index (VTXMX or VTXAX) is not wise because of the midcap overlap?

[livesoft]

It is perfectly wise ... if you want to overweight mid and small cap stocks.

[grabiner]

Which do you prefer for a small cap allocation? These are Admiral Class funds with .17 and .16 ERs. Vanguard's Small Cap Growth and Small Cap Value funds don't offer Admiral shares.

What is your large cap allocation? Extended Market is a complement to 500 Index; Small-Cap Index is a complement to Large-Cap Index. If you hold one of those funds already (or something similar) and are trying to replicate the total market, that should determine what you use. If you are trying to overweight small-caps, that is better done with Small-Cap Index, which has a lower cap range (and if you use ETFs, the S&P and Russell small-cap ETFs have an even lower range).

[FabLab]

But my opinion is that the Extended Market fund is "for" a very specific purpose. I'm not sure why it isn't spelled out. It was created before the Total Stock Market Fund, and its purpose is to mix with Vanguard Index 500 in order to own the total market.

That's certainly the way I used it as well, to complement the 500 to round out the total U.S. market. Once the Total Market Admiral appeared, I converted ASAP. Saved me from having to be concerned with the amounts of each routine deposit relative to market weightings. Just much easier for this traveler.

[SVariance1]

Since I do not generally invest in growth, I would have to go with the Small Cap Value Fund.

Oops misread the question. I don't like either of the choices.

[YDNAL]

VSMAX (Small Cap fund) or VEXAX (Extended Mkt fund)?

Which do you prefer for a small cap allocation?

I use VIIIX and VBTIX in my 457 plan; and VTIAX in my IRA. I don't plan to slice and dice to the point of the Coffeehouse Model or Merriman's Ultimate Buy and Hold, but I would like exposure to smaller companies in US. Leaning towards VSMAX in IRA.

If you want to overweight Small Caps at the expense of Mid Caps, then, VSMAX would be choice.

• 78/22 VIIII/VEXAX
  23 24 23
  06 07 07
  03 03 03
  Matches the Total Market's cap weights.
  
  78/22 VIIIX/VSMAX
  23 24 22
  05 05 06
  05 05 05
  Overweights Small Caps at the expense of Mid Caps.

If you want to underweight Growth (Mid/Small) and overweight Small Caps and Small Value, then SCV (VISVX) would be the choice:

• 78/22 VIIII/VISVX
  23 24 22
  06 06 04
  09 06 02

What do you want?