Vanguard Advertising Mutual Fund to ETF Conversion

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TropikThunder
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by TropikThunder »

southerndoc wrote: Sat Jun 29, 2019 9:58 am Why are ETF's more tax efficient?
Tax efficiency refers to on-going tax costs while holding, not due to capital gains when you sell shares. Those on-going costs come from dividends and LT and ST capital gains distributed by the fund itself. Dividends are unavoidable since the fund has to distribute whatever they collect from the underlying holdings but capital gains depend on turnover (buying and selling to track an index and to balance net inflows and outflows into the fund).

In general, ETF’s have more tools to avoid realizing LT capital gains due to the creation/redemption process carried out by Authorized Participants. Vanguard’s proprietary dual-fund structure allows Vanguard mutual funds to share the tax advantage of their ETF partner (google “heartbeat trades”) so for Vanguard the ETF class isn’t more efficient since the mutual fund is equally efficient.
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oldzey
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by oldzey »

I was curious about the conversion process, so I experimented with my Roth IRA (located at Vanguard) on Friday.

My Roth IRA solely contained VTSAX (Vanguard Total Stock Market Index Fund Admiral Shares).

After logging in, I responded to the welcome screen prompting me to convert my mutual funds to ETFs.

I pushed 3 or 4 buttons to convert VTSAX to VTI (Vanguard Total Stock Market ETF).

On Saturday, I woke up and checked my Roth IRA.

Sure enough, the former VTSAX mutual fund was converted into VTI ETFs, which included fractional ETF shares.

My settlement fund had $0.00 before and $0.00 after, so it was a 100% conversion from mutual fund to ETFs.

Overall it was a quick and painless process. My transaction history shows 2 adjustments (-VTSAX, +VTI):

Image
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Silence Dogood
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by Silence Dogood »

oldzey wrote: Sat Jun 29, 2019 7:04 pm I was curious about the conversion process, so I experimented with my Roth IRA (located at Vanguard) on Friday.

My Roth IRA solely contained VTSAX (Vanguard Total Stock Market Index Fund Admiral Shares).

After logging in, I responded to the welcome screen prompting me to convert my mutual funds to ETFs.

I pushed 3 or 4 buttons to convert VTSAX to VTI (Vanguard Total Stock Market ETF).

On Saturday, I woke up and checked my Roth IRA.

Sure enough, the former VTSAX mutual fund was converted into VTI ETFs, which included fractional ETF shares.

My settlement fund had $0.00 before and $0.00 after, so it was a 100% conversion from mutual fund to ETFs.

Overall it was a quick and painless process. My transaction history shows 2 adjustments (-VTSAX, +VTI):

Image
Looks good!

Now, will Vanguard continue to allow you to buy fractional shares (aside from reinvestment of dividends) or is that a one-off event?

Hopefully Vanguard will allow that and come up with some way to easily do automatic contributions.

Until then (and possibly even after that), I will remain in the mutual fund camp.
Last edited by Silence Dogood on Sat Jun 29, 2019 8:47 pm, edited 1 time in total.
stan1
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by stan1 »

Silence Dogood wrote: Sat Jun 29, 2019 9:49 am
Right now, with Vanguard, I have my account set up to automatically contribute up to the maximum contribution limit into my Roth IRA on the first market day of the year (so, for example, on January 2nd of this year $6,000 was contributed). The amount is pulled directly from my bank account into the fund I invest in (a Vanguard Target Retirement fund) and the amount adjusts automatically if the maximum IRA contribution limit increases ($5,500 was contributed on January 2nd, 2018, $6,000 was contributed on January 2nd, 2019).

Is this possible to do with ETFs? I have set up accounts for others to work this way (automatically contributing a certain amount each month) who know very little about investing. I'm sure I could learn how to do a limit order but I'm not sure that they would feel comfortable doing this.
The key part is yes it can be done. You can initiate an order to buy ETFs in dollars at M1 Finance. They execute the trade in the middle of the day (9AM central) and buy fractional shares so that the full amount is invested. They also support rebalancing within the "pie" [their term for a portfolio] you set up (works similar to Vanguard's exchange functionality for mutual funds).

I don't know if they have a patent on this (hope not). I'd expect others will offer something similar eventually. Could be a very big change to a brokerage's trading software if it wasn't written that way to begin with.
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by drk »

Silence Dogood wrote: Sat Jun 29, 2019 8:33 pm Now, will Vanguard continue to allow you to buy fractional shares (aside from reinvestment of dividends) or is that a one-off event?
The Admiral-to-ETF conversion is the ability to buy fractional shares. Keep automatically investing into the mutual fund. Once a week/month/quarter/year, log on and convert your holdings to the ETF share class.
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by Silence Dogood »

drk wrote: Sat Jun 29, 2019 8:51 pm
Silence Dogood wrote: Sat Jun 29, 2019 8:33 pm Now, will Vanguard continue to allow you to buy fractional shares (aside from reinvestment of dividends) or is that a one-off event?
The Admiral-to-ETF conversion is the ability to buy fractional shares. Keep automatically investing into the mutual fund. Once a week/month/quarter/year, log on and convert your holdings to the ETF share class.
I keep things simple by investing in a Target Retirement fund.

Supposedly Vanguard is planning to switch to ETFs for the underlying funds, while the Target Retirement fund itself will remain as a mutual fund.

That would be perfectly fine with me.
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by changingtimes »

oldzey wrote: Sat Jun 29, 2019 7:04 pm I was curious about the conversion process, so I experimented with my Roth IRA (located at Vanguard) on Friday.

My Roth IRA solely contained VTSAX (Vanguard Total Stock Market Index Fund Admiral Shares).
My Roth is also only VTSAX, and while I wasn't really that excited about the whole ETF thing, I figured, what the heck, it's in the Roth, might as well, so I went ahead and clicked through the conversion process this afternoon. It definitely was easy, and clearly they are starting with just a few people and maybe even just with Roths. Which is wise.
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by oldzey »

drk wrote: Sat Jun 29, 2019 8:51 pm
Silence Dogood wrote: Sat Jun 29, 2019 8:33 pm Now, will Vanguard continue to allow you to buy fractional shares (aside from reinvestment of dividends) or is that a one-off event?
The Admiral-to-ETF conversion is the ability to buy fractional shares. Keep automatically investing into the mutual fund. Once a week/month/quarter/year, log on and convert your holdings to the ETF share class.
+1

Great tip, drk - thanks!
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TropikThunder
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by TropikThunder »

drk wrote: Sat Jun 29, 2019 8:51 pm
Silence Dogood wrote: Sat Jun 29, 2019 8:33 pm Now, will Vanguard continue to allow you to buy fractional shares (aside from reinvestment of dividends) or is that a one-off event?
The Admiral-to-ETF conversion is the ability to buy fractional shares. Keep automatically investing into the mutual fund. Once a week/month/quarter/year, log on and convert your holdings to the ETF share class.
If you convert all of your VTSAX into VTI like oldzey just did, can he “automatically invest” next month with less than the $3,000 minimum needed to open a position in VTSAX? If not, I don’t see how he can repeatedly buy back into VTSAX and do serial conversions (at least not in an IRA with a $6,000 yearly limit).
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by fortyofforty »

TropikThunder wrote: Sun Jun 30, 2019 1:48 am
drk wrote: Sat Jun 29, 2019 8:51 pm
Silence Dogood wrote: Sat Jun 29, 2019 8:33 pm Now, will Vanguard continue to allow you to buy fractional shares (aside from reinvestment of dividends) or is that a one-off event?
The Admiral-to-ETF conversion is the ability to buy fractional shares. Keep automatically investing into the mutual fund. Once a week/month/quarter/year, log on and convert your holdings to the ETF share class.
If you convert all of your VTSAX into VTI like oldzey just did, can he “automatically invest” next month with less than the $3,000 minimum needed to open a position in VTSAX? If not, I don’t see how he can repeatedly buy back into VTSAX and do serial conversions (at least not in an IRA with a $6,000 yearly limit).
He can't. And he eventually will be limited by frequent trading rules by Vanguard, in my opinion. No reason to end up with an additional "fund" for every fund you want to have, which is the antithesis of simplicity. In a three fund portfolio, you suddenly have a six fund portfolio, not even including the Settlement Fund.
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by arf30 »

If this is only being offered in retirement accounts it might just be an exchange under the hood and not a conversion.
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by anon_investor »

If they allowed for outright fractional share purchases I would do it... Sounds like they only allow for that if it is divided reinvestment...
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by alex_686 »

Silence Dogood wrote: Sat Jun 29, 2019 9:49 am To me, it sounds like mutual funds are automatics in your analogy (less efficient, more convenient).
2 modest points. First, it is a analogy. You can only push a analogy so far. The thrust is no matter how much you like one thing, be it mutual funds or manual transmissions, if the market moves away there is little you can do.

Second, ETFs are so much more convenient than mutual funds - from Vanguard's perspective.

[EDIT] So, earlier this week I watched as 3 mutual fund settlement people and 2 Vanguard reps tried to figure out how to fix a broken mutual fund trade. If this had been a ETF Vanguard would have been out of the loop. In my personal experience in operations, mutual funds always has the bigger staff even though mutual funds are a lower percentage of AUM and has a lower trading volume. Stocks (which includes ETFs) offers a much smoother ride.
Former brokerage operations & mutual fund accountant. I hate risk, which is why I study and embrace it.
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by abuss368 »

There is the additional cost of the bid / ask spread.
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by abuss368 »

I am curious if Vanguard will make the conversion a requirement in the future.
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by Crushtheturtle »

I would like to know how Vanguard converts the cost basis of Spec ID lots from MF to ETF. Do they just assume the closing ETF price on the day in question? I suppose they would have to, how else to calculate ETF share quantity purchased?
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by TropikThunder »

abuss368 wrote: Sun Jun 30, 2019 9:47 am There is the additional cost of the bid / ask spread.
For “BH-approved” broad market ETF’s, the spread is inconsequential (usually a penny per share). This is pointed out each time someone mentions the spread.
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by sycamore »

Crushtheturtle wrote: Sun Jun 30, 2019 10:18 am I would like to know how Vanguard converts the cost basis of Spec ID lots from MF to ETF. Do they just assume the closing ETF price on the day in question? I suppose they would have to, how else to calculate ETF share quantity purchased?
Allan Roth wrote up his experience converting some mutual funds to ETFs: https://www.etf.com/sections/index-inve ... nopaging=1 Conversion was at the net asset value.

Your cost basis in dollar terms does not change with the conversion. The cost basis per share will of course be different after the conversion, but it seems to me the cost basis in dollar terms is what's important to track (i.e., for reporting capital gain or loss when/if you sell the shares later).

Links to some experiences with the conversion process:
viewtopic.php?t=176594
viewtopic.php?t=240009

Hope that helps!
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by abuss368 »

TropikThunder wrote: Sun Jun 30, 2019 10:30 am
abuss368 wrote: Sun Jun 30, 2019 9:47 am There is the additional cost of the bid / ask spread.
For “BH-approved” broad market ETF’s, the spread is inconsequential (usually a penny per share). This is pointed out each time someone mentions the spread.
Thanks for pointing out as I never saw that before. Glad to hear it is immaterial. We may all end up with ETFs someday.
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by drk »

TropikThunder wrote: Sun Jun 30, 2019 1:48 am If you convert all of your VTSAX into VTI like oldzey just did, can he “automatically invest” next month with less than the $3,000 minimum needed to open a position in VTSAX? If not, I don’t see how he can repeatedly buy back into VTSAX and do serial conversions (at least not in an IRA with a $6,000 yearly limit).
Easy solution: don't convert all holdings in the fund. Leave $3000 or $100 or $1 behind so that automatic investment can continue.

It's an exercise best left to the reader to decide how to do this if they're so inclined. Given that ETFs are involved, some posters will promote FUD, but this doesn't have to be complicated.
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by drk »

abuss368 wrote: Sun Jun 30, 2019 11:47 am Thanks for pointing out as I never saw that before. Glad to hear it is immaterial. We may all end up with ETFs someday.
Even better: as retail investors we rarely if ever pay the spread on the ETFs TropikThunder alluded to.
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by abuss368 »

drk wrote: Sun Jun 30, 2019 12:50 pm
abuss368 wrote: Sun Jun 30, 2019 11:47 am Thanks for pointing out as I never saw that before. Glad to hear it is immaterial. We may all end up with ETFs someday.
Even better: as retail investors we rarely if ever pay the spread on the ETFs TropikThunder alluded to.
Thanks. While Vanguard did mention to me on a telephone call that they won’t force a change to clients they also said at some point in the future they wanted to be on one platform in an effort to further reduce costs.
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by oldzey »

drk wrote: Sun Jun 30, 2019 12:49 pm
TropikThunder wrote: Sun Jun 30, 2019 1:48 am If you convert all of your VTSAX into VTI like oldzey just did, can he “automatically invest” next month with less than the $3,000 minimum needed to open a position in VTSAX? If not, I don’t see how he can repeatedly buy back into VTSAX and do serial conversions (at least not in an IRA with a $6,000 yearly limit).
Easy solution: don't convert all holdings in the fund. Leave $3000 or $100 or $1 behind so that automatic investment can continue.

It's an exercise best left to the reader to decide how to do this if they're so inclined. Given that ETFs are involved, some posters will promote FUD, but this doesn't have to be complicated.
I personally do not automatically invest in my Roth IRA (but I do in my 403b). Annually, I usually make 1 or 2 contributions to max out my Roth IRA.

Starting next January, I'll simply purchase VTSAX once or twice in my Roth IRA and then convert VTSAX entirely to VTI, like I just did.
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by jhfenton »

I'm looking forward to the online conversion tool making its way to VFSAX/Vanguard FTSE All-World ex-US Small Cap and VEMAX/Vanguard Emerging Markets. I have a small rollover IRA that is entirely invested in VEMAX, and with the ETF at 12 bp now vs 14 bp, I'd like to convert it. That account is entirely static. The only time I would add to it would be if I changed jobs.
Crushtheturtle wrote: Sun Jun 30, 2019 10:18 am I would like to know how Vanguard converts the cost basis of Spec ID lots from MF to ETF. Do they just assume the closing ETF price on the day in question? I suppose they would have to, how else to calculate ETF share quantity purchased?
Conversions are done at ETF NAV, not ETF market price. All lots are converted at the relevant NAV-to-NAV ratio.
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by stan1 »

jhfenton wrote: Mon Jul 01, 2019 12:03 pm I'm looking forward to the online conversion tool making its way to VFSAX/Vanguard FTSE All-World ex-US Small Cap and VEMAX/Vanguard Emerging Markets. I have a small rollover IRA that is entirely invested in VEMAX, and with the ETF at 12 bp now vs 14 bp, I'd like to convert it. That account is entirely static. The only time I would add to it would be if I changed jobs.
Why not call and initiate a conversion instead of waiting?
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by jhfenton »

stan1 wrote: Mon Jul 01, 2019 12:47 pm
jhfenton wrote: Mon Jul 01, 2019 12:03 pm I'm looking forward to the online conversion tool making its way to VFSAX/Vanguard FTSE All-World ex-US Small Cap and VEMAX/Vanguard Emerging Markets. I have a small rollover IRA that is entirely invested in VEMAX, and with the ETF at 12 bp now vs 14 bp, I'd like to convert it. That account is entirely static. The only time I would add to it would be if I changed jobs.
Why not call and initiate a conversion instead of waiting?
I will at some point, but it's barely worth my time. I only have three small positions to convert:

2 bp on $30K is $6/year (VEMAX>VWO)
4 bp on $5K is $2/year (VFSVX>VSS)
4 bp on $5K is $2/year (VFSVX>VSS)

That's $10/year or $2.50/quarter.

>95% of our Vanguard ex-US Small Cap is already in VSS. I just keep a bit in the mutual fund shares for ease of adding funds.
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by lukestuckenhymer »

drk wrote: Sun Jun 30, 2019 12:49 pm
TropikThunder wrote: Sun Jun 30, 2019 1:48 am If you convert all of your VTSAX into VTI like oldzey just did, can he “automatically invest” next month with less than the $3,000 minimum needed to open a position in VTSAX? If not, I don’t see how he can repeatedly buy back into VTSAX and do serial conversions (at least not in an IRA with a $6,000 yearly limit).
Easy solution: don't convert all holdings in the fund. Leave $3000 or $100 or $1 behind so that automatic investment can continue.

It's an exercise best left to the reader to decide how to do this if they're so inclined. Given that ETFs are involved, some posters will promote FUD, but this doesn't have to be complicated.
An easier solution: Don't convert your Mutual Funds to ETFs and keep a more consolidated and equally tax-efficient portfolio :)
Unless there's a significant cost savings (more than 1 bp) or tax efficiency improvement, Vanguard will never convince me to make this move.
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by drk »

lukestuckenhymer wrote: Mon Jul 01, 2019 1:22 pm An easier solution: Don't convert your Mutual Funds to ETFs and keep a more consolidated and equally tax-efficient portfolio :)
Like I said, FUD:
drk wrote: Sun Jun 30, 2019 12:49 pm Given that ETFs are involved, some posters will promote FUD, but this doesn't have to be complicated.
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by changingtimes »

It appears that my attempt to use the online conversion for VTSAX-VTI in my Roth didn't take, unless they are needing an extra day rather than "after next market close," which would have been last night. (I submitted it on Sunday.)

Anyone else have a report on whether the new online conversion form worked or didn't work for them?
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by Cheez-It Guy »

I never received an invite to convert. I wish they’d add this as standard site functionality rather than requiring some to call to convert.
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by Cheez-It Guy »

Does anyone still see this online conversion option? I had to call Vanguard last week on a separate topic / request. Good call, and after addressing the purpose of my call, we had a brief chat about new and pending features. This particular rep had not even heard about the online conversion option, so I assume it was quite limited in scope. As indicated in my previous post, I was never prompted to convert despite having a brokerage Roth IRA account holding only VTSAX.
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by changingtimes »

My guess is that it was a limited test run, to see how it went.
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by Cheez-It Guy »

changingtimes wrote: Sun Oct 06, 2019 12:57 pm My guess is that it was a limited test run, to see how it went.
Did your attempted conversion ever stick?
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by changingtimes »

Cheez-It Guy wrote: Sun Oct 06, 2019 1:08 pm
changingtimes wrote: Sun Oct 06, 2019 12:57 pm My guess is that it was a limited test run, to see how it went.
Did your attempted conversion ever stick?
Yup, it just took an extra day.
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by Cheez-It Guy »

Thanks for confirming.

I likely wouldn't pull the trigger anyway, except possibly for Tax advantages accounts, until they allow for fractional share purchases and automatic investments. If they want people to move to ETFs for reasons of efficiency, economies of scale, and overall cost reduction, they should be kicking as many of the crutches as possible that keep people from pulling the trigger. Same for mutual fund accounts to brokerage accounts (which I already did switch). Get rid of the obstacles keeping people in place. It's obviously possible if others are already doing it.
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by kevinf »

I was getting sick of the enormous banner on my account overview page advertising the switch. They kept it there for ages and didn't allow you to dismiss it permanently. Extremely annoying as it was positioned above the account balances which forced me to either scroll down or dismiss the banner to get to the information I wanted.
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by Cheez-It Guy »

Does that mean that it's gone now? I had the same thing with banner ads for Personal Advisor Services. I know there are some who feel strongly that financial accounts should not be accessed on mobile devices, but I will at least point out that there are no popups and banner ads within the Vanguard iOS app.
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by stan1 »

Cheez-It Guy wrote: Sun Oct 06, 2019 5:58 pm Does that mean that it's gone now? I had the same thing with banner ads for Personal Advisor Services. I
This week it has been replaced by a large banner for the new active International Core equity fund.
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by Cheez-It Guy »

Hmm. I wonder how they decide who gets what ad? I just generally think the permanent option to convert mutual funds to ETFs online would be helpful.
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by Vanguard Fan 1367 »

arf30 wrote: Wed Jun 26, 2019 5:06 pm
Vulcan wrote: Wed Jun 26, 2019 1:01 pm
arf30 wrote: Wed Jun 26, 2019 12:57 pm Is there an online process to do the conversion now, or did the popup ask you to call customer service?
There's always been an online process for that.
Where's it located on the site? We're talking about fund conversion, not exchange.
I also wonder where this is on the site? Could someone help?

If I have a loss in value in the mutual fund does that loss transfer over to the ETF? And if it doesn't transfer over then am I subject to wash sale rules?

I would like to change my Vanguard S & P 500 Mutual Fund to VOO the equivalent ETF. Right now it shows 20 plus thousand dollar short term loss. Once I get it as an ETF I would like to sell it and buy Vanguard's large Cap Value ETF to take advantage of the loss without having to deal with the vagaries of mutual fund price when you convert to the mutual fund.
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by sycamore »

Vanguard Fan 1367 wrote: Sat Apr 04, 2020 11:03 am
arf30 wrote: Wed Jun 26, 2019 5:06 pm
Vulcan wrote: Wed Jun 26, 2019 1:01 pm
arf30 wrote: Wed Jun 26, 2019 12:57 pm Is there an online process to do the conversion now, or did the popup ask you to call customer service?
There's always been an online process for that.
Where's it located on the site? We're talking about fund conversion, not exchange.
I also wonder where this is on the site? Could someone help?

If I have a loss in value in the mutual fund does that loss transfer over to the ETF? And if it doesn't transfer over then am I subject to wash sale rules?

I would like to change my Vanguard S & P 500 Mutual Fund to VOO the equivalent ETF. Right now it shows 20 plus thousand dollar short term loss. Once I get it as an ETF I would like to sell it and buy Vanguard's large Cap Value ETF to take advantage of the loss without having to deal with the vagaries of mutual fund price when you convert to the mutual fund.
Your basis remains the same when you convert from mutual fund share class to ETF share class.

If I were you I'd just sell the SP 500 mutual fund and the same day place an order to buy the large cap value fund. You'll get the loss and get into the fund you want without the (minor) hassle of converting first and then selling.
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by Vanguard Fan 1367 »

sycamore wrote: Sat Apr 04, 2020 12:07 pm
Vanguard Fan 1367 wrote: Sat Apr 04, 2020 11:03 am
arf30 wrote: Wed Jun 26, 2019 5:06 pm
Vulcan wrote: Wed Jun 26, 2019 1:01 pm
arf30 wrote: Wed Jun 26, 2019 12:57 pm Is there an online process to do the conversion now, or did the popup ask you to call customer service?
There's always been an online process for that.
Where's it located on the site? We're talking about fund conversion, not exchange.
I also wonder where this is on the site? Could someone help?

If I have a loss in value in the mutual fund does that loss transfer over to the ETF? And if it doesn't transfer over then am I subject to wash sale rules?

I would like to change my Vanguard S & P 500 Mutual Fund to VOO the equivalent ETF. Right now it shows 20 plus thousand dollar short term loss. Once I get it as an ETF I would like to sell it and buy Vanguard's large Cap Value ETF to take advantage of the loss without having to deal with the vagaries of mutual fund price when you convert to the mutual fund.
Your basis remains the same when you convert from mutual fund share class to ETF share class.

If I were you I'd just sell the SP 500 mutual fund and the same day place an order to buy the large cap value fund. You'll get the loss and get into the fund you want without the (minor) hassle of converting first and then selling.
Thanks for the advice. Someone has said that if one does this right before closing one can see what the mutual fund is likely to sell for. If we have a day where the stock market is up 5 to 10 percent that would mess up my tax loss harvesting if I put in the order that day.
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FIby45
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by FIby45 »

More options for converting to similiar exposures during TLH.

Eg. VTI to ITOT
arf30
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by arf30 »

Did the link to the online conversion tool ever get posted here? I never got an email or popup. Or have they backed off on online conversions and it has to be done via secure message now?
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by sycamore »

I recently converted a mutual fund to its ETF share class by calling Vanguard. I didn't find a way to do it online. As part of the call, the representative asked if I understood what was to happen with the conversion (which I did, as I'd done it before). My guess is Vanguard doesn't let you do it online because they want to ensure and confirm a person really wants to convert before doing it.
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by abuss368 »

sycamore wrote: Mon Sep 14, 2020 2:03 pm I recently converted a mutual fund to its ETF share class by calling Vanguard. I didn't find a way to do it online. As part of the call, the representative asked if I understood what was to happen with the conversion (which I did, as I'd done it before). My guess is Vanguard doesn't let you do it online because they want to ensure and confirm a person really wants to convert before doing it.
I noticed you can do it online. There is an upgrade option on the one screen.
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by Cheez-It Guy »

abuss368 wrote: Mon Sep 14, 2020 4:44 pm
sycamore wrote: Mon Sep 14, 2020 2:03 pm I recently converted a mutual fund to its ETF share class by calling Vanguard. I didn't find a way to do it online. As part of the call, the representative asked if I understood what was to happen with the conversion (which I did, as I'd done it before). My guess is Vanguard doesn't let you do it online because they want to ensure and confirm a person really wants to convert before doing it.
I noticed you can do it online. There is an upgrade option on the one screen.
Are you referring to conversion of a mutual fund account to a brokerage account, or from mutual fund share class to ETF share class within a new format brokerage account?
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by abuss368 »

Cheez-It Guy wrote: Mon Sep 14, 2020 6:41 pm
abuss368 wrote: Mon Sep 14, 2020 4:44 pm
sycamore wrote: Mon Sep 14, 2020 2:03 pm I recently converted a mutual fund to its ETF share class by calling Vanguard. I didn't find a way to do it online. As part of the call, the representative asked if I understood what was to happen with the conversion (which I did, as I'd done it before). My guess is Vanguard doesn't let you do it online because they want to ensure and confirm a person really wants to convert before doing it.
I noticed you can do it online. There is an upgrade option on the one screen.
Are you referring to conversion of a mutual fund account to a brokerage account, or from mutual fund share class to ETF share class within a new format brokerage account?
Convert account. For ETF conversion I believe one needs to call them directly. They probably tell you it is a one way street and no going back without selling.
John C. Bogle: “Simplicity is the master key to financial success."
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by sycamore »

abuss368 wrote: Mon Sep 14, 2020 7:13 pm
Cheez-It Guy wrote: Mon Sep 14, 2020 6:41 pm
abuss368 wrote: Mon Sep 14, 2020 4:44 pm
sycamore wrote: Mon Sep 14, 2020 2:03 pm I recently converted a mutual fund to its ETF share class by calling Vanguard. I didn't find a way to do it online. As part of the call, the representative asked if I understood what was to happen with the conversion (which I did, as I'd done it before). My guess is Vanguard doesn't let you do it online because they want to ensure and confirm a person really wants to convert before doing it.
I noticed you can do it online. There is an upgrade option on the one screen.
Are you referring to conversion of a mutual fund account to a brokerage account, or from mutual fund share class to ETF share class within a new format brokerage account?
Convert account. For ETF conversion I believe one needs to call them directly. They probably tell you it is a one way street and no going back without selling.
Indeed they do tell you it is a one way conversion from mutual fund share class to ETF share class.
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Re: Vanguard Advertising Mutual Fund to ETF Conversion

Post by TropikThunder »

abuss368 wrote: Mon Sep 14, 2020 7:13 pm
Cheez-It Guy wrote: Mon Sep 14, 2020 6:41 pm
abuss368 wrote: Mon Sep 14, 2020 4:44 pm
sycamore wrote: Mon Sep 14, 2020 2:03 pm I recently converted a mutual fund to its ETF share class by calling Vanguard. I didn't find a way to do it online. As part of the call, the representative asked if I understood what was to happen with the conversion (which I did, as I'd done it before). My guess is Vanguard doesn't let you do it online because they want to ensure and confirm a person really wants to convert before doing it.
I noticed you can do it online. There is an upgrade option on the one screen.
Are you referring to conversion of a mutual fund account to a brokerage account, or from mutual fund share class to ETF share class within a new format brokerage account?
Convert account. For ETF conversion I believe one needs to call them directly. They probably tell you it is a one way street and no going back without selling.
Then why did you say “you can do it online”? Nobody was talking about changing to the brokerage platform.
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