Investor vs Admiral Shares

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WHB3
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Investor vs Admiral Shares

Post by WHB3 » Mon Mar 12, 2018 3:57 pm

Last year I started investing in Total Stock investment shares. Unfortunately I had only 3k to initially invest, but now have over 10k in the account.

Since the funds are basically the same, other than lower expenses in Admiral, are there any major differences? Should I move to Admiral immediately?

Glockenspiel
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Re: Investor vs Admiral Shares

Post by Glockenspiel » Mon Mar 12, 2018 3:59 pm

As far as I know, there are no real differences other than the lower expense ratio. I would move to Admiral as soon as you can.

ThriftyPhD
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Re: Investor vs Admiral Shares

Post by ThriftyPhD » Mon Mar 12, 2018 3:59 pm

https://investornews.vanguard/wondering ... al-shares/
Do it yourself, at your convenience
The fastest, easiest way to convert to Admiral Shares is online. Just follow these steps:

1. Log on to your account.

2. Select the Buy & Sell tab.

3. Click Convert to Admiral Shares and follow the remaining online instructions. (See a sample step-by-step process.)

If you prefer, you can also request conversion by phone or in writing.

alex_686
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Re: Investor vs Admiral Shares

Post by alex_686 » Mon Mar 12, 2018 3:59 pm

WHB3 wrote:
Mon Mar 12, 2018 3:57 pm
Since the funds are basically the same, other than lower expenses in Admiral, are there any major differences? Should I move to Admiral immediately?
They are just different share classes of the same company. Literally the same company, literally the same fund. The only difference is the expense ratio.

sport
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Re: Investor vs Admiral Shares

Post by sport » Mon Mar 12, 2018 4:00 pm

The only difference is the expense ratio. If you are entitled to Admiral shares, there is no benefit to delay, you just pay a little more until you convert.

FootballFan5548
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Re: Investor vs Admiral Shares

Post by FootballFan5548 » Mon Mar 12, 2018 4:05 pm

I just did this last month with Vanguard Total International Fund. I was pleasantly surprised at how easy and quick the change took place.

Good Work!

mega317
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Re: Investor vs Admiral Shares

Post by mega317 » Tue Mar 13, 2018 1:01 am

For at least some of their funds, admiral and investor shares have different prices. That gave me about 8 seconds of hassle in my spreadsheet I use to track basis.

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tennisplyr
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Re: Investor vs Admiral Shares

Post by tennisplyr » Tue Mar 13, 2018 7:22 am

I've found they do it automatically when you reach fund minimum.
Those who move forward with a happy spirit will find that things always work out.

sschoe2
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Re: Investor vs Admiral Shares

Post by sschoe2 » Tue Mar 13, 2018 8:07 am

Is there any reason to buy investor shares when the ETF has the same expense ratio as the Admiral plus no minimum other than the price of a whole share?

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nisiprius
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Re: Investor vs Admiral Shares

Post by nisiprius » Tue Mar 13, 2018 8:15 am

Congratulations on reaching $10,000! If you don't already know, if it's been more than a few days and your account hasn't been converted automatically, you can request it online at Vanguard: Convert to Admiral Shares

There is no difference. Exceptions noted after the chart, below. Admiral shares are just plain better... very slightly better. On an investment of $10,000, you can calculate the difference between VTSMX at 0.15% ER and VTSAX at 0.04%; it's the difference between $15/year and $4/year, or $11/year more. I honestly have never known how to think of it, but the difference is so tiny compared to the day-to-day fluctuations that I find it hard to get excited about it.

You can actually see the difference on a Morningstar chart. Well, actually you can't see it in the chart itself, but in their totals. There isn't any visible gap between the blue VTSMX line and the orange VTSAX line, but over one year $10,000 earned an investor $11,960.10 = $11,948.99 = $11.11 more.

Image
tennisplyr wrote:
Tue Mar 13, 2018 7:22 am
I've found they do it automatically when you reach fund minimum.
They are inconsistent about this, at least they have been in the past. Maybe it's fully automated and rapid now. In the past, they would do it automatically... eventually... but it could take a long time.

One possible issue that actually affected us concerns check writing access to bond funds. For money market funds and most bond funds, you can request a checkbook from Vanguard that lets you write things that look and work exactly like checks (limits on how many you can write per month and amount has to be larger than a certain amount, $250 maybe). You can't do this with a stock fund so it can't matter to you. These checks draw on a specific fund. A checkbook that is issued to work with Investor shares of Total Bond, VBMFX, will not work if the holding is converted to Admiral shares, VBTLX.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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nisiprius
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Re: Investor vs Admiral Shares

Post by nisiprius » Tue Mar 13, 2018 8:18 am

sschoe2 wrote:
Tue Mar 13, 2018 8:07 am
Is there any reason to buy investor shares when the ETF has the same expense ratio as the Admiral plus no minimum other than the price of a whole share?
That's just the usual mutual-fund-versus-ETF debate, and it has the usual answers. Just to take one at random: automatic monthly investment. At least I don't think you can do this with ETFs at Vanguard. Just to take another: being able to place your orders outside of work hours (possible but not advised for ETFs).
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

GLState
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Re: Investor vs Admiral Shares

Post by GLState » Tue Mar 13, 2018 8:43 am

sschoe2 wrote:
Tue Mar 13, 2018 8:07 am
Is there any reason to buy investor shares when the ETF has the same expense ratio as the Admiral plus no minimum other than the price of a whole share?

This morning I could put in an order for $3000 of Vanguard S&P 500 (VFINX). If I bought the EFT (VOO) this morning, with $3000, I could only buy $2827.55 worth of VOO (257.05 x 11). If I wanted to add $100/month to my mutual fund, I can have $100 automatically pulled from my bank account and immediately invested in VFINX... or $50 in VFINX and $50 in another fund. With an ETF, would would have to wait 3 months before accumulating enough to buy 1 share and remember to submit your buy order for that 1 share. I can also reinvest dividends automatically in my mutual funds.

Also, if I want to rebalance between mutual funds, I can move exactly $1000, or $1001.59 to buy the same amount of another fund. IMO, if investing every week, month, or quarter, a mutual fund is a better choice over a ETF.

UpperNwGuy
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Re: Investor vs Admiral Shares

Post by UpperNwGuy » Tue Mar 13, 2018 8:55 am

If you're already at Vanguard, why bother with an ETF when you can have the mutual funds?

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Clever_Username
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Re: Investor vs Admiral Shares

Post by Clever_Username » Tue Mar 13, 2018 10:58 am

nisiprius wrote:
Tue Mar 13, 2018 8:15 am
One possible issue that actually affected us concerns check writing access to bond funds. For money market funds and most bond funds, you can request a checkbook from Vanguard that lets you write things that look and work exactly like checks (limits on how many you can write per month and amount has to be larger than a certain amount, $250 maybe). You can't do this with a stock fund so it can't matter to you. These checks draw on a specific fund. A checkbook that is issued to work with Investor shares of Total Bond, VBMFX, will not work if the holding is converted to Admiral shares, VBTLX.
I feel I knew this, but I keep forgetting it. I have a bond fund in taxable but currently investor-class shares. I may request this checkbook after I get to Admiral shares. In a few years, when I get my next car (I'll need to at some point), I will want the option to pay by check if I don't like the financing, and my previous plan was to sell shares of the bond fund into my checking account and, if I liked the financing, I'd have to wait 90 days to re-purchase anything in that bond fund.

I like the checkbook issue better. And I will wait for Admiral shares because I'm almost certainly going to hit that well before I'm ready for the next car.
"What was true then is true now. Have a plan. Stick to it." -- XXXX, _Layer Cake_

racy
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Re: Investor vs Admiral Shares

Post by racy » Tue Mar 13, 2018 11:20 am

You can check the savings with this calculator: http://buyupside.com/calculators/feesdec07.htm
They add up over a lifetime of investing.

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