Reasons to own Vanguard ETFs over Admiral shares?

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Bulgogi Head
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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by Bulgogi Head » Wed Jan 09, 2019 11:43 am

People in this thread state that you can TLH with ETFs immediately. I’m curious how you do this? Do you have two different browser windows open with the sell order in one and the buy order in the other, and then hit submit at the same time? If it’s actually submitting the sell order, then afterward doing a buy order, it’s not quite instant right? The price could change in the minute or so between the two orders?

livesoft
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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by livesoft » Wed Jan 09, 2019 1:05 pm

Bulgogi Head wrote:
Wed Jan 09, 2019 11:43 am
People in this thread state that you can TLH with ETFs immediately. I’m curious how you do this? Do you have two different browser windows open with the sell order in one and the buy order in the other, and then hit submit at the same time? If it’s actually submitting the sell order, then afterward doing a buy order, it’s not quite instant right? The price could change in the minute or so between the two orders?
Here is an example:
viewtopic.php?p=1488409#p1488409

Sure, prices could change in a minute, so if you are concerned about that, why not click faster? Or watch for 5 minutes and see how quickly prices are changing and then decide what to do.

I guess the fear of regret might be so strong in some people that they would be diagnosed with some kind of anxiety disorder. In that case, I don't know what to say.
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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by jeffyscott » Wed Jan 09, 2019 3:24 pm

shawn_lad wrote:
Mon Jan 07, 2019 12:20 pm
Vanguard Admiral shares Mutual Fund pros:
- cost less to buy: no bid / ask spread
- less "care" needed to guess what limit order to place, etc.
- no premium/discount to NAV to worry about (when needing to sell, persistent discount may prevent sale at "fair" price for a while)
To me these are the key reasons that I don't want to bother with ETFs. Even if none of these potential issues amount to much, it's easier to just to never have to even think about them. In addition, I know I would be constantly thinking should I buy/sell now or 30 seconds from now, thinking about one day vs. another is enough already.

Vanguard means never having to buy ETFs, since there is little to no extra tax or other advantages to their ETFs...well, other than those 1% gains you'd supposedly get by buying at 10 AM instead of 4 PM :wink: .

In tax deferred and for bond ETFs, your pros and cons would not be limited to Vanguard. Schwab has the same ER on their index funds and ETFs and Fidelity has at least one bond index fund with 0 ER.
Time is your friend; impulse is your enemy. - John C. Bogle

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shawn_lad
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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by shawn_lad » Thu Jan 10, 2019 10:32 am

robertmcd wrote:
Tue Jan 08, 2019 12:13 pm
It's because I don't want to hold non-vanguard mutual funds in taxable due to capital gains. And since the mutual fund is priced at the end of the day, I cannot sell it and immediately buy the replacement ETF with my credits like I can with ETF to ETF.
If using Vanguard pairs, can't you do a swap at the end of the day in taxable account? I've never done it in taxable - is "exchange" concept not present in VBS which would swap at the end of the day without any wait or fees?

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shawn_lad
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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by shawn_lad » Thu Jan 10, 2019 10:34 am

Earl Lemongrab wrote:
Wed Jan 09, 2019 11:41 am
Yes, but that restricts you to only Vanguard funds, giving you fewer available swap pairs.
Don't you need just 1 pairing for each fund of interest?

So if someone wants to do just a 3-fund portfolio, they just need a 1 Vanguard alternative for each of those?

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Earl Lemongrab
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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by Earl Lemongrab » Thu Jan 10, 2019 11:46 am

shawn_lad wrote:
Thu Jan 10, 2019 10:34 am
Earl Lemongrab wrote:
Wed Jan 09, 2019 11:41 am
Yes, but that restricts you to only Vanguard funds, giving you fewer available swap pairs.
Don't you need just 1 pairing for each fund of interest?
Not if it's like December, when people want to do multiple TLH rounds without wash sales.

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shawn_lad
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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by shawn_lad » Thu Jan 10, 2019 3:11 pm

Earl Lemongrab wrote:
Thu Jan 10, 2019 11:46 am
Not if it's like December, when people want to do multiple TLH rounds without wash sales.
I see. In that case (i.e. when we want to TLH twice within a month), would the following still accomplish the same thing
(1) convert Admiral shares to ETF (not sure how long this takes)
(2) do ETF-to-ETF TLH
(3) later on, if you like, sell ETF around 4pm and buy Admiral shares of original fund

?

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Earl Lemongrab
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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by Earl Lemongrab » Thu Jan 10, 2019 3:24 pm

shawn_lad wrote:
Thu Jan 10, 2019 3:11 pm
Earl Lemongrab wrote:
Thu Jan 10, 2019 11:46 am
Not if it's like December, when people want to do multiple TLH rounds without wash sales.
I see. In that case (i.e. when we want to TLH twice within a month), would the following still accomplish the same thing
(1) convert Admiral shares to ETF (not sure how long this takes)
(2) do ETF-to-ETF TLH
(3) later on, if you like, sell ETF around 4pm and buy Admiral shares of original fund
There is a very high likelihood that various share classes of Vanguard funds are substantially identical. It would be clearer if you put some tickers on those transactions, but in general I think you'd have wash sales.

If you're saying something like:

1. VTSAX convert to VTI.
2. Sell VTI (could have just sold VTSAX). Harvest tax loss.
3. Buy replacement, let's say ITOT. The new fund goes down a few days later.
4. Sell ITOT. Harvest tax loss.
5. Buy VTSAX (probably a wash with the sale in 2).

Not to mention that you're using ETFs.

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jhfenton
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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by jhfenton » Thu Jan 10, 2019 3:26 pm

shawn_lad wrote:
Thu Jan 10, 2019 3:11 pm
(1) convert Admiral shares to ETF (not sure how long this takes)
Price-wise it happens at that evening's closing NAV for both the Admiral Shares and ETF. The ETF doesn't appear in your account though until the second business day. So if you call on Monday to request the conversion, the ETF would be ready to sell on Wednesday morning.

stocknoob4111
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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by stocknoob4111 » Thu Jan 10, 2019 3:41 pm

my primary reason to prefer MF over ETFs.. you can't auto invest on a schedule to an ETF and you can't buy fractional shares. As for the intra day timing benefit, well isn't thr philosophy here not to engage in timing anyway? :)

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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by jsmoove123 » Thu Jan 10, 2019 4:04 pm

Vulcan wrote:
Mon Jan 07, 2019 6:46 pm
shawn_lad wrote:
Mon Jan 07, 2019 6:11 pm
Horton wrote:
Mon Jan 07, 2019 6:06 pm
If you want to hold the Vanguard Total World Stock Index, it would be ideal to do it via the ETF because the expense ratio (0.10%) is lower than the mutual fund (0.19%).
That's a good observation. That's because VT does not have corresponding MF with Admiral shares (only with Investor shares).
This will change in about two weeks.
Source?

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jhfenton
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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by jhfenton » Thu Jan 10, 2019 4:15 pm

jsmoove123 wrote:
Thu Jan 10, 2019 4:04 pm
Vulcan wrote:
Mon Jan 07, 2019 6:46 pm
shawn_lad wrote:
Mon Jan 07, 2019 6:11 pm
Horton wrote:
Mon Jan 07, 2019 6:06 pm
If you want to hold the Vanguard Total World Stock Index, it would be ideal to do it via the ETF because the expense ratio (0.10%) is lower than the mutual fund (0.19%).
That's a good observation. That's because VT does not have corresponding MF with Admiral shares (only with Investor shares).
This will change in about two weeks.
Source?
Per the SEC filing, Total World and All-World ex-US Small Cap are getting Admiral Shares:

https://www.sec.gov/Archives/edgar/data ... merged.htm

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travelogue
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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by travelogue » Thu Jan 10, 2019 4:32 pm

  • Minimum investment amounts for mutual funds. If you want three funds, you might need $9,000 to start.
  • Ease and price of accumulation at a brokerage other than Vanguard.
And, that’s about all I can think of. Vanguard’s ETF share classes makes taxable investing in their mutual funds a lot more attractive than competitors’ funds.

I’m currently using Schwab ETFs at Schwab (rather than Vanguard funds at Vanguard) because I can buy a wider array of asset classes with a smaller amount of funds to get started. Also, Nifty that Vanguard has zero commission trades for a slew of ETFs on their brokerage platform now, but I find the Schwab platform slightly easier to use and I have a checking account there as well.

That said, I do sometimes miss the ease of automated investing of any dollar amount that mutual funds allow for. No odd cash less than an ETF share lying in the sweep. No odd fractional shares if you reinvest dividends.

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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by jeffyscott » Thu Jan 10, 2019 5:27 pm

travelogue wrote:
Thu Jan 10, 2019 4:32 pm
I’m currently using Schwab ETFs at Schwab (rather than Vanguard funds at Vanguard) because I can buy a wider array of asset classes with a smaller amount of funds to get started.
Schwab has no minimum on their mutual funds. So unless buying things that they do not offer as a mutual fund or it is a taxable account, you can have just as wide an array using mutual funds at Schwab.
Time is your friend; impulse is your enemy. - John C. Bogle

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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by WhiteMaxima » Thu Jan 10, 2019 5:33 pm

You can short ETF but not mutual fund.

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travelogue
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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by travelogue » Thu Jan 10, 2019 5:58 pm

jeffyscott wrote:
Thu Jan 10, 2019 5:27 pm
travelogue wrote:
Thu Jan 10, 2019 4:32 pm
I’m currently using Schwab ETFs at Schwab (rather than Vanguard funds at Vanguard) because I can buy a wider array of asset classes with a smaller amount of funds to get started.
Schwab has no minimum on their mutual funds. So unless buying things that they do not offer as a mutual fund or it is a taxable account, you can have just as wide an array using mutual funds at Schwab.
Yep. This is a taxable account.

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shawn_lad
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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by shawn_lad » Thu Jan 10, 2019 11:04 pm

Earl Lemongrab wrote:
Thu Jan 10, 2019 3:24 pm
shawn_lad wrote:
Thu Jan 10, 2019 3:11 pm
I see. In that case (i.e. when we want to TLH twice within a month), would the following still accomplish the same thing
(1) convert Admiral shares to ETF (not sure how long this takes)
(2) do ETF-to-ETF TLH
(3) later on, if you like, sell ETF around 4pm and buy Admiral shares of original fund
There is a very high likelihood that various share classes of Vanguard funds are substantially identical. It would be clearer if you put some tickers on those transactions, but in general I think you'd have wash sales.

If you're saying something like:

1. VTSAX convert to VTI.
2. Sell VTI (could have just sold VTSAX). Harvest tax loss.
3. Buy replacement, let's say ITOT. The new fund goes down a few days later.
4. Sell ITOT. Harvest tax loss.
5. Buy VTSAX (probably a wash with the sale in 2).

Not to mention that you're using ETFs.
No, what I am saying is this:

1. For 1st TLH use Vanguard funds only. E.g. exchange VTSAX to 80% VFIAX/20% VEXAX.
2. If need to do yet another conversion within a month (very rare), then convert above 2 funds to respective ETFs first
3. Sell all them and buy ITOT within a minute. Note: I could not first sell the MFs as you suggest in your parenthetical remark in 2. because I could not buy ITOT right away then, but would have to wait til next morning.
4. If you need 3rd, 4th, etc TLH, do what you would have done with ETFs anyway.
5. AFTER 30 days passes after original transaction, replace ETF(s) back to VTSAX - thus, no wash sale.

Note that steps 2-4 are not going to be needed in 95% of cases, if ever. So ETFs are only used in the rare case of wanting more than 1 TLS within a month.

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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by shawn_lad » Wed Jan 23, 2019 9:52 pm

I wonder if I found an example of where ETF costs less than Admiral shares: I am looking at VTEB vs corresponding VTEAX (Vanguard Tax-Exempt Bond ETF vs Vanguard Tax-Exempt Bond Index Fund Admiral Shares).

VTEAX lists 0.25% purchase fee while ETF does not mention it!

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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by jeffyscott » Wed Jan 23, 2019 10:01 pm

There are a few other admiral index funds with purchase and/or redemption fees: Two corporate bond index funds, EM gov't bond index, Global ex-US Real Estate, International Dividend Appreciation, and International High Dividend Yield.
Time is your friend; impulse is your enemy. - John C. Bogle

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shawn_lad
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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by shawn_lad » Thu Jan 24, 2019 10:12 am

shawn_lad wrote:
Wed Jan 23, 2019 9:52 pm
I wonder if I found an example of where ETF costs less than Admiral shares: I am looking at VTEB vs corresponding VTEAX (Vanguard Tax-Exempt Bond ETF vs Vanguard Tax-Exempt Bond Index Fund Admiral Shares).

VTEAX lists 0.25% purchase fee while ETF does not mention it!
jeffyscott wrote:
Wed Jan 23, 2019 10:01 pm
There are a few other admiral index funds with purchase and/or redemption fees: Two corporate bond index funds, EM gov't bond index, Global ex-US Real Estate, International Dividend Appreciation, and International High Dividend Yield.
Just confirmed this with Vanguard CSR. Indeed, there are a few funds like one(s) above have additional fee for purchase while corresponding ETF does not!

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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by jeffyscott » Thu Jan 24, 2019 10:47 am

shawn_lad wrote:
Thu Jan 24, 2019 10:12 am
Just confirmed this with Vanguard CSR. Indeed, there are a few funds like one(s) above have additional fee for purchase while corresponding ETF does not!
Those fees are noted in the list of funds here:
https://investor.vanguard.com/mutual-fu ... enses-fees
Time is your friend; impulse is your enemy. - John C. Bogle

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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by Scooter57 » Thu Jan 24, 2019 6:08 pm

When the market gets crazy, ETF prices can diverge significantly from the actual NAV of the mutual fund. When I was watching a few ETFs I saw this happen more than once. With the fund, the price you get is the price of the underlying securities at the close.

With ETFs you can also be tempted to set price targets at which you will sell or buy that get hit during one of those days when prices fluctuate madly. With a clunky old mutual fund you are forced to act with more deliberation and not be tempted into trading.

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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by DB2 » Thu Jan 24, 2019 8:03 pm

Question: if you sell off a mutual fund during trading hours, is the price based on yesterday or do you have to wait until end of day? I know when purchasing it's end of day you get the pricing.

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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by Pigeye Brewster » Thu Jan 24, 2019 9:38 pm

DB2 wrote:
Thu Jan 24, 2019 8:03 pm
Question: if you sell off a mutual fund during trading hours, is the price based on yesterday or do you have to wait until end of day? I know when purchasing it's end of day you get the pricing.
End of day.

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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by DB2 » Thu Jan 24, 2019 10:41 pm

The reason I ask is, the only advantage I think of with an ETF is if one needs to sell ASAP because of some major, disastrous event (major attack, nuclear event, etc.) where the market is dropping like mad. They could potentially get out earlier in the day with much less loss than waiting until end of day with a mutual fund. I know this is a very unlikely event but just sayin'. Otherwise, it doesn't seem to me it matters too much which one someone gets...with Vanguard anyway.

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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by Pigeye Brewster » Fri Jan 25, 2019 9:21 am

DB2 wrote:
Thu Jan 24, 2019 10:41 pm
The reason I ask is, the only advantage I think of with an ETF is if one needs to sell ASAP because of some major, disastrous event (major attack, nuclear event, etc.) where the market is dropping like mad. They could potentially get out earlier in the day with much less loss than waiting until end of day with a mutual fund. I know this is a very unlikely event but just sayin'. Otherwise, it doesn't seem to me it matters too much which one someone gets...with Vanguard anyway.
Individual circumstances or preferences may cause some to prefer one or the other. But for many, if not most, investors, it really shouldn't matter too much when using Vanguard funds.

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shawn_lad
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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by shawn_lad » Fri Jan 25, 2019 10:48 am

jeffyscott wrote:
Thu Jan 24, 2019 10:47 am
Those fees are noted in the list of funds here:
https://investor.vanguard.com/mutual-fu ... enses-fees
Thank you for the link!

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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by nmclean » Fri Jan 25, 2019 12:31 pm

FOGU wrote:
Mon Jan 07, 2019 5:36 pm
OK, but on any given day couldn't the ETF investor just as easily have $99,000 by the closing bell?
livesoft wrote:
Mon Jan 07, 2019 5:50 pm
No, because the market trend is up. This is the same argument to lump-sum as soon as you have the money and not to DCA. That 6 hour difference could make a huge difference.
The long-term trend is up, but as you shorten the term, the odds of up/down move closer to 50/50. On any given day it's about 53/47, so FOGU is mostly correct. But the slight advantage means you should still benefit on average, I would think.

Using the open and close values on yahoo finance, I found the average difference in both 2016 and 2017 was +0.03%. In 2018 it was -0.06%. That should give some idea of the effect of buying at the beginning of each day versus the end. It seems to me the effect would be extremely small overall.

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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by shawn_lad » Fri Jan 25, 2019 1:21 pm

nmclean wrote:
Fri Jan 25, 2019 12:31 pm
FOGU wrote:
Mon Jan 07, 2019 5:36 pm
OK, but on any given day couldn't the ETF investor just as easily have $99,000 by the closing bell?
livesoft wrote:
Mon Jan 07, 2019 5:50 pm
No, because the market trend is up. This is the same argument to lump-sum as soon as you have the money and not to DCA. That 6 hour difference could make a huge difference.
The long-term trend is up, but as you shorten the term, the odds of up/down move closer to 50/50. On any given day it's about 53/47, so FOGU is mostly correct. But the slight advantage means you should still benefit on average, I would think.

Using the open and close values on yahoo finance, I found the average difference in both 2016 and 2017 was +0.03%. In 2018 it was -0.06%. That should give some idea of the effect of buying at the beginning of each day versus the end. It seems to me the effect would be extremely small overall.
While using open/close prices could be produce real results, I don't think overall statement of 53/47 is necessarily right since it does not account for changes in the prices between the market sessions. Also, it's very hard / impossible to buy ETFs at open or close prices.

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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by livesoft » Fri Jan 25, 2019 1:31 pm

^It is trivial to buy ETFs at the open price.
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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by wolf359 » Fri Jan 25, 2019 1:41 pm

Bulgogi Head wrote:
Wed Jan 09, 2019 11:43 am
People in this thread state that you can TLH with ETFs immediately. I’m curious how you do this? Do you have two different browser windows open with the sell order in one and the buy order in the other, and then hit submit at the same time? If it’s actually submitting the sell order, then afterward doing a buy order, it’s not quite instant right? The price could change in the minute or so between the two orders?
In mid-December, I was tax loss harvesting small cap growth Admiral shares. The market had been down most of the day, and by 3:00 pm was still down near its low. I needed to complete the transaction, since I wasn't going to be around at market close. Therefore, I pulled the trigger on the transaction, selling all my shares which had a loss, and transferring them to another fund.

In the hour between my transaction and the market close, there was a miraculous rally, and Vanguard Small Cap Growth made up lost ground and ended up positive for the day. Half my "loss" was wiped out.

Had I had ETFs, the transaction would have taken place immediately, and my tax loss harvest would have been as expected.

That's what they're talking about.

However, I still prefer Admiral shares to ETFs. This type of situation also goes the other way.

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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by nmclean » Fri Jan 25, 2019 3:36 pm

shawn_lad wrote:
Fri Jan 25, 2019 1:21 pm
nmclean wrote:
Fri Jan 25, 2019 12:31 pm
FOGU wrote:
Mon Jan 07, 2019 5:36 pm
OK, but on any given day couldn't the ETF investor just as easily have $99,000 by the closing bell?
livesoft wrote:
Mon Jan 07, 2019 5:50 pm
No, because the market trend is up. This is the same argument to lump-sum as soon as you have the money and not to DCA. That 6 hour difference could make a huge difference.
The long-term trend is up, but as you shorten the term, the odds of up/down move closer to 50/50. On any given day it's about 53/47, so FOGU is mostly correct. But the slight advantage means you should still benefit on average, I would think.

Using the open and close values on yahoo finance, I found the average difference in both 2016 and 2017 was +0.03%. In 2018 it was -0.06%. That should give some idea of the effect of buying at the beginning of each day versus the end. It seems to me the effect would be extremely small overall.
While using open/close prices could be produce real results, I don't think overall statement of 53/47 is necessarily right since it does not account for changes in the prices between the market sessions. Also, it's very hard / impossible to buy ETFs at open or close prices.
The results purposely don't include that. Essentially question I'm addressing is the difference between buying at open or closing prices. In both cases, you are equally affected by the price changes in between sessions, so it doesn't factor in.

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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by shawn_lad » Fri Jan 25, 2019 5:05 pm

nmclean wrote:
Fri Jan 25, 2019 3:36 pm
The results purposely don't include that. Essentially question I'm addressing is the difference between buying at open or closing prices. In both cases, you are equally affected by the price changes in between sessions, so it doesn't factor in.
So your 53/47 figure comes from close-to-open price comparison? Over a couple years?

Would be interesting to know over say ~50 years...

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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by Mike14 » Fri Jan 25, 2019 5:19 pm

robertmcd wrote:
Mon Jan 07, 2019 12:33 pm
Easier tax loss harvesting from ETF to ETF

VTI-ITOT-SPTM-SCHB

VXUS-IXUS
Svensk Anga wrote:
Mon Jan 07, 2019 1:26 pm
easier tax-gain harvesting, i.e.

VXUS -> VXUS

with no change in allocation and nil time out of the market.
car733 wrote:
Mon Jan 07, 2019 2:15 pm
This. I would add SCHF to VXUS-IXUS tax loss harvesting group.

How do you exchange ETF's without being out of the market (even for a few minutes)?

Don't you have to put in a sale order, wait for it to execute, then make a buy order and wait for it to execute?
Or is it possible to do the exchange like it works for mutual funds where the sale and buy happens at the same time? I'm assuming one would have to use market orders for that?

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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by robertmcd » Fri Jan 25, 2019 5:43 pm

Yes you will be out of the market temporarily in that sense.

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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by Mike14 » Fri Jan 25, 2019 5:52 pm

robertmcd wrote:
Fri Jan 25, 2019 5:43 pm
Yes you will be out of the market temporarily in that sense.
If, statistically speaking, the market goes up most of the time, then exchanging ETF's for TLH appears to be a negative compared to mutual funds. Because on average ETF's will have increased in price by the time one buys them back.

Not trying to mock ETF's, I wish there was a solution for this since exchanging ETF's sounds messy.

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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by TropikThunder » Fri Jan 25, 2019 7:32 pm

shawn_lad wrote:
Thu Jan 24, 2019 10:12 am
shawn_lad wrote:
Wed Jan 23, 2019 9:52 pm
I wonder if I found an example of where ETF costs less than Admiral shares: I am looking at VTEB vs corresponding VTEAX (Vanguard Tax-Exempt Bond ETF vs Vanguard Tax-Exempt Bond Index Fund Admiral Shares).

VTEAX lists 0.25% purchase fee while ETF does not mention it!
jeffyscott wrote:
Wed Jan 23, 2019 10:01 pm
There are a few other admiral index funds with purchase and/or redemption fees: Two corporate bond index funds, EM gov't bond index, Global ex-US Real Estate, International Dividend Appreciation, and International High Dividend Yield.
Just confirmed this with Vanguard CSR. Indeed, there are a few funds like one(s) above have additional fee for purchase while corresponding ETF does not!
You buy mutual fund shares (i.e., VTEAX) from the fund company (i.e., Vanguard) while you buy ETF's (i.e., VTEB) from other investors, not from the fund company. Vanguard doesn't have to do anything when you buy an ETF.

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Earl Lemongrab
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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by Earl Lemongrab » Fri Jan 25, 2019 8:01 pm

Mike14 wrote:
Fri Jan 25, 2019 5:19 pm
Don't you have to put in a sale order, wait for it to execute, then make a buy order and wait for it to execute?
Or is it possible to do the exchange like it works for mutual funds where the sale and buy happens at the same time? I'm assuming one would have to use market orders for that?
Depends on the value of the exchange, and the resources you have. If you want to purchase the replacement first, then transfer in that much cash and buy, then sell the existing shares. After settlement, move the cash back out. I wouldn't personally bother with such a thing.

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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by Pigeye Brewster » Fri Jan 25, 2019 11:37 pm

Earl Lemongrab wrote:
Fri Jan 25, 2019 8:01 pm
Mike14 wrote:
Fri Jan 25, 2019 5:19 pm
Don't you have to put in a sale order, wait for it to execute, then make a buy order and wait for it to execute?
Or is it possible to do the exchange like it works for mutual funds where the sale and buy happens at the same time? I'm assuming one would have to use market orders for that?
Depends on the value of the exchange, and the resources you have. If you want to purchase the replacement first, then transfer in that much cash and buy, then sell the existing shares. After settlement, move the cash back out. I wouldn't personally bother with such a thing.
“Don’t make the process harder than it is.”
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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by AlphaLess » Sat Jan 26, 2019 12:02 am

02nz wrote:
Mon Jan 07, 2019 1:48 pm
Portability. I left Vanguard after they made a series of errors on my account. It was easier to move the shares out as ETFs so I converted. Some brokerages will let you hold Admiral shares but not buy them. Even where it's possible to buy Admiral shares, there's usually a fee. ETFs can be bought everywhere and often for no fee.
What errors did they make?
"You can get more with a kind word and a gun than with just a kind word." George Washington

02nz
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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by 02nz » Sat Jan 26, 2019 12:09 am

AlphaLess wrote:
Sat Jan 26, 2019 12:02 am
02nz wrote:
Mon Jan 07, 2019 1:48 pm
Portability. I left Vanguard after they made a series of errors on my account. It was easier to move the shares out as ETFs so I converted. Some brokerages will let you hold Admiral shares but not buy them. Even where it's possible to buy Admiral shares, there's usually a fee. ETFs can be bought everywhere and often for no fee.
What errors did they make?
viewtopic.php?t=261539

sf_tech_saver
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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by sf_tech_saver » Sat Jan 26, 2019 12:37 am

I started investing heavily in VTI in October. In a highly volatile trading day I would not want the mutual fund version. I prefer having the ability to set a relatively low/stretch limit price during a volatile day, and worst case if its not met I can always buy at the close (same price the mutual funds gets).

I had some investing to do the day Apple missed their earnings and felt it was the perfect day to fish in the volatility for a VTI discount. The limit order triggered just above 124, while the market recovered later in the day. Your results will vary--and generally I'd prefer a less volatile market since everything I buy will be held for 30 years anyways--but its not that fun to wait 10 hours to see what price you ultimately get on a -/+3% volatility day!

Its also nice to be able to see price updates anytime I want vs. waiting for 6pm EST for Vanguard funds to update.

What's more 'speculative': assuming the 4pm price is fine, or having the option to set a limit order at 1-3% under the opening price on a volatile day and see if it hits before 4pm. That limit style order wouldn't have worked out well during the 87 crash.....but I prefer the immediacy and control.
VTI is a modern marvel

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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by nmclean » Tue Jan 29, 2019 8:55 am

shawn_lad wrote:
Fri Jan 25, 2019 5:05 pm
nmclean wrote:
Fri Jan 25, 2019 3:36 pm
The results purposely don't include that. Essentially question I'm addressing is the difference between buying at open or closing prices. In both cases, you are equally affected by the price changes in between sessions, so it doesn't factor in.
So your 53/47 figure comes from close-to-open price comparison? Over a couple years?

Would be interesting to know over say ~50 years...
The 53/47 came from quickly googled research that covered longer periods, e.g. https://www.crestmontresearch.com/docs/Stock-Yo-Yo.pdf

For the few years I tested, I was only comparing open to close prices because that would be the difference between ETFs and mutual funds, assuming a supposed "best case" of buying ETFs at the opening price, according to livesoft's argument:
Suppose an investor placed an order this morning at 10 am for $100,000 worth of VTSAX, then at the end of today, they will have $100,000 worth of VTSAX. But suppose the investor placed an order this morning at 10 am for $100,000 worth of VTI, then at the end of today, they will probably have at least $101,000 worth of VTI.
But when you look at the actual effect of this from 2016 to 2018, it seems like it would have been close to zero or possibly even negative, even though the market went up over that time. When you pointed out that doesn't include the changes between sessions, you were actually pointing out the flaw in livesoft's assumptions and agreeing with me. If the upward trend is thanks to price changes between sessions, then buying VTI in the mornings won't necessarily benefit you as often as you think.

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shawn_lad
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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by shawn_lad » Wed Jan 30, 2019 11:56 am

nmclean wrote:
Tue Jan 29, 2019 8:55 am
shawn_lad wrote:
Fri Jan 25, 2019 5:05 pm
nmclean wrote:
Fri Jan 25, 2019 3:36 pm
The results purposely don't include that. Essentially question I'm addressing is the difference between buying at open or closing prices. In both cases, you are equally affected by the price changes in between sessions, so it doesn't factor in.
So your 53/47 figure comes from close-to-open price comparison? Over a couple years?

Would be interesting to know over say ~50 years...
The 53/47 came from quickly googled research that covered longer periods, e.g. https://www.crestmontresearch.com/docs/Stock-Yo-Yo.pdf

For the few years I tested, I was only comparing open to close prices because that would be the difference between ETFs and mutual funds, assuming a supposed "best case" of buying ETFs at the opening price, according to livesoft's argument:
Suppose an investor placed an order this morning at 10 am for $100,000 worth of VTSAX, then at the end of today, they will have $100,000 worth of VTSAX. But suppose the investor placed an order this morning at 10 am for $100,000 worth of VTI, then at the end of today, they will probably have at least $101,000 worth of VTI.
But when you look at the actual effect of this from 2016 to 2018, it seems like it would have been close to zero or possibly even negative, even though the market went up over that time. When you pointed out that doesn't include the changes between sessions, you were actually pointing out the flaw in livesoft's assumptions and agreeing with me. If the upward trend is thanks to price changes between sessions, then buying VTI in the mornings won't necessarily benefit you as often as you think.
Yeah, that link you provided does not tell me what they mean by "up" or "down" days, so I don't know if they meant close-to-close or open-to-close price moves only. I was just curious on a long-time basis, what's open-to-close price moves vs overall market moves.

nmclean
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Re: Reasons to own Vanguard ETFs over Admiral shares?

Post by nmclean » Mon Feb 04, 2019 10:45 am

shawn_lad wrote:
Wed Jan 30, 2019 11:56 am
nmclean wrote:
Tue Jan 29, 2019 8:55 am
shawn_lad wrote:
Fri Jan 25, 2019 5:05 pm
nmclean wrote:
Fri Jan 25, 2019 3:36 pm
The results purposely don't include that. Essentially question I'm addressing is the difference between buying at open or closing prices. In both cases, you are equally affected by the price changes in between sessions, so it doesn't factor in.
So your 53/47 figure comes from close-to-open price comparison? Over a couple years?

Would be interesting to know over say ~50 years...
The 53/47 came from quickly googled research that covered longer periods, e.g. https://www.crestmontresearch.com/docs/Stock-Yo-Yo.pdf

For the few years I tested, I was only comparing open to close prices because that would be the difference between ETFs and mutual funds, assuming a supposed "best case" of buying ETFs at the opening price, according to livesoft's argument:
Suppose an investor placed an order this morning at 10 am for $100,000 worth of VTSAX, then at the end of today, they will have $100,000 worth of VTSAX. But suppose the investor placed an order this morning at 10 am for $100,000 worth of VTI, then at the end of today, they will probably have at least $101,000 worth of VTI.
But when you look at the actual effect of this from 2016 to 2018, it seems like it would have been close to zero or possibly even negative, even though the market went up over that time. When you pointed out that doesn't include the changes between sessions, you were actually pointing out the flaw in livesoft's assumptions and agreeing with me. If the upward trend is thanks to price changes between sessions, then buying VTI in the mornings won't necessarily benefit you as often as you think.
Yeah, that link you provided does not tell me what they mean by "up" or "down" days, so I don't know if they meant close-to-close or open-to-close price moves only. I was just curious on a long-time basis, what's open-to-close price moves vs overall market moves.
Okay, I found this: https://einvestingforbeginners.com/stoc ... ercentage/

They used the same data source as me (yahoo finance) but covered 20 years using the changes from previous day close to current close, and again it's 53/47.

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