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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jeffyscott
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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.
press on, regardless - 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? :)

jsmoove123
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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

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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jeffyscott
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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.
press on, regardless - John C. Bogle

WhiteMaxima
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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.

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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