VIG Versus VTI

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Topic Author
Almond
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Joined: Wed May 01, 2019 3:11 pm

VIG Versus VTI

Post by Almond » Wed May 08, 2019 11:58 am

I own about 10% of my AA in VIG the rest In managed funds. Looking to streamline and go the boglehead way, so question is there a major difference between VIG and VTI. rather not sell VIG as will have CG. With the remaining AA I could buy more VIG or buy VTI. Thoughts?

Thank you

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vineviz
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Re: VIG Versus VTI

Post by vineviz » Wed May 08, 2019 12:12 pm

Almond wrote:
Wed May 08, 2019 11:58 am
I own about 10% of my AA in VIG the rest In managed funds. Looking to streamline and go the boglehead way, so question is there a major difference between VIG and VTI. rather not sell VIG as will have CG. With the remaining AA I could buy more VIG or buy VTI. Thoughts?
If you wish to avoid paying capital gains on selling the VIG, I'd say it is similar enough to VTI to not worry about the difference.

The average market cap of VIG is ever-so-slightly higher than that of VTI, so adding an extra 5% to whatever small-cap fund you are using to compensate wouldn't be crazy but also wouldn't be strictly necessary..
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

MotoTrojan
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Re: VIG Versus VTI

Post by MotoTrojan » Wed May 08, 2019 12:14 pm

Almond wrote:
Wed May 08, 2019 11:58 am
I own about 10% of my AA in VIG the rest In managed funds. Looking to streamline and go the boglehead way, so question is there a major difference between VIG and VTI. rather not sell VIG as will have CG. With the remaining AA I could buy more VIG or buy VTI. Thoughts?

Thank you
Similar total return, less diversified and less tax-efficient than VTI due to emphasis on dividends. I’d use VTI and especially so in your taxable account. Probably worth leaving the VIG but at a minimum I’d turn off dividend reinvestment and use those to purchase other more efficient funds in future. If market ever dumps enough to sell at a loss I’d tax-loss harvest into something better (perhaps selling VIG and VTI at a loss to buy VOO or VV).

Topic Author
Almond
Posts: 35
Joined: Wed May 01, 2019 3:11 pm

Re: VIG Versus VTI

Post by Almond » Wed May 08, 2019 1:31 pm

Thank you both for your answers. very helpful. Curious why is VOO or VV more tax efficient than VTI?

WhiteMaxima
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Re: VIG Versus VTI

Post by WhiteMaxima » Wed May 08, 2019 1:37 pm

I like VIG a lot, esp in Roth. If a company never pays dividend to its shareholders, I won't want to own it. Of course, for tax reason, Warren Buffet's company never pays dividend. It's always reminds me a grey area when a company arrangement with IRS for tax purpose.

MotoTrojan
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Re: VIG Versus VTI

Post by MotoTrojan » Wed May 08, 2019 1:59 pm

Almond wrote:
Wed May 08, 2019 1:31 pm
Thank you both for your answers. very helpful. Curious why is VOO or VV more tax efficient than VTI?
Wasn't saying they were, simply saying if you buy VTI now and then both VIG and VTI go down, you could tax-loss harvest into VOO or VV. If VIG goes down before you buy more VTI, you could just TLH into VTI, etc...

VOO=VV=VTI in my view for tax-efficiency and returns even. I believe VV is marginally more tax-efficient as it is 100% qualified dividends but that is just a recollection and VTI is essentially the same.

wilfi
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Re: VIG Versus VTI

Post by wilfi » Sun May 12, 2019 4:43 pm

All roads lead to VTI - even for taxable personal investments..
5 year growth of VTI: 51.8%
5 year growth of VIG: 47.32
Most importantly - Dividend yield is almost the same for both VTI and VIG - VTI is much better diversified. Hence VTI would be a better choice.

Since this is all about dividends, we should consider VYM
5 year growth of VYM: 34.50%
Considering a 1.7% additional dividend yield per year, the portfolio would have grown to 43% in 5 years vs 51.8 ( based on past performance, which does not guarantee the future performance)
Factoring in the expense ration : VYM: 0.06, VIG: 0:08 and VTI : 0.03, VTI always comes up as a better choice in all scenarios...
I am actually trying hard to find an ETF better than VTI - All my money, personal investment + 401k which is close to 1.5M are all in VTI, based on my research.

drk
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Location: Seattle

Re: VIG Versus VTI

Post by drk » Sun May 12, 2019 7:52 pm

Almond wrote:
Wed May 08, 2019 1:31 pm
Thank you both for your answers. very helpful. Curious why is VOO or VV more tax efficient than VTI?
They have a higher Qualified Dividend Income ratio.

Topic Author
Almond
Posts: 35
Joined: Wed May 01, 2019 3:11 pm

Re: VIG Versus VTI

Post by Almond » Wed May 15, 2019 10:54 am

drk wrote:
Sun May 12, 2019 7:52 pm
Almond wrote:
Wed May 08, 2019 1:31 pm
Thank you both for your answers. very helpful. Curious why is VOO or VV more tax efficient than VTI?
They have a higher Qualified Dividend Income ratio.
Aah TY

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