Performance of VTI < VTSAX?

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jco
Posts: 45
Joined: Sat Jan 25, 2020 8:53 am

Performance of VTI < VTSAX?

Post by jco » Fri Feb 14, 2020 7:43 am

The latest semiannual report (June 30, 2019) of the Vanguard Total Stock Market Index (https://personal.vanguard.com/funds/rep ... 2210156223) compares the beginning and ending balances of $1,000 for various classes of the fund:

Code: Select all

Total Stock Market
Based on Actual Fund Return
			Beginning 	Ending		Expenses 	Annualized ER
			Account Value	Account Value	Paid During
			12-31-2018	06-30-2019	Period
Investor Shares 	$1,000.00	$1,186.21 	$0.76		0.128%
ETF Shares 		$1,000.00	$1,186.99 	$0.16		0.027%
Admiral™ Shares 	$1,000.00	$1,187.05 	$0.22		0.037
I know that the current reported expense ratios of the funds are: VTI 0.03%, VTSAX 0.04%. The table indicates that the expenses for VTI are lower than for VTSAX ($0.16 vs $0.22). However, the final account value lower for VTI is lower than for VTSAX.

Why would VTI have a lower final balance if its expenses are lower while its portfolio composition is identical to VTSAX?

alex_686
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Re: Performance of VTI < VTSAX?

Post by alex_686 » Fri Feb 14, 2020 7:47 am

I would guess sone trivial NAV difference between the accountant’s estimate of the fund’s price verse the closings imbalance that happens to all stocks on the exchange.

Poorman
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Re: Performance of VTI < VTSAX?

Post by Poorman » Fri Feb 14, 2020 7:51 am

There's another thread of people wanting to move from vtsax to vti for the .01 expensive ratio savings. Guess the jokes on them ha

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JoMoney
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Re: Performance of VTI < VTSAX?

Post by JoMoney » Fri Feb 14, 2020 7:53 am

A traditional mutual fund trades at closing price NAV. It's not unusual for ETF's to trade at a premium or deficit to 'Net Asset Value".
It could be the case that the ETF was selling at a premium on 12/31/2018, and/or a deficit on 6/30/2019.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

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JoMoney
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Re: Performance of VTI < VTSAX?

Post by JoMoney » Fri Feb 14, 2020 8:06 am

If I'm reading this price chart on Morningstar correctly, it appears that on
12/31/2018 VTI closed at $127.63 with a NAV of $127.56
and on
6/30/2019 $150.09 with a NAV of $150.04

So in both instances the closing price was selling at a premium, but it was +.07 cents at the start and +.05 at the end, creating a -.02 deficit.
If a similar situation occurred at dividend reinvestment it would also have a slight impact.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

Topic Author
jco
Posts: 45
Joined: Sat Jan 25, 2020 8:53 am

Re: Performance of VTI < VTSAX?

Post by jco » Fri Feb 14, 2020 8:21 am

JoMoney wrote:
Fri Feb 14, 2020 7:53 am
A traditional mutual fund trades at closing price NAV. It's not unusual for ETF's to trade at a premium or deficit to 'Net Asset Value".
It could be the case that the ETF was selling at a premium on 12/31/2018, and/or a deficit on 6/30/2019.
JoMoney wrote:
Fri Feb 14, 2020 8:06 am
It appears that on 12/31/2018 VTI closed at $127.63 with a NAV of $127.56 and on6/30/2019 $150.09 with a NAV of $150.04

So in both instances the closing price was selling at a premium, but it was +.07 cents at the start and +.05 at the end, creating a -.02 deficit.
If a similar situation occurred at dividend reinvestment it would also have a slight impact.
That makes sense. Thank you for clarifying!

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