Admiral vs ETFs: Some Numbers
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Admiral vs ETFs: Some Numbers
Hi all:
Just for chuckles, I compared the returns as of 1/18 for the first 9 Admiral/ETF pairs that came to mind.
In each and every case, the Admiral class shares beat the ETF shares. In each case, I chose the longest Morningstar eval period:
VTSAX/VTI 10 bp over 15 years
VFIAX/VOO 17 bp over 10 years
VEUSX/VGK 7 bp over 15 years
VPADX/VPL 12 bp over 15 years
VEMAX/VWO 4 bp over 15 years
VIVAX/VTV 9 bp over 15 years
VSIAX/VBR 23 bp over 10 years
VIMAX/VO 12 bp over 15 years
VTIAX/VXUS 17 bp over 10 years
I didn’t run the full list—I didn’t do small and mid-cap growth, and there are probably a few others I missed.
There are two possible explanations for this: “Drip drag” (delayed reinvestment of dividends) doesn’t make sense, since if stocks return 10% pa, that’s about 4bp per trading day on the dividend amount, which calculates out to much less than 0.1 bp.
The other explanation, suggested to me by Rick Ferri, is the time difference between ETF closing calculation and mutual fund closing calculation. If this is the real explanation, then is there an inherent bias favoring the open end fund over the ETF?
I’d be interested to see what other BH’s think. Because of sheer inertia, I've always favored Admiral over ETFs, but now maybe there's some data in back of that inertia.
I'd be very interested to see what other BHs think.
Bill
Just for chuckles, I compared the returns as of 1/18 for the first 9 Admiral/ETF pairs that came to mind.
In each and every case, the Admiral class shares beat the ETF shares. In each case, I chose the longest Morningstar eval period:
VTSAX/VTI 10 bp over 15 years
VFIAX/VOO 17 bp over 10 years
VEUSX/VGK 7 bp over 15 years
VPADX/VPL 12 bp over 15 years
VEMAX/VWO 4 bp over 15 years
VIVAX/VTV 9 bp over 15 years
VSIAX/VBR 23 bp over 10 years
VIMAX/VO 12 bp over 15 years
VTIAX/VXUS 17 bp over 10 years
I didn’t run the full list—I didn’t do small and mid-cap growth, and there are probably a few others I missed.
There are two possible explanations for this: “Drip drag” (delayed reinvestment of dividends) doesn’t make sense, since if stocks return 10% pa, that’s about 4bp per trading day on the dividend amount, which calculates out to much less than 0.1 bp.
The other explanation, suggested to me by Rick Ferri, is the time difference between ETF closing calculation and mutual fund closing calculation. If this is the real explanation, then is there an inherent bias favoring the open end fund over the ETF?
I’d be interested to see what other BH’s think. Because of sheer inertia, I've always favored Admiral over ETFs, but now maybe there's some data in back of that inertia.
I'd be very interested to see what other BHs think.
Bill
Re: Admiral vs ETFs: Some Numbers
How did you account for the facts that dividends|distributions are paid on different days and reinvested on different days (so at different values) by different brokerages? I would think these differences could account for several bps over many years.
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Re: Admiral vs ETFs: Some Numbers
Maybe use the full time period that both funds have existed rather than 10 or 15 years. In portfolio visualizer I see the following (using full time period):
VTI/VTSAX: ETF outperforms by 2 bps
VOO/VFIAX: MF outperforms by 2 bps
VWO/VEMAX: MF outperforms by 1 bp
VTV/VIVAX: ETF outperforms by 14 bps
VTV/VVIAX: ETF & MF have same CAGR
VGK/VEUSX: MF outperforms by 4 bps
I didn’t run all of the ones that you did, just the ones above. I’m not sure that I’m seeing a trend here.
VTI/VTSAX: ETF outperforms by 2 bps
VOO/VFIAX: MF outperforms by 2 bps
VWO/VEMAX: MF outperforms by 1 bp
VTV/VIVAX: ETF outperforms by 14 bps
VTV/VVIAX: ETF & MF have same CAGR
VGK/VEUSX: MF outperforms by 4 bps
I didn’t run all of the ones that you did, just the ones above. I’m not sure that I’m seeing a trend here.
Last edited by absolute zero on Wed Jan 19, 2022 7:57 pm, edited 1 time in total.
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Re: Admiral vs ETFs: Some Numbers
I don't have an explanation for the small performance differences, but in my case I've been using Admiral shares as a guardrail to stay away from intra-day trading. I'm okay with all my purchases and redemptions happening at NAV prices.Bill Bernstein wrote: Wed Jan 19, 2022 7:01 pm I’d be interested to see what other BH’s think. Because of sheer inertia, I've always favored Admiral over ETFs, but now maybe there's some data in back of that inertia.
I'd be very interested to see what other BHs think.
Bill
Like many folks, I suspected that this was costing me 1 or 2 basis points, but evidently not.

Regards,
"All of us would be better investors if we just made fewer decisions." - Daniel Kahneman
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Re: Admiral vs ETFs: Some Numbers
Could the simplest explanation be that for most of those 10 or 15 years, the Admiral shares had slightly lower Expense Ratios than the ETF?
The drop in ERs for ETFs to become lower only happened in 2019/early 2020 if I remember correctly.
The drop in ERs for ETFs to become lower only happened in 2019/early 2020 if I remember correctly.
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Re: Admiral vs ETFs: Some Numbers
Thanks for the visualizer data.
Comparing the two, I have to wonder if there isn't some sort of bias in one or the other database. For example, for VTV/VVIAX, the 15 year data shows the Admiral fund up by 9 bp, starting in early 2007 but visualizer, i assume, starts with incep in mid-2004, shows the ETF up by 14 bps/y?
That's a heck of a swing, about 3.5% of total return, in the 2.5 years between those two start dates.
Or, alternatively, this may have been a relatively recent change in the way that Vanguard operates the different classes?
Be interested to see what others find and think.
Bill
Comparing the two, I have to wonder if there isn't some sort of bias in one or the other database. For example, for VTV/VVIAX, the 15 year data shows the Admiral fund up by 9 bp, starting in early 2007 but visualizer, i assume, starts with incep in mid-2004, shows the ETF up by 14 bps/y?
That's a heck of a swing, about 3.5% of total return, in the 2.5 years between those two start dates.
Or, alternatively, this may have been a relatively recent change in the way that Vanguard operates the different classes?
Be interested to see what others find and think.
Bill
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Re: Admiral vs ETFs: Some Numbers
Whoops - I had used VIVAX since I saw that in your original post, but I just realized that VIVAX is investor shares. When I re-ran just now using VVIAX (admiral) it shows that the admiral fund has the exact same CAGR as the ETF going back to inception. So it sounds like a tie on that comparison.Bill Bernstein wrote: Wed Jan 19, 2022 7:41 pm Comparing the two, I have to wonder if there isn't some sort of bias in one or the other database. For example, for VTV/VVIAX, the 15 year data shows the ETF up by 9 bp, starting in early 2007 but visualizer, i assume, starts with incep in mid-2004, shows the ETF up by 14 bps/y?
That's a heck of a swing, about 3.5% of total return, in the 2.5 years between those two start dates.
Re: Admiral vs ETFs: Some Numbers
Hi Bill, nice to see you posting here.Bill Bernstein wrote: Wed Jan 19, 2022 7:01 pm... There are two possible explanations for this: “Drip drag” (delayed reinvestment of dividends) doesn’t make sense, since if stocks return 10% pa, that’s about 4bp per trading day on the dividend amount, which calculates out to much less than 0.1 bp.
The other explanation, suggested to me by Rick Ferri, is the time difference between ETF closing calculation and mutual fund closing calculation. If this is the real explanation, then is there an inherent bias favoring the open end fund over the ETF?
Well I'm glad to see this subject brought up because in the past when I owned the ETF DLS (Wisdom Tree proxy for international small value), and Vanguard's emerging market ETF, I was always frustrated at the seemingly unfavorable way distributions were reinvested. Not being any kind of authority, it was just an uncomfortable hunch I couldn't put my finger on. It never seemed I was getting a fair price and I always felt I was getting shorted. I brought it up on this forum once or twice I think, without much response. Anyway ETFs are a thing of the past for me, largely because of my suspicions about shadowy reinvestment arbitrage. So it's nice to FINALLY see some intelligent people illuminating the subject and looking for an explanation.
THX

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Re: Admiral vs ETFs: Some Numbers
You are confusing me. Please elaborate on your phrase "shadowy reinvestment arbitrage."tetractys wrote: Wed Jan 19, 2022 8:05 pm Anyway ETFs are a thing of the past for me, largely because of my suspicions about shadowy reinvestment arbitrage.
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Re: Admiral vs ETFs: Some Numbers
Oooh. I know just what tetractys means. If the manager takes a few days to reinvest . . .
I'd never thought of that one.
Bill
I'd never thought of that one.
Bill
Re: Admiral vs ETFs: Some Numbers
It's good to confirm this -- When I first started investing in ETF's the consensus (even from Jack Bogle) was that the ETF version were the same (but with possible tax advantages in some cases) and the only 'downside' was the spread (which for these big vanguard funds is pretty small)
I'm glad to see this appears to be true.
I'm glad to see this appears to be true.
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Re: Admiral vs ETFs: Some Numbers
I tried switching to ETF's a few years back, didn't last very long for me. Even if the Vanguard ETF's did return slightly more than the mutual fund version, I'm confident my behavior negated that gain. I found myself trying to time my purchases, sometimes even delaying purchases for a few days after pay day. I quickly figured out that wasn't for me, and I switched back to the mutual fund shares for the auto investment feature.Bill Bernstein wrote: Wed Jan 19, 2022 7:01 pm I’d be interested to see what other BH’s think. Because of sheer inertia, I've always favored Admiral over ETFs, but now maybe there's some data in back of that inertia.

Retired Firefighter | 65% Equities/35% TSP G Fund
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Re: Admiral vs ETFs: Some Numbers
Building on absolute zero's analysis...
- How much does the result vary if the start date is changed?
- How does the result change for a shorter period of time (like 5yrs)?
"Anyone who claims to understand quantum theory is either lying or crazy" -- Richard Feynman
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Re: Admiral vs ETFs: Some Numbers
Which "manager" are you referring to? The fund manager doesn't have anything to do with reinvesting dividends to my account, do they? That's all on the brokerage.Bill Bernstein wrote: Wed Jan 19, 2022 9:04 pm Oooh. I know just what tetractys means. If the manager takes a few days to reinvest . . .
I'd never thought of that one.
Bill
Re: Admiral vs ETFs: Some Numbers
I'm curious about this myself. If anything ETFs seem more transparent and simpler than MFs, though I think both are fine.UpperNwGuy wrote: Wed Jan 19, 2022 8:12 pmYou are confusing me. Please elaborate on your phrase "shadowy reinvestment arbitrage."tetractys wrote: Wed Jan 19, 2022 8:05 pm Anyway ETFs are a thing of the past for me, largely because of my suspicions about shadowy reinvestment arbitrage.
ROTH: 50% AVGE, 10% DFAX, 40% BNDW. Taxable: 50% BNDW, 40% AVGE, 10% DFAX.
Re: Admiral vs ETFs: Some Numbers
The real question is when are you buying the ETF vs the Admiral fund.
Let’s take a 10 year return Jan 1, 2012 - Dec 31, 2021.
It’s very easy to have your MF money invested in that time frame. Place your buy order on 12/30/11 and you’re money will be invested at the closing NAV and ready to go on market open Jan 3. 2012.
If you want to buy VTI though you would buy on 1/3/12. VTI closed on 12/30/11 at 64.30 but opened on 1/3/12 at 65.41, with a range of trading of 65.14 - 65.52. If you bought VTI on 1/3/12 you lost between 1-2% vs the mutual fund that you’ll never get back.
Of course this can go the other way as well, but when looking at a few static investment time periods as Dr. Bernstein does, where you start matters.
Let’s take a 10 year return Jan 1, 2012 - Dec 31, 2021.
It’s very easy to have your MF money invested in that time frame. Place your buy order on 12/30/11 and you’re money will be invested at the closing NAV and ready to go on market open Jan 3. 2012.
If you want to buy VTI though you would buy on 1/3/12. VTI closed on 12/30/11 at 64.30 but opened on 1/3/12 at 65.41, with a range of trading of 65.14 - 65.52. If you bought VTI on 1/3/12 you lost between 1-2% vs the mutual fund that you’ll never get back.
Of course this can go the other way as well, but when looking at a few static investment time periods as Dr. Bernstein does, where you start matters.
Re: Admiral vs ETFs: Some Numbers
Can you say more about how you arrived at these numbers? I pulled up Morningstar's Growth of $10k chart for VTSAX/VTI over the 15 years ending 2022-01-18, and it has VTI with the tiny edge cumulatively (335.50% vs 335.28%):Bill Bernstein wrote: Wed Jan 19, 2022 7:01 pm Just for chuckles, I compared the returns as of 1/18 for the first 9 Admiral/ETF pairs that came to mind.
In each and every case, the Admiral class shares beat the ETF shares. In each case, I chose the longest Morningstar eval period:
VTSAX/VTI 10 bp over 15 years
VFIAX/VOO 17 bp over 10 years
VEUSX/VGK 7 bp over 15 years
VPADX/VPL 12 bp over 15 years
VEMAX/VWO 4 bp over 15 years
VIVAX/VTV 9 bp over 15 years
VSIAX/VBR 23 bp over 10 years
VIMAX/VO 12 bp over 15 years
VTIAX/VXUS 17 bp over 10 years

In case it helps, here are Portfolio Visualizer links comparing performance for each pair from the inception of the younger fund through EOY 2021 (H2H result using PV-reported CAGR):
The greater parity here makes me curious about the numbers in the OP. As livesoft noted, the actual ETF performance will depend on brokers' DRIP mechanics (Portfolio Visualizer only says that dividends are reinvested, not how/when), whereas that's out of your hands with the mutual fund.
A useful razor: anyone asking about speculative strategies on Bogleheads.org has no business using them.
Re: Admiral vs ETFs: Some Numbers
I do not follow you on that one. If investor A buys $10,000 of a MF on 12/31/11 and investor B buys $10,000 of VTI on 1/4/12 they both have $10,000 invested,only at slightly different prices per share. Investor B has lost nothing.Jags4186 wrote: Thu Jan 20, 2022 5:14 am The real question is when are you buying the ETF vs the Admiral fund.
Let’s take a 10 year return Jan 1, 2012 - Dec 31, 2021.
It’s very easy to have your MF money invested in that time frame. Place your buy order on 12/30/11 and you’re money will be invested at the closing NAV and ready to go on market open Jan 3. 2012.
If you want to buy VTI though you would buy on 1/3/12. VTI closed on 12/30/11 at 64.30 but opened on 1/3/12 at 65.41, with a range of trading of 65.14 - 65.52. If you bought VTI on 1/3/12 you lost between 1-2% vs the mutual fund that you’ll never get back.
Of course this can go the other way as well, but when looking at a few static investment time periods as Dr. Bernstein does, where you start matters.
If you are considering the "lost opportunity" of that one or two days trading investor B could have bought in on 12/29/11 and reversed it. All depends on which way the market goes for those few days or business hours.
Re: Admiral vs ETFs: Some Numbers
What I am saying is that in practical terms, when comparing returns of ETFs and mutual funds, one must consider actual entry and exit points. And in the case of ETFs you can't just look at market open prices on day 1 and market close price on day 365 and say they performed identically or within 3 or 4 bps of each other over the course of a year. You could be 100-200 bps off--in either direction mind you--simply based on mechanics of purchasing an ETF.vtsnowdin wrote: Thu Jan 20, 2022 10:57 amI do not follow you on that one. If investor A buys $10,000 of a MF on 12/31/11 and investor B buys $10,000 of VTI on 1/4/12 they both have $10,000 invested,only at slightly different prices per share. Investor B has lost nothing.Jags4186 wrote: Thu Jan 20, 2022 5:14 am The real question is when are you buying the ETF vs the Admiral fund.
Let’s take a 10 year return Jan 1, 2012 - Dec 31, 2021.
It’s very easy to have your MF money invested in that time frame. Place your buy order on 12/30/11 and you’re money will be invested at the closing NAV and ready to go on market open Jan 3. 2012.
If you want to buy VTI though you would buy on 1/3/12. VTI closed on 12/30/11 at 64.30 but opened on 1/3/12 at 65.41, with a range of trading of 65.14 - 65.52. If you bought VTI on 1/3/12 you lost between 1-2% vs the mutual fund that you’ll never get back.
Of course this can go the other way as well, but when looking at a few static investment time periods as Dr. Bernstein does, where you start matters.
If you are considering the "lost opportunity" of that one or two days trading investor B could have bought in on 12/29/11 and reversed it. All depends on which way the market goes for those few days or business hours.
Hope that makes sense.
Re: Admiral vs ETFs: Some Numbers
Yes it makes sense but if you buy and hold for say ten years will that be the diffidence in performance of any two funds? .Jags4186 wrote: Thu Jan 20, 2022 11:13 amWhat I am saying is that in practical terms, when comparing returns of ETFs and mutual funds, one must consider actual entry and exit points. And in the case of ETFs you can't just look at market open prices on day 1 and market close price on day 365 and say they performed identically or within 3 or 4 bps of each other over the course of a year. You could be 100-200 bps off--in either direction mind you--simply based on mechanics of purchasing an ETF.vtsnowdin wrote: Thu Jan 20, 2022 10:57 amI do not follow you on that one. If investor A buys $10,000 of a MF on 12/31/11 and investor B buys $10,000 of VTI on 1/4/12 they both have $10,000 invested,only at slightly different prices per share. Investor B has lost nothing.Jags4186 wrote: Thu Jan 20, 2022 5:14 am The real question is when are you buying the ETF vs the Admiral fund.
Let’s take a 10 year return Jan 1, 2012 - Dec 31, 2021.
It’s very easy to have your MF money invested in that time frame. Place your buy order on 12/30/11 and you’re money will be invested at the closing NAV and ready to go on market open Jan 3. 2012.
If you want to buy VTI though you would buy on 1/3/12. VTI closed on 12/30/11 at 64.30 but opened on 1/3/12 at 65.41, with a range of trading of 65.14 - 65.52. If you bought VTI on 1/3/12 you lost between 1-2% vs the mutual fund that you’ll never get back.
Of course this can go the other way as well, but when looking at a few static investment time periods as Dr. Bernstein does, where you start matters.
If you are considering the "lost opportunity" of that one or two days trading investor B could have bought in on 12/29/11 and reversed it. All depends on which way the market goes for those few days or business hours.
Hope that makes sense.
For example $10,000 put into VTI ten years ago would now be $35,588 While $10,000 put into VWO would only be worth $12,070.
Re: Admiral vs ETFs: Some Numbers
The admiral share class of VTI is VTSAX, not VWO. So that is not an apples-to-apples comparison for the purpose of this thread (which compares the ETF class to the Admiral class of the same fund).vtsnowdin wrote: Thu Jan 20, 2022 11:32 amFor example $10,000 put into VTI ten years ago would now be $35,588 While $10,000 put into VWO would only be worth $12,070.
As of today, Morningstar says the 10 year gain (total return) of $10,000 in VTI is $30,701, the 10 year gain (total return) of $10,000 in VTSAX is $30,682. For a $19 difference over 10 years.
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Re: Admiral vs ETFs: Some Numbers
Point taken.David Jay wrote: Thu Jan 20, 2022 1:11 pmThe admiral share class of VTI is VTSAX, not VWO. So that is not an apples-to-apples comparison for the purpose of this thread (which compares the ETF class to the Admiral class of the same fund).vtsnowdin wrote: Thu Jan 20, 2022 11:32 amFor example $10,000 put into VTI ten years ago would now be $35,588 While $10,000 put into VWO would only be worth $12,070.
As of today, Morningstar says the 10 year gain (total return) of $10,000 in VTI is $30,701, the 10 year gain (total return) of $10,000 in VTSAX is $30,682. For a $19 difference over 10 years.
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Re: Admiral vs ETFs: Some Numbers
John Rekenthaler pointed out a flaw in my original method, which was using daily returns, which he tells me are unreliable; you have to use the monthlies.
When you do, ending 12/31, here's what you get:
VTSAX/VTI 10.70/10.69 over 15 years
VFIAX/VOO 16.51/16.52 over 10 years
VEUSX/VGl 3.90/3.84 over 15 years
VPADX/VPL 3.99/3.91 over 15 years
VEMAX/VWO 4.51/4.48 over 15 years
VVIAX/VTV 8.08/8.08 over 15 years
VSIAX/VBR 8.57/8.61 over 15 years
VIMAX/VO 10.33/10.31 over 15 years
VTIAX/VXUS 7.68/7.62 over 10 years
Not quite as dramatic as before: advantage MF in 6 cases (average 4 bp), ETF in 2 (average 2.5 bp) and tie in 1.
So my original point, that ETFs are inferior to MFs, gets shot down, but another point still remains: the supposed 1 bp advantage of ETF over plain vanilla fund is a non-issue.
Bill
When you do, ending 12/31, here's what you get:
VTSAX/VTI 10.70/10.69 over 15 years
VFIAX/VOO 16.51/16.52 over 10 years
VEUSX/VGl 3.90/3.84 over 15 years
VPADX/VPL 3.99/3.91 over 15 years
VEMAX/VWO 4.51/4.48 over 15 years
VVIAX/VTV 8.08/8.08 over 15 years
VSIAX/VBR 8.57/8.61 over 15 years
VIMAX/VO 10.33/10.31 over 15 years
VTIAX/VXUS 7.68/7.62 over 10 years
Not quite as dramatic as before: advantage MF in 6 cases (average 4 bp), ETF in 2 (average 2.5 bp) and tie in 1.
So my original point, that ETFs are inferior to MFs, gets shot down, but another point still remains: the supposed 1 bp advantage of ETF over plain vanilla fund is a non-issue.
Bill
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Re: Admiral vs ETFs: Some Numbers
I have done the M* approach for checking the Admiral vs ETF shares.... and sometimes find myself accidently harvesting trailing returns from different periods. Using daily for one, last month or last quarter for another, in any combination. Using the ETF price value vs NAV value often varies by small amounts but can also be a source of variance between the two.Bill Bernstein wrote: Wed Jan 19, 2022 7:41 pm Thanks for the visualizer data.
Comparing the two, I have to wonder if there isn't some sort of bias in one or the other database. For example, for VTV/VVIAX, the 15 year data shows the Admiral fund up by 9 bp, starting in early 2007 but visualizer, i assume, starts with incep in mid-2004, shows the ETF up by 14 bps/y?
That's a heck of a swing, about 3.5% of total return, in the 2.5 years between those two start dates.
Or, alternatively, this may have been a relatively recent change in the way that Vanguard operates the different classes?
Be interested to see what others find and think.
Bill
I checked the numbers for VTSAX vs VTI, and VSIAX vs VBR and came up with the following.... Showing on a spreadsheet, since I find my self making all kinds of transcribing errors harvesting numbers from M* tables.
https://docs.google.com/spreadsheets/d/ ... sp=sharing
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Re: Admiral vs ETFs: Some Numbers
Bill,
Are the bps numbers you posted cumulative or annualized? From the way you phrased it, it sounds like cumulative. 20 basis points over 10-15 years seems like noise to me but it is odd that it seems to be pretty consistent.
Are the bps numbers you posted cumulative or annualized? From the way you phrased it, it sounds like cumulative. 20 basis points over 10-15 years seems like noise to me but it is odd that it seems to be pretty consistent.
Re: Admiral vs ETFs: Some Numbers
I notice that the international funds all come out ahead with the mutual fund class. Is this possibly the result of the mutual fund class having made a fair-value adjustment which didn't match the ETF prices on 12/31/2006? If the fair-value adjustment had the ETFs at a 0.60% premium then, and at no premium or discount on 12/31/2021, then the 15-year mutual fund returns would be 0.04% higher assuming the same actual returns.Bill Bernstein wrote: Thu Jan 20, 2022 3:06 pm John Rekenthaler pointed out a flaw in my original method, which was using daily returns, which he tells me are unreliable; you have to use the monthlies.
When you do, ending 12/31, here's what you get:
VTSAX/VTI 10.70/10.69 over 15 years
VFIAX/VOO 16.51/16.52 over 10 years
VEUSX/VGl 3.90/3.84 over 15 years
VPADX/VPL 3.99/3.91 over 15 years
VEMAX/VWO 4.51/4.48 over 15 years
VVIAX/VTV 8.08/8.08 over 15 years
VSIAX/VBR 8.57/8.61 over 15 years
VIMAX/VO 10.33/10.31 over 15 years
VTIAX/VXUS 7.68/7.62 over 10 years
Not quite as dramatic as before: advantage MF in 6 cases (average 4 bp), ETF in 2 (average 2.5 bp) and tie in 1.
So my original point, that ETFs are inferior to MFs, gets shot down, but another point still remains: the supposed 1 bp advantage of ETF over plain vanilla fund is a non-issue.
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Re: Admiral vs ETFs: Some Numbers
thank you for posting this Dr. Bernstein and everyone who has responded with their thoughts, comparisons, etc. This is a very interesting topic in light of wondering recently if I was a sucker sticking with MFs when others talked about buying ETFs at below NAV and I was left wondering if that were possible to do consistently which surely would lead to outperformance relative to MFs.
looks like MF had the advantage 2/3rds of the time (6 out of 9). That could change in the future, and even if that outperformance persists, it would only be classified as negligible/nonsignifcant based on the amount of outperformance.
since we're not sure what may have accounted for the difference, is it possible someone could contact Vanguard to shed light/provide an explanation? Would John Rekenthaler be able to interview someone at Vanguard if this topic might lead to a morningstar article?
looks like MF had the advantage 2/3rds of the time (6 out of 9). That could change in the future, and even if that outperformance persists, it would only be classified as negligible/nonsignifcant based on the amount of outperformance.
since we're not sure what may have accounted for the difference, is it possible someone could contact Vanguard to shed light/provide an explanation? Would John Rekenthaler be able to interview someone at Vanguard if this topic might lead to a morningstar article?
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Re: Admiral vs ETFs: Some Numbers
Same here, 100%retired@50 wrote: Wed Jan 19, 2022 7:30 pm in my case I've been using Admiral shares as a guardrail to stay away from intra-day trading.
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Re: Admiral vs ETFs: Some Numbers
I just found this thread.
Coincidentally, just a few days ago I used Morningstar data to compare a series of Vanguard MF Admiral v ETF pairs as I am about to deploy a lump sum and wanted to understand the difference in performance. Many BH and other observers have focused on the currently lower ER of ETF as rationale for their superiority, but as there are many moving parts under the hood, hidden from view, the outcome of relative performance seems more relevant. I looked at both market price and NAV annual performance for the ETF as these are separately reported on Morningstar. However, as I'm not clear which market price is used (for example opening market price on Jan 1 to closing market price on Dec 31), there is some uncertainty. And while you buy and sell an ETF at market price, if you're a long-term investor, in the interim your DRIP I presume is bought at NAV. So do you really know which regime you are living under (what are the mechanics invisible to you)?
In any case my conclusion was performance-wise pretty much a wash, nothing systematic. Sometimes MF did better, sometimes ETF. But I think I have more confidence that the MF numbers represent the MF investors outcome, whereas the ETF data are a bit less transparent (at least to me). I presume the buy-and-hold will live somewhere btwn the Mkt Price and NAV performance, depending on the exact mechanics of both purchasing, DRIP and selling.
Here are just two examples of many:
Return: MF Admiral / ETF (Mkt Price) / ETF (NAV)
VVIAX v VTV:
2021 26.49 26.52 26.57
2020 2.29 2.26 2.23
2019 25.82 25.65 25.85
Return: MF Admiral / ETF (Mkt Price) / ETF (NAV)
VTIAX v VXUS:
2021 8.62 9.00 8.69
2020 11.28 10.69 11.32
2019 21.51 21.75 21.58
Coincidentally, just a few days ago I used Morningstar data to compare a series of Vanguard MF Admiral v ETF pairs as I am about to deploy a lump sum and wanted to understand the difference in performance. Many BH and other observers have focused on the currently lower ER of ETF as rationale for their superiority, but as there are many moving parts under the hood, hidden from view, the outcome of relative performance seems more relevant. I looked at both market price and NAV annual performance for the ETF as these are separately reported on Morningstar. However, as I'm not clear which market price is used (for example opening market price on Jan 1 to closing market price on Dec 31), there is some uncertainty. And while you buy and sell an ETF at market price, if you're a long-term investor, in the interim your DRIP I presume is bought at NAV. So do you really know which regime you are living under (what are the mechanics invisible to you)?
In any case my conclusion was performance-wise pretty much a wash, nothing systematic. Sometimes MF did better, sometimes ETF. But I think I have more confidence that the MF numbers represent the MF investors outcome, whereas the ETF data are a bit less transparent (at least to me). I presume the buy-and-hold will live somewhere btwn the Mkt Price and NAV performance, depending on the exact mechanics of both purchasing, DRIP and selling.
Here are just two examples of many:
Return: MF Admiral / ETF (Mkt Price) / ETF (NAV)
VVIAX v VTV:
2021 26.49 26.52 26.57
2020 2.29 2.26 2.23
2019 25.82 25.65 25.85
Return: MF Admiral / ETF (Mkt Price) / ETF (NAV)
VTIAX v VXUS:
2021 8.62 9.00 8.69
2020 11.28 10.69 11.32
2019 21.51 21.75 21.58
Re: Admiral vs ETFs: Some Numbers
Would you mind updating your OP? Given your stature, others continue to point to this thread, and there's no indication that the data presented above is flawed.Bill Bernstein wrote: Thu Jan 20, 2022 3:06 pm John Rekenthaler pointed out a flaw in my original method, which was using daily returns, which he tells me are unreliable; you have to use the monthlies.
A useful razor: anyone asking about speculative strategies on Bogleheads.org has no business using them.
Re: Admiral vs ETFs: Some Numbers
That doesn't seem to match the situation any longer; if I compare VTI to VTSAX using the Morningstar interactive graph and set the timeframe to Max.Bill Bernstein wrote: Wed Jan 19, 2022 7:01 pm Hi all:
Just for chuckles, I compared the returns as of 1/18 for the first 9 Admiral/ETF pairs that came to mind.
In each and every case, the Admiral class shares beat the ETF shares. In each case, I chose the longest Morningstar eval period:
VTSAX/VTI 10 bp over 15 years
VTSAX +179,825.90 | +1,798.26%
VTI +179,894.99 | +1,798.95%
VTI seems to be ahead by a hair.
Things seem to have changed in the last 15 years
Global stocks, IG/HY bonds, gold & digital assets at market weights 78% / 17% / 5% || LMP: TIPS ladder
Re: Admiral vs ETFs: Some Numbers
So, is it fair to say it's time to convert my MF, especially my VTIAX holdings, to ETF?watchnerd wrote: Mon Mar 07, 2022 3:27 pmThat doesn't seem to match the situation any longer; if I compare VTI to VTSAX using the Morningstar interactive graph and set the timeframe to Max.Bill Bernstein wrote: Wed Jan 19, 2022 7:01 pm Hi all:
Just for chuckles, I compared the returns as of 1/18 for the first 9 Admiral/ETF pairs that came to mind.
In each and every case, the Admiral class shares beat the ETF shares. In each case, I chose the longest Morningstar eval period:
VTSAX/VTI 10 bp over 15 years
VTSAX +179,825.90 | +1,798.26%
VTI +179,894.99 | +1,798.95%
VTI seems to be ahead by a hair.
Things seem to have changed in the last 15 years

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Re: Admiral vs ETFs: Some Numbers
Would you really make a change over $70 over the max time frame? Bottom line of this thread is that the differences are tiny and vary depending on time period and whether you use daily or monthly data and that tells me enough that this is inconsequential, Bogle-heady type stuff. If you like mutual funds, use them and if you like ETFs, use those. I use the ETFs.Que1999 wrote: Sat Jun 11, 2022 7:24 amSo, is it fair to say it's time to convert my MF, especially my VTIAX holdings, to ETF?watchnerd wrote: Mon Mar 07, 2022 3:27 pmThat doesn't seem to match the situation any longer; if I compare VTI to VTSAX using the Morningstar interactive graph and set the timeframe to Max.Bill Bernstein wrote: Wed Jan 19, 2022 7:01 pm Hi all:
Just for chuckles, I compared the returns as of 1/18 for the first 9 Admiral/ETF pairs that came to mind.
In each and every case, the Admiral class shares beat the ETF shares. In each case, I chose the longest Morningstar eval period:
VTSAX/VTI 10 bp over 15 years
VTSAX +179,825.90 | +1,798.26%
VTI +179,894.99 | +1,798.95%
VTI seems to be ahead by a hair.
Things seem to have changed in the last 15 years
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Re: Admiral vs ETFs: Some Numbers
Not necessarily. If you expect to gain 0.01% per year, that is $10 on a $100K investment. The convenience of mutual funds over ETFs could be worth more than $10 to you.Que1999 wrote: Sat Jun 11, 2022 7:24 amSo, is it fair to say it's time to convert my MF, especially my VTIAX holdings, to ETF?watchnerd wrote: Mon Mar 07, 2022 3:27 pmThat doesn't seem to match the situation any longer; if I compare VTI to VTSAX using the Morningstar interactive graph and set the timeframe to Max.Bill Bernstein wrote: Wed Jan 19, 2022 7:01 pm Hi all:
Just for chuckles, I compared the returns as of 1/18 for the first 9 Admiral/ETF pairs that came to mind.
In each and every case, the Admiral class shares beat the ETF shares. In each case, I chose the longest Morningstar eval period:
VTSAX/VTI 10 bp over 15 years
VTSAX +179,825.90 | +1,798.26%
VTI +179,894.99 | +1,798.95%
VTI seems to be ahead by a hair.
Things seem to have changed in the last 15 years
![]()
I prefer mutual funds over ETFs, because trading ETFs is less convenient. Therefore, I still hold a lot of my portfolio in Vanguard mutual funds with ETF share classes. I use ETFs when there is no mutual fund, or when the mutual fund is much more expensive (I bought FTSE All-World Ex-US Small-Cap as an ETF from the start; at that time, the mutual fund had a purchase fee and no Admiral share class.)
Re: Admiral vs ETFs: Some Numbers
Working on comparing VTIAX (International) with it's ETF equivalent (VXUS), this is an incredibly informative thread. I notice a 4bp difference in ER, I'm assuming the returns provided all account for expenses, does the VTIAX (mutual fund) advantage still persist today (1/2/2025)?
70/30 stocks/bonds: 60/40 US/Int stocks
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Re: Admiral vs ETFs: Some Numbers
You know you've won the game when you're starting to worry about single digit basis point differences in returns. This is on my list of stuff that just doesn't matter. When it's more convenient to use the MF I do that. When the ETF, I do that. I'm not choosing based on ER or performance differences.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy |
4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course
Re: Admiral vs ETFs: Some Numbers
+1White Coat Investor wrote: Thu Jan 02, 2025 11:45 am You know you've won the game when you're starting to worry about single digit basis point differences in returns. This is on my list of stuff that just doesn't matter. When it's more convenient to use the MF I do that. When the ETF, I do that. I'm not choosing based on ER or performance differences.
"Owning the stock market over the long term is a winner's game. Attempting to beat the market is a loser's game. ..Don't look for the needle in the haystack. Just buy the haystack." Jack Bogle
Re: Admiral vs ETFs: Some Numbers
Good point, there is no worry component, this is optimization and curiosity..
70/30 stocks/bonds: 60/40 US/Int stocks
Re: Admiral vs ETFs: Some Numbers
The OP (Dr. Bernstein) later posted an update:phiMD wrote: Thu Jan 02, 2025 11:41 am Working on comparing VTIAX (International) with it's ETF equivalent (VXUS), this is an incredibly informative thread. I notice a 4bp difference in ER, I'm assuming the returns provided all account for expenses, does the VTIAX (mutual fund) advantage still persist today (1/2/2025)?
The performance differences we've seen through backtests are very minor. Changes in starting or ending date of a backtest make a difference.Bill Bernstein wrote: Thu Jan 20, 2022 3:06 pm ...
Not quite as dramatic as before: advantage MF in 6 cases (average 4 bp), ETF in 2 (average 2.5 bp) and tie in 1.
So my original point, that ETFs are inferior to MFs, gets shot down, but another point still remains: the supposed 1 bp advantage of ETF over plain vanilla fund is a non-issue.
The bid/ask spread makes a difference, as does when dividends are reinvested. Thus your choice of brokerage matters too. These factors aren't accounted for in backtests.
IMO, I don't think there ever was a persistent advantage in the first place -- too many factors were and remain at play to draw a firm conclusion that the mutual fund share class performed or will better.
The non-performance aspects of ETFs & mutual funds are probably more important to most people. I'm glad Vanguard has these multiple share class funds so we each get to choose!
Re: Admiral vs ETFs: Some Numbers
Can you enumerate when are the convenient circumstances for each choice?White Coat Investor wrote: Thu Jan 02, 2025 11:45 am You know you've won the game when you're starting to worry about single digit basis point differences in returns. This is on my list of stuff that just doesn't matter. When it's more convenient to use the MF I do that. When the ETF, I do that. I'm not choosing based on ER or performance differences.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Admiral vs ETFs: Some Numbers
I have a 401(k) at Fidelity. Super easy to use Vanguard ETFs there. A pain (and a higher commission) to use Vanguard MFs there. I have another 401(k) at Schwab. Similar story. In taxable, there are more TLHing partners for ETFs than funds typically, even if you're at Vanguard.yankees60 wrote: Tue Jan 07, 2025 11:37 amCan you enumerate when are the convenient circumstances for each choice?White Coat Investor wrote: Thu Jan 02, 2025 11:45 am You know you've won the game when you're starting to worry about single digit basis point differences in returns. This is on my list of stuff that just doesn't matter. When it's more convenient to use the MF I do that. When the ETF, I do that. I'm not choosing based on ER or performance differences.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy |
4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course
Re: Admiral vs ETFs: Some Numbers
Although TLHing with ETFs can be trickier than MFs if one wants zero time out of market.White Coat Investor wrote: Tue Jan 07, 2025 12:19 pmI have a 401(k) at Fidelity. Super easy to use Vanguard ETFs there. A pain (and a higher commission) to use Vanguard MFs there. I have another 401(k) at Schwab. Similar story. In taxable, there are more TLHing partners for ETFs than funds typically, even if you're at Vanguard.yankees60 wrote: Tue Jan 07, 2025 11:37 am
Can you enumerate when are the convenient circumstances for each choice?
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Re: Admiral vs ETFs: Some Numbers
Oh, I prefer TLHing with funds for sure, but there are just more good ETFs for the asset classes I want than there are funds at a given brokerage.Hot Sauce wrote: Tue Jan 07, 2025 12:22 pmAlthough TLHing with ETFs can be trickier than MFs if one wants zero time out of market.White Coat Investor wrote: Tue Jan 07, 2025 12:19 pm
I have a 401(k) at Fidelity. Super easy to use Vanguard ETFs there. A pain (and a higher commission) to use Vanguard MFs there. I have another 401(k) at Schwab. Similar story. In taxable, there are more TLHing partners for ETFs than funds typically, even if you're at Vanguard.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy |
4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course