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Posted: 2/6/2017 2:57:47 PM EDT
[#1]
What's the expense ratio of each?
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Posted: 2/6/2017 3:01:35 PM EDT
[#2]
Quote HistoryQuoted:
What's the expense ratio of each? bingo .. ETF if you get free trades on them |
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Posted: 2/6/2017 3:16:44 PM EDT
[#3]
From what I understand, and plan to do after I research this further, is that ETFs will be better for the investor within non-tax-advantaged accounts, while the activity within mutual funds can wreak tax havoc... so mutual funds are better in tax-advantaged accounts.
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Posted: 2/6/2017 3:44:30 PM EDT
[#4]
Quote HistoryQuoted:
bingo .. ETF if you get free trades on them Quote HistoryQuoted:
Quoted:
What's the expense ratio of each? bingo .. ETF if you get free trades on them Expense Ratios: VOO - .05% VFINX - .16% VFIAX - .05% Even considering that it seems when comparing the ETF vs the Admiral shares the differences are negligible between the two, with the ETF being much easier to trade (and I believe with a Vanguard account all Vanguard products lack a trade fee). Perhaps it would be be best if I narrowed down my purpose for each. Investing in either would be very long term, I am just confused as to which I should start with. I don't have the funds available for VFIAX, so I guess it's really between VOO or VFINX. I am leaning towards VOO. |
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Posted: 2/6/2017 3:45:35 PM EDT
[#5]
Quote HistoryQuoted:
From what I understand, and plan to do after I research this further, is that ETFs will be better for the investor within non-tax-advantaged accounts, while the activity within mutual funds can wreak tax havoc... so mutual funds are better in tax-advantaged accounts. So if I were to invest in VFINX it should be in an IRA? |
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Posted: 2/6/2017 3:51:22 PM EDT
[#6]
Quote HistoryQuoted:
From what I understand, and plan to do after I research this further, is that ETFs will be better for the investor within non-tax-advantaged accounts, while the activity within mutual funds can wreak tax havoc... so mutual funds are better in tax-advantaged accounts. In the funds that he is talking about the ETF and Mutual fund are operated in the same manner, so you'd have similar issues (or not) with capital gain distributions with each class of fund. However, Vanguard is fairly unique in this regard. |
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Posted: 2/6/2017 4:18:43 PM EDT
[#7]
I don't know of any reasons why an equivalent ETF with same expenses is not better.
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Posted: 2/6/2017 5:32:11 PM EDT
[#8]
ETFs deal in "shares" like a stock... no partial shares.
Mutual funds deal in "amounts", and those can be partial shares. I can specify an order for $2000 of a mutual fund, but not an ETF. Automatic Reinvest dividend income in Mutual funds are easier, since you can do partial shares. You generally cannot specify a sale with partial shares of an ETF, unless you are selling out of a position. |
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Posted: 2/6/2017 7:31:20 PM EDT
[#9]
From your response and from the others, as well as what I've read, it seems the ETFs are the best option right now for me. I will have to keep reading up on the tax implications of each option for the long term. Overall, ETFs seem to be much more accessible. Here are some other relevant articles I've found if anyone is interested: www.etf.com and Bogleheads.
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Posted: 2/6/2017 9:57:53 PM EDT
[#10]
Quote HistoryQuoted:
In the funds that he is talking about the ETF and Mutual fund are operated in the same manner, so you'd have similar issues (or not) with capital gain distributions with each class of fund. However, Vanguard is fairly unique in this regard. Quote HistoryQuoted:
Quoted:
From what I understand, and plan to do after I research this further, is that ETFs will be better for the investor within non-tax-advantaged accounts, while the activity within mutual funds can wreak tax havoc... so mutual funds are better in tax-advantaged accounts. In the funds that he is talking about the ETF and Mutual fund are operated in the same manner, so you'd have similar issues (or not) with capital gain distributions with each class of fund. However, Vanguard is fairly unique in this regard. I thought that the trading within the ETF was "shielded" from triggering the tax events... |
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Posted: 2/7/2017 10:24:50 AM EDT
[#11]
Quote HistoryQuoted:
I thought that the trading within the ETF was "shielded" from triggering the tax events... Quote HistoryQuoted:
Quoted:
Quoted:
From what I understand, and plan to do after I research this further, is that ETFs will be better for the investor within non-tax-advantaged accounts, while the activity within mutual funds can wreak tax havoc... so mutual funds are better in tax-advantaged accounts. In the funds that he is talking about the ETF and Mutual fund are operated in the same manner, so you'd have similar issues (or not) with capital gain distributions with each class of fund. However, Vanguard is fairly unique in this regard. I thought that the trading within the ETF was "shielded" from triggering the tax events... To my knowledge and experience, ETFs are still required distribute income to the fund holders. That being said, Vanguard has historically made an effort to avoid generating capital gains within their funds and EFTs. For example, I hold some VTI which didn't distribute ANY capital gains in the last quarter. Other ETFs avoid capital gains by trading securities in-kind rather than through cash, but still have gains at times. Vanguard operates their ETFs in the exact same manner as their equivalent mutual fund. Same objectives, holdings, and management. So if their mutual fund is throwing off a lot of capital gains, their ETF for that fund will as well. |
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