PeterParkerParticipantStatus: PhysicianPosts: 7Joined: 09/28/2017
It appears that Vanguard ETFs are now cheaper than their admiral shares. From my understanding, you can convert mutual funds to their equivalent ETF on a tax-free basis even in a taxable account. As such, I was thinking of converting my VTSAX to VTI and VTIAX to VXUS. Is there any downside in doing so?May 8, 2019 at 1:12 pm MST #213228
I’m curious, how much would you save in expenses over the course of the year by doing so?May 8, 2019 at 1:57 pm MST #213239
The difference is inconsequential.
Do you want to deal with ETFs?May 8, 2019 at 2:02 pm MST #213241PeterParkerParticipantStatus: PhysicianPosts: 7Joined: 09/28/2017
It wouldn’t save much over the course of a year by any means but it didn’t seem like there was any real downside. What are the issues with dealing with ETFs?May 8, 2019 at 2:04 pm MST #213242
Go read all the wiki page
https://www.bogleheads.org/wiki/Exchange-traded_fundMay 8, 2019 at 2:18 pm MST #213248May 8, 2019 at 2:27 pm MST #213253jzParticipantStatus: PhysicianPosts: 669Joined: 01/09/2016May 8, 2019 at 2:29 pm MST #213255
What is dated exactly?
Yes ETFs are more tax efficient.May 8, 2019 at 2:41 pm MST #213264ETFs are more tax efficient.Click to expand…
generally, yes, but more specifically with Vanguard, the differences are minimal to nilsouthernerdocParticipantStatus: PhysicianPosts: 70Joined: 03/10/2019May 8, 2019 at 4:54 pm MST #213299CordMcNallyParticipantStatus: PhysicianPosts: 2690Joined: 01/03/2017
I wouldn’t switch them with Vanguard. For Vanguard, mutual funds and ETFs are basically the same from a tax standpoint. I suspect other brokerages will follow suit when their patent expires. It looks like for VTSAX vs. VTI you’re looking at .04% vs. .03% while VTIAX vs. VXUS is .11% vs. .09%. At some point you run up against the law of diminishing returns and this situation wouldn’t make me change just for the sake of changing.
“But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
― Benjamin Graham, The Intelligent InvestorFIREshrinkParticipantStatus: PhysicianPosts: 984Joined: 01/11/2017
MFs are nicer for investing specific dollar amounts. With ETFs you always end up with a few bucks leftover.
One downside is more complexity. The transaction history sure looks more complex and confusing after the conversion. I’ve done this. When I thought I was going to transfer a holding away from Vanguard. Couldn’t transfer admiral shares of mutual funds. But could transfer ETF shares. Never did end up transferring out. Eventually liquidated. But it was harder later on to figure out if the basis and gains figures were correct on my 1099. I’d have to look back at statements to be more specific. But it was confusing. It would have been simple had I not made the MF to ETF conversion. Brokerages, Vanguard included, can and do make mistakes.
The real question for the OP should be, what’s the real upside?CraigyParticipantStatus: SpousePosts: 2020Joined: 09/16/2016
FWIW, most of my vanguard holdings are ETFs. Only exceptions are 401ks and money market funds.
I have considered switching to admiral shares a few times but thusfar I see no downside to the ETFs, or at least not enough to get me to move from one to the other.
LEVEL 1 WCI FORUM MEMBER.May 9, 2019 at 2:29 pm MST #213533CraigyParticipantStatus: SpousePosts: 2020Joined: 09/16/2016
MFs are nicer for investing specific dollar amounts. With ETFs you always end up with a few bucks leftover.Click to expand…
That’s the thing. Easier to rebalance. Easier for perfectionists.
LEVEL 1 WCI FORUM MEMBER.May 9, 2019 at 2:30 pm MST #213534