Author Topic: Investor Shares, Admiral Shares, ETF differences?  (Read 1397 times)

Radioherd88

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Investor Shares, Admiral Shares, ETF differences?
« on: August 24, 2017, 08:50:11 PM »
Hi All,

Pretty new to the investing thing, but planning to start putting money into a total stock market/S & P 500 fund in the next few weeks - i keep stumbling between the investor/admiral/ETF funds and despite comparing them (even on the vanguard comparison tool), can't quite figure out what the difference is?

https://personal.vanguard.com/us/funds/snapshot?FundId=0085&FundIntExt=INT#tab=3
https://personal.vanguard.com/us/funds/snapshot?FundId=0970&FundIntExt=INT#tab=3
https://personal.vanguard.com/us/funds/snapshot?FundId=0585&FundIntExt=INT

The Investor shares has a higher fee at 0.15%, and all but the ETF have minimums, but why? What makes them better that they are worth the extra fee or minimum contributions? I assume they must be better than the no minimum ETF, but not sure why?

Thanks in advance!

extremedefense

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Re: Investor Shares, Admiral Shares, ETF differences?
« Reply #1 on: August 24, 2017, 08:52:56 PM »
ETF you can't buy dollar amounts, you have to buy whole shares. So instead of putting $100 every other week, if the price of one share is $250, you have to buy it per share.

Radioherd88

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Re: Investor Shares, Admiral Shares, ETF differences?
« Reply #2 on: August 24, 2017, 09:01:19 PM »
Ah - makes sense - is that such a bad thing? A little bit harder to plan for on a regular basis is all right?

 

extremedefense

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Re: Investor Shares, Admiral Shares, ETF differences?
« Reply #3 on: August 25, 2017, 06:28:30 AM »
For the lower expense ratio?

Oh, also there is the fact that you have to pay per trade ($6.95 for most brokers). But if your account is through Vanguard, there's no fee.

Or you can use Robin Hood or if you have $25k on a Merrill Edge account you get 30 free trades a month.

GenXbiker

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Re: Investor Shares, Admiral Shares, ETF differences?
« Reply #4 on: August 25, 2017, 06:29:41 AM »
i keep stumbling between the investor/admiral/ETF funds and despite comparing them (even on the vanguard comparison tool), can't quite figure out what the difference is?

I recommend you read this very recent thread which explains the differences.

https://forum.mrmoneymustache.com/welcome-to-the-forum/etf-or-index-fund-which-one/

And no, it's not such a bad thing to buy ETF shares.  I do more with ETFs these days, as per the thread I linked to.

Radioherd88

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Re: Investor Shares, Admiral Shares, ETF differences?
« Reply #5 on: September 04, 2017, 04:06:07 PM »
i keep stumbling between the investor/admiral/ETF funds and despite comparing them (even on the vanguard comparison tool), can't quite figure out what the difference is?

I recommend you read this very recent thread which explains the differences.

https://forum.mrmoneymustache.com/welcome-to-the-forum/etf-or-index-fund-which-one/

And no, it's not such a bad thing to buy ETF shares.  I do more with ETFs these days, as per the thread I linked to.

Thanks - good thread - I think I am mostly ok with ETF versus Index Fund, so the other part of my question was in the "investor" versus "admiral" shares - is there a specific advantage to one over the other?

secondcor521

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Re: Investor Shares, Admiral Shares, ETF differences?
« Reply #6 on: September 04, 2017, 04:12:20 PM »
You can buy admiral shares if you have enough invested with Vanguard ($50K?) or enough invested in that fund ($10K?).  In return, they reward you with a lower expense ratio.  Other that the expense ratio, the funds are identical.

Vanguard will automatically convert you from investor shares to admiral shares shortly after you reach the threshold.  This conversion is a tax free event, meaning you won't owe any capital gains taxes on the conversion even if the shares are held in a taxable account.
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GenXbiker

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Re: Investor Shares, Admiral Shares, ETF differences?
« Reply #7 on: September 04, 2017, 07:01:37 PM »
i keep stumbling between the investor/admiral/ETF funds and despite comparing them (even on the vanguard comparison tool), can't quite figure out what the difference is?

I recommend you read this very recent thread which explains the differences.

https://forum.mrmoneymustache.com/welcome-to-the-forum/etf-or-index-fund-which-one/

And no, it's not such a bad thing to buy ETF shares.  I do more with ETFs these days, as per the thread I linked to.

Thanks - good thread - I think I am mostly ok with ETF versus Index Fund, so the other part of my question was in the "investor" versus "admiral" shares - is there a specific advantage to one over the other?

Admiral shares were discussed some in the other thread.

If you go with ETFs, then Admiral shares will not be relevant, because they are for mutual funds.  You have to qualify independently for Admiral shares on a fund by fund basis, with some index funds having a minimum as low as $10,000.  I have some Admiral shares for mutual funds, but not all of them, and I've invested mostly in ETFs in recent years, where Admiral shares don't come into play.  Some of my ETFs have the same expense ratio as the equivalent Admiral shares mutual fund, while the Investor shares fund has a higher expense ratio.