VTI vs. VTSAX

[LearningMustachian72]

Hi,

I am going to open a brokerage account.  I read a bit about VTI vs VTSAX and do not see any compelling reasons to favor VTSAX although I know it is considered the FI standard.

Anything I am missing?

[EvenSteven]

Hi,

I am going to open a brokerage account.  I read a bit about VTI vs VTSAX and do not see any compelling reasons to favor VTSAX although I know it is considered the FI standard.

Anything I am missing?

I consider them functionally equivalent, because none of the differences matter to my personal situation. You can review the differences between ETFs and mutual funds here:

https://www.bogleheads.org/wiki/ETFs_vs_mutual_funds

[terran]

Agreed. They're basically the same. ETFs are typically more tax efficient than mutual funds, but Vanguard has a patent that makes their ETF/mutual fund pairs like VTI/VTSAX exactly the same in this respect. Mutual funds let you place a purchase at any time and it goes through at the end of the next business day's price, so it can be a little easier in that respect since you don't have to worry the strange price fluctuations that mean you probably want to place ETF orders during the business day. ETFs are more portable to different brokerages since they trade commission free at most major brokerages while Vanguard mutual funds only trade for free at Vanguard and some at E*trade.

[MustacheAndaHalf]

Hi,

I am going to open a brokerage account.  I read a bit about VTI vs VTSAX and do not see any compelling reasons to favor VTSAX although I know it is considered the FI standard.

Anything I am missing?

A brokerage account at Vanguard?  If you're opening it anywhere else, do not buy VTSAX - it will cost you $20 to $75 every time you buy or sell.  Fidelity, Schwab and any other brokerage charges fees to buy mutual funds from other brokerages.

At Vanguard, VTSAX charges 0.04%/year expense ratio while VTI charges 0.03%.  They have the exact same contents.  I prefer VTI for knowing the exact price when I buy, but you can't do automatic investment like with VTSAX.  I forget the cutoff time (2pm?), but with VTSAX you decide to buy and then find out the price hours later.

[LearningMustachian72]

@MustacheAndaHalf I actually just invest using Robinhood on the side for fun but am going to start putting meaningful $ into VTI.  Any downside to Robinhood?  Personally like the simplicity.

[MustacheAndaHalf]

@MustacheAndaHalf I actually just invest using Robinhood on the side for fun but am going to start putting meaningful $ into VTI.  Any downside to Robinhood?  Personally like the simplicity.

I read that Robinhood doesn't offer mutual funds, so you probably can't buy VTSAX there.  Note at Robinhood your trading data is the product they sell to hedge funds.  In terms of how they make money, hedge funds are their clients.  I don't like that kind of conflict of interest.

For new investors, Vanguard offers a lot of safe choices.  Schwab tends to have better service.  Both of those and Fidelity all charge $0/trade.