Any benefit of mutual fund vs VTI shares?

[darknight]

Is there any benefit investing via a mutual fund vs just purchasing shares of VTI? Any other good taxable account investment selections to look at on the vanguard website - I'm looking at opening a vanguard account or if possible just invest with just share through my normal "trading/banking" app

Thank you in advance

[Sandi_k]

Nope - in fact, it's the opposite.

1) VTI doesn't have the typical mutual fund $3k minimum that VTSAX has to start.

2) ETFs in taxable accounts are much more tax efficient, and don't come with potential huge tax surprises when the fund manager swaps out companies to stay aligned with its Index. (Vanguard funds, owned at Vanguard are an exception to this rule - but I'd still prefer ETFs over a mutual fund in my taxable accounts).

[jim555]

The mutual fund has restrictions on frequent trading, whereas the ETF doesn't. 

[darknight]

Thank you, much appreciated.

[neo von retorch]

There is one benefit to mutual funds over the equivalent ETF, and that is the ability to schedule recurring, automatic purchases.

[anni]

There is one benefit to mutual funds over the equivalent ETF, and that is the ability to schedule recurring, automatic purchases.

This seals it for me for mutual funds over ETF. I am forgetful.

[slugsworth]

There is one benefit to mutual funds over the equivalent ETF, and that is the ability to schedule recurring, automatic purchases.

This seals it for me for mutual funds over ETF. I am forgetful.

This is not accurate information as it pertains to vanguard mutual funds. Vanguard actually has a patent on it (that expires next year).

I appreciate being able to automate the purchase of vtsax rather than the multi-step process for vti.

[PDXTabs]

ETFs are also easy to transfer in kind to someone else (like a child) while preserving cost basis. Is that even possible with mutual funds?

[EvenSteven]

There is one benefit to mutual funds over the equivalent ETF, and that is the ability to schedule recurring, automatic purchases.

This seals it for me for mutual funds over ETF. I am forgetful.

This is not accurate information as it pertains to vanguard mutual funds. Vanguard actually has a patent on it (that expires next year).

I appreciate being able to automate the purchase of vtsax rather than the multi-step process for vti.

Are you sure about that, looks like you can do automatic investments into your Fidelity account just fine: https://www.fidelity.com/learning-center/personal-finance/automate-savings

ETFs are also easy to transfer in kind to someone else (like a child) while preserving cost basis. Is that even possible with mutual funds?

Yep, mutual funds can be transferred in kind. ETFs are easier to switch brokerage companies with, though.

[slugsworth]

Are you sure about that, looks like you can do automatic investments into your Fidelity account just fine: https://www.fidelity.com/learning-center/personal-finance/automate-savings

I don't have an account with fidelity, but with the two brokerages I've used I could transfer the cash but couldn't automate the purchases or ETF's but could automate mutual funds.

[EvenSteven]

Are you sure about that, looks like you can do automatic investments into your Fidelity account just fine: https://www.fidelity.com/learning-center/personal-finance/automate-savings

I don't have an account with fidelity, but with the two brokerages I've used I could transfer the cash but couldn't automate the purchases or ETF's but could automate mutual funds.

I guess I'm confused. Yes to automation with mutual funds everywhere, no to automation with ETFs everywhere is what @neo von retorch  (and I) said is the case, but you are saying is false info.

Are you saying at Vanguard you can do automatic purchases of ETFs?

[MustacheAndaHalf]

As much as I like ETF investing, I'm not aware of a way to automate it.  I think above is a misunderstanding, with everyone agreeing regular automatic investments are available for mutual funds.

ETFs are also easy to transfer in kind to someone else (like a child) while preserving cost basis. Is that even possible with mutual funds?

Yep, mutual funds can be transferred in kind. ETFs are easier to switch brokerage companies with, though.

Just a warning on that front, after being transferred mutual funds are very expensive to sell.  Where ETFs are sold by any broker on the stock market, with mutual funds you must go to the issuer.

Vanguard charges $20 to buy, and $20 to sell "non-transaction fee mutual funds":
https://investor.vanguard.com/client-benefits/brokerage-fees-commissions

Fidelity charges $50 per purchase, but $0 to sell:
https://www.fidelity.com/trading/commissions-margin-rates

Schwab charges "Up to $74.95 per purchase" for other mutual funds:
https://www.schwab.com/pricing

Those fees do not apply when buying Schwab's funds at Schwab, but do when someone at Schwab buys a Vanguard mutual fund.  (Although transfers are free... so you could transfer cash to Vanguard, buy mutual funds... then transfer that back to Schwab?)

[baconschteam]

Vanguard charges $20 to buy, and $20 to sell "non-transaction fee mutual funds":
https://investor.vanguard.com/client-benefits/brokerage-fees-commissions

I think what you've wrote here is false or misleading, maybe you meant to write "Transaction-Fee Mutual Funds"? Buying and selling any amount of VTSAX or VTI through Vanguard costs $0.