Author Topic: Comparing SWTSX vs VTSMX  (Read 6777 times)

Spivey

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Comparing SWTSX vs VTSMX
« on: May 20, 2015, 09:31:49 AM »
Where can I compare the total growth (including dividend reinvestment) of SWTSX versus VTSMX? When looking at Google Finance, why is the dividend of SWTSX so low for 2013 and 2014? In general, does it matter that SWTSX pays an annual dividend when compared to the quarterly dividend paid by VTSMX?

Edit: Changed VFINX to VTSMX
« Last Edit: May 20, 2015, 10:29:52 AM by Spivey »

nereo

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Re: Comparing SWTSX vs VFINX
« Reply #1 on: May 20, 2015, 09:43:54 AM »
Where can I compare the total growth (including dividend reinvestment) of SWTSX versus VFINX? When looking at Google Finance, why is the dividend of SWTSX so low for 2013 and 2014? In general, does it matter that SWTSX pays an annual dividend when compared to the quarterly dividend paid by VFINX?
First, why are you comparing Scwabb's total market index against Vanguard's SP500 index?  Why not compare two from the same company (e.g. VFINX and VTSMX).  That will allow you to compare total growth fairly easily.  Here I'd favor Vanguard for their slightly lower fees.

The reason the divident is lower for the total market index is because there are fewer companies in that index offering dividends.  In general, smaller companies are less likely to offer dividends.  The SP500 (VFINX) is composed only of the largest 500 US traded companies.

No, it doesn't really matter whether a dividend is payed quarterly or yearly. 

skyrefuge

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Re: Comparing SWTSX vs VFINX
« Reply #2 on: May 20, 2015, 09:46:25 AM »
Morningstar is the tool you want (I already made the comparison for you at that link, and added VTSAX, which is a more-reasonable total-market fund to compare to than VFINX).

It looks like Google Finance's data is messed up, it's showing SWTSX's short-term capital gains distributions for 2013 and 2014 rather than the dividend distributions. Here are SWTSX's distributions from the source.

Annual vs. quarterly dividends don't really matter, as the Morningstar chart reveals.

Spivey

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Re: Comparing SWTSX vs VTSMX
« Reply #3 on: May 20, 2015, 10:37:43 AM »
Skyrefuge, does the Morningstar growth chart account for expenses?

nereo

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Re: Comparing SWTSX vs VTSMX
« Reply #4 on: May 20, 2015, 10:48:49 AM »
Skyrefuge, does the Morningstar growth chart account for expenses?
No - it's returns only (share appreciation + dividends reinvested).  So you will do very, very, very slightly better owning Vanguard's VTSAX which has an expense ratio that is 0.04% lower.

EDIT:  huh... looking at MorningStar's data it seems I was wrong.  Learn something new every day - thanks skyrefuge.
« Last Edit: May 20, 2015, 11:03:25 AM by nereo »

skyrefuge

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Re: Comparing SWTSX vs VTSMX
« Reply #5 on: May 20, 2015, 10:49:54 AM »
Skyrefuge, does the Morningstar growth chart account for expenses?

Yes. Mutual fund returns are always reported net of expenses (by the fund itself), so any third-party site reproducing that data will also show data that automatically accounts for expenses (that's why VTSAX (0.05% ER) slightly beats SWTSX (0.09% ER)).

However, this only includes expenses that directly affect the fund's returns, so other investor-costs like front-end loads or capital gains taxes are not (and cannot be) included in such charts.

skyrefuge

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Re: Comparing SWTSX vs VTSMX
« Reply #6 on: May 20, 2015, 11:06:54 AM »
Skyrefuge, does the Morningstar growth chart account for expenses?
No - it's returns only (share appreciation + dividends reinvested).

Incorrect. "Share appreciation" already includes the drag of expenses. The return of a particular mutual fund without its expenses included is something no one has any interest in seeing. Yes, it's good to know what the expenses are, but no one needs to see an expense-free return chart plotted, because no one can actually remove the expenses from a fund.

So you will do very, very, very slightly better owning Vanguard's VTSAX which has an expense ratio that is 0.04% lower.

Yes, and that's what exactly what the Morningstar chart (which includes expenses) shows.

Hopefully in the third round I'm fast enough to get my post in first!

MDM

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Re: Comparing SWTSX vs VTSMX
« Reply #7 on: May 20, 2015, 12:57:50 PM »
However, this only includes expenses that directly affect the fund's returns, so other investor-costs like front-end loads or capital gains taxes are not (and cannot be) included in such charts.
One can see load-adjusted post tax returns on the "Tax" tab of the Morningstar report - but apparently not charted.