Author Topic: ETF vs MF or VTI vs VTSAX  (Read 2830 times)

bigwhitedawg

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ETF vs MF or VTI vs VTSAX
« on: March 02, 2016, 02:18:00 PM »
We're working on accumulation and stache growth.  I've seen recommendations for both the ETF and the MF version of holding the whole US stock market (and the bond, etc) however, I haven't seen any good information describing any differences or advantages/disadvantages to either vehicle.  If we're looking at holding 3 major assets (US stock, bond, INT stock) is there a reason to be ETF over MF or vice versa?

Thanks,
Stacheing in Austin

nobodyspecial

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Re: ETF vs MF or VTI vs VTSAX
« Reply #1 on: March 02, 2016, 02:37:58 PM »
Can buy the MF version of Vanguard funds if you aren't in the US?

capitalninja

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Re: ETF vs MF or VTI vs VTSAX
« Reply #2 on: March 02, 2016, 02:47:07 PM »
Assuming you're considering Vanguard MF/ETFs once you get above 10k in each holding there's no difference from a fee perspective.

Mutual Funds have the advantage in that you can put your Vanguard investing on 100% automagic. With mutual funds you can have money pulled out of your bank account at intervals you want and have those funds automatically invested.

With ETFs you'll have to login and make the purchases yourself each time. So it really boils down to if you want a hands on or hands/off approach to your investing.

For most people I that plan to invest regularly I tend to recommend the mutual funds because of the ease of use. Having your investments done automatically ensures that they'll actually happen.

Hope this helps.

Allen

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Re: ETF vs MF or VTI vs VTSAX
« Reply #3 on: March 02, 2016, 06:35:14 PM »
A disadvantage of ETFs is they reprice in real time.  The mutual funds only update to the new price once a day. 

That helps discourage compulsive net worth checking.

The MU is better >$10k I think.

bigwhitedawg

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Re: ETF vs MF or VTI vs VTSAX
« Reply #4 on: March 03, 2016, 04:03:07 PM »
Can buy the MF version of Vanguard funds if you aren't in the US?

This is information I don't have.  Although many in Texas consider it separate from the US, the rest of the US doesn't, so we still get the privilege of occasionally acting American.  :)

bigwhitedawg

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Re: ETF vs MF or VTI vs VTSAX
« Reply #5 on: March 03, 2016, 04:05:28 PM »
Assuming you're considering Vanguard MF/ETFs once you get above 10k in each holding there's no difference from a fee perspective.

Mutual Funds have the advantage in that you can put your Vanguard investing on 100% automagic. With mutual funds you can have money pulled out of your bank account at intervals you want and have those funds automatically invested.

With ETFs you'll have to login and make the purchases yourself each time. So it really boils down to if you want a hands on or hands/off approach to your investing.

For most people I that plan to invest regularly I tend to recommend the mutual funds because of the ease of use. Having your investments done automatically ensures that they'll actually happen.

Hope this helps.

Thanks.  Are you saying Vanguard will auto-rebalance if I go down the MF route?

nobodyspecial

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Re: ETF vs MF or VTI vs VTSAX
« Reply #6 on: March 03, 2016, 07:04:14 PM »
Can buy the MF version of Vanguard funds if you aren't in the US?

This is information I don't have.  Although many in Texas consider it separate from the US, the rest of the US doesn't, so we still get the privilege of occasionally acting American.  :)

Sorry I read it as Stacheing in Austria ;-)

MustacheAndaHalf

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Re: ETF vs MF or VTI vs VTSAX
« Reply #7 on: March 03, 2016, 08:12:44 PM »
Mutual funds are simpler - your buy/sell order happens upon the close of the stock market, at the closing price.  A disadvantage is that when you want to sell one fund and buy another, you need to wait 1-2 days between the transactions (close of market, funds settle, buy at close of another day).

I like ETF flexibility for rebalancing.  For example, selling VTI then immediately buying VXUS.  The "unsettled funds" from one sale can be used to buy ETFs in another sale immediately.

But the bigger problem is indecision.  Most people in this thread are saying mutual funds, so I'd echo that opinion.  Go with mutual funds just to get started.  The difference between ETF and mutual funds matters far less than getting started.