Author Topic: Twice as many VTSAX or 1/2 as many VTI?  (Read 2549 times)

tdbat

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Twice as many VTSAX or 1/2 as many VTI?
« on: October 09, 2015, 02:56:15 PM »
Forgive me if there is no difference between my two options but I'd like to double check before pulling the trigger.

I recently rolled over two 401k's ($11k total) to Vanguard and I'm trying to figure out if there's any long-term advantage to buying VTSAX shares at ~$50 over VTI shares at ~$100. If I put the balance toward VTSAX, I'd have twice as many shares, but if the underlying funds are the same and VTI stays ~2x the cost in perpetuity, then there would be no difference.
Any insight would be appreciated.

DaveR

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Re: Twice as many VTSAX or 1/2 as many VTI?
« Reply #1 on: October 09, 2015, 05:07:20 PM »
One is a mutual fund, one is an ETF...two different animals. That said, the two will pretty much move in lock-step. The price per share and number of shares don't matter that much, it's the total value that you have. If you go to the bank and get $1,000 in cash, it doesn't matter if you get 10 $100 bills or 20 $50 bills, it's the same amount of money.

There is a VTSAX vs VTI discussion over at Bogleheads if you are interested: https://www.bogleheads.org/forum/viewtopic.php?t=116581

Kriegsspiel

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Re: Twice as many VTSAX or 1/2 as many VTI?
« Reply #2 on: October 09, 2015, 05:55:30 PM »
If you buy the mutual fund, you can place orders outside of trading hours, which might be convenient and hassle free. If you buy the ETF, you can buy it during trading hours, which might let you buy it at a lower-than-closing price.

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Re: Twice as many VTSAX or 1/2 as many VTI?
« Reply #3 on: October 09, 2015, 06:01:18 PM »
you can place orders for etf outside of trading hours as well... they just wont be acted on right away. but mututal funds dont buy,sell on demand either but are held until their set buy/sale time

for whatever reason, i started with etfs and stuck with them. been happy with it so no desire to switch. just pick one and stick with it?
« Last Edit: October 09, 2015, 06:07:48 PM by eyem »

seattlecyclone

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Re: Twice as many VTSAX or 1/2 as many VTI?
« Reply #4 on: October 09, 2015, 06:17:25 PM »
The share price is largely arbitrary. You're getting the same thing investing $10k in VTSAX as you are with VTI.

tdbat

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Re: Twice as many VTSAX or 1/2 as many VTI?
« Reply #5 on: October 10, 2015, 05:24:41 AM »
Thank you all. It seems that I can't go wrong with either one. I had a Roth 401k but my employer contributions were non-Roth so the money is in 2 different Brokerage accounts, which makes me think it will be better to buy VTI rather than wait until I can get enough money in the Roth account for VTSAX.

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Re: Twice as many VTSAX or 1/2 as many VTI?
« Reply #6 on: October 10, 2015, 05:56:33 AM »
with the mutual fund if it is through vanguard, they auto upgrade it to the admiral shares once you hit $10k

etf version doesn't... but the ER is already at the same level so it doesn't matter.

Jack

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Re: Twice as many VTSAX or 1/2 as many VTI?
« Reply #7 on: October 10, 2015, 07:10:01 AM »
with the mutual fund if it is through vanguard, they auto upgrade it to the admiral shares once you hit $10k

etf version doesn't... but the ER is already at the same level so it doesn't matter.

This is a good point: VTI vs. VTSAX is a wash, but VTI has lower expenses than VTSMX. If you have less than $10k to invest, go for the ETF.