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Learning, Sharing, and Teaching => Investor Alley => Topic started by: fep on October 16, 2012, 08:26:57 PM

Title: Vanguard ETF vs Admiral Shares
Post by: fep on October 16, 2012, 08:26:57 PM

Wondering what are the main difference between the Vanguard AdmiralShares version and the ETF version of a fund.
For example, VTI vs VTSAX... they both have a 0.06% expense ratio... so why one or the other ?

Title: Re: Vanguard ETF vs Admiral Shares
Post by: sheepstache on October 17, 2012, 12:57:33 PM

From a consumer standpoint:

There's the fact that the ETF requires a brokerage account and you would be charged commissions on trades.  A Vanguard brokerage account will let you trade them for free but if you've got <$50,000 in assets with them it's a $20 annual fee.  (Mutual fund annual fees are waived if you have electronic-only statements.)

There's the fact that ETFs must be bought and sold in units; you can't just trade a random dollar amount, it has to be greater than and divisible by the individual share price.

Some funds that have ETF equivalents can be converted directly into ETFs.

That's all I got but there's probably more.  There is also some question of hidden trading fees on mutual funds and whether these are allowed or not in ETFs.