Author Topic: VTI vs VTSMX - for my HSA  (Read 3309 times)

daveydinner

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VTI vs VTSMX - for my HSA
« on: August 21, 2014, 10:47:54 AM »
I have about $7k in my HSA which allows me to invest via TD Ameritrade brokerage online. Most all of it is already in VTSMX.
Since finding MMM, I've started Maxing it.

Question: Should I move it all over to VTI - Vanguard's sister ETF?

VTI says expense ratio is 0.05% "Commission Free"
VTSMX says 0.17% and is "No Load"

Seems like VTI is the better deal if the expense is less, but holds the same total market. Or am I missing something?

I'll be investing in chunks of $500 - $1000 between my contributions and my employers. Moving the money over from the HSA   every few paychecks.

I searched for this topic and found an older thread that didn't quite answer my question.

MooseOutFront

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Re: VTI vs VTSMX - for my HSA
« Reply #1 on: August 21, 2014, 11:20:44 AM »
The only advantage I see would be if the investments in the mutual fund could be automated.  Otherwise, yeah I'm going with VTI here.  (or maybe VT (total world), ideally I would go about 60/40 in VTI/VXUS, but annoyingly TDAmeritrade doesn't offer VXUS (total international) for free in their brokerage account)

Left

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Re: VTI vs VTSMX - for my HSA
« Reply #2 on: August 21, 2014, 06:28:35 PM »
I like vti because I can use the dividends to invest in other funds (I have it going to vti currently, but if I want to rebalance, it's easier than selling shares since I can redirect dividends to buy the other ones I want to go to

mutual funds reinvest in themselves so I can't rebalance this way

nordlead

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Re: VTI vs VTSMX - for my HSA
« Reply #3 on: August 22, 2014, 09:34:48 AM »
I like vti because I can use the dividends to invest in other funds (I have it going to vti currently, but if I want to rebalance, it's easier than selling shares since I can redirect dividends to buy the other ones I want to go to

mutual funds reinvest in themselves so I can't rebalance this way
On my vanguard page it says I can reinvest the dividends/capital gains from VTSAX to any fund I have open in any account. So, this is probably brokerage dependent.

Pros of mutual funds
* can buy fractional shares (not always possible with ETFs)
* "easier" (no buy/ask spread to understand, you just buy $X at the NAV at the end of the day)
Pros of ETFs
* can buy/sell any time during the day.
* typically cheaper if you don't have access to admiral/institutional shares

So, VTI if you can buy fractional shares, otherwise I'd stick with VTSMX just for the simplicity of buying by $ amount. Or maybe a combination of both. Use VTSMX to hold your incoming cash (so it all gets invested) and then every quarter/year move over to VTI whatever you can.