VTIAX vs VXUS

[Wayward]

I need to decide between VTIAX (Vanguard Total International Stock Index Fund Admiral Shares) or VXUS (Vanguard Total International Stock ETF). I've only used mutual funds before, mainly VTSAX and VGSLX but have some VTIAX in retirement accounts. I can no longer contribute to the IRAs and don't have any VTIAX in the brokerage account therefore I need to decide between VTIAX or VXUS.

I see many people bring up expense ratios, currently VTIAX is 0.09% vs VXUS 0.05%, but I never see any mention of the cost difference per share. VTIAX is only $33.72 per share vs VXUS at $62.70 per share. Obviously the advantage of ETFs is there is a $1 minimum compared to the $3,000 minimum for VTIAX. I wasn't really looking to invest $3,000 in one go (I can though), but that is a massive cost difference per share.

Am I missing something here? They track the same index and returns are very similar. Why do people buy the ETF version only to have nearly half the shares for the same amount of money invested?

Also, if anyone has good recommendations for safe places to stash cash with the best interest rates I'd love to hear them. I currently have Vanguard cash plus and some CDs/high yield savings accounts at Raisin.com.

Thank you :)

Edited to add: my main concern is dividends. More shares = higher dividends. So even though yes $3,000 of VTIAX is equal to $3000 of VXUS, in my mind having 88.9 shares of VTIAX vs 47.8 shares of VXUS would be a big deal in the amount of dividends being reinvested. Can anyone elaborate on that?

Edit 2: Okay, I realized the dividend payouts for VTIAX and VXUS are different, which compensates for the price difference! It was really driving me crazy.

VTIAX (2024 dividends)
$0.537000   12/23/2024   
$0.143100   09/23/2024
$0.256600   06/24/2024   
$0.117000   03/18/2024

VXUS (2024 dividends)
$1.004900   12/24/2024
$0.272300   09/24/2024
$0.483500   06/25/2024
$0.223500   03/20/2024

[Heckler]

Funds are not "shares" of a business, like a share of 3M or Ford is.

$3000 of VTIAX is worth $3000 and shows a 3.16% yield.

$3000 of VXUS is worth....   

$3000 and shows...

a 3.2% yield.

[the_gastropod]

As Heckler alluded to, the share prices are effectively arbitrary. VXUS and VTIAX are composed of the same exact 8,569 underlying stocks. Their performances will be identical.

The difference is the difference between holding a mutual fund vs an ETF. The most meaningful distinctions are:
1. After your initial $3,000 investment, you can invest any dollar amount you want into a mutual fund. In an ETF, you have to buy whole shares.
2. Mutual funds cannot be traded in the middle of the day. Their prices are evaluated after the market closes each trading day. ETF's can be traded like a normal stock—so if you're into that sort of thing, an ETF might be preferable.

But for most long-term investors, they're basically the same. I slightly prefer the mutual fund strategy just because it doesn't tempt me to do any intra-day trading nonsense. And it lets me just dump in exactly as much money as I want to without having to keep some weird remainder value back in cash.

[yachi]

These are the same index fund.  They both hold 8569 companies and are designed to track the FTSE Global All Cap ex US Index, which consists of 8348 companies.  One is structured as an ETF (Exchange Traded Fund) and the other is structured as a mutual fund.  So what you're really asking (or should be asking) is what's the difference between a mutual fund and an index fund.

There are several differences:

VTIAX (typical of all Vanguard Mutual Funds)
Available mainly through Vanguard accounts, and select brokerages and retirement accounts
Trades 1x per day, so you can't move in and out quickly
$3,000 minimum investment
Limits on getting back into the fund too soon if you sold out of it (maybe this is limited to my vanguard IRA, but I think it applies everywhere)
Always trades at NAV (net asset value) currently it's $33.72 as of 03/12/2025

VXUS (typical of all Vanguard Exchange Traded Funds)
Available from almost any brokerage account (just like a US-listed stock)
Trades continuously whenever the market is open
Minimum investment set by your broker.  Sometimes $1 as you mentioned
No limits on trading in and out, so suitable for traders looking to temporarily keep money
Trades at Market price, which is $62.81 as of 03/12/2025 vs its NAV of $62.70 as of 03/12/2025


You're right that the ETF has the lower expense ratio of these two, and I don't know a good reason for that.  I would have expected the Regular fund to have a lower expense ratio.

The $33.72 vs $62.70 is just due to how they split up the shares, like cutting the pizza into 6 or 8 slices, it doesn't really matter.  But the $62.81 vs $62.70 does matter.  The ETF can trade at a premium or discount to the shares it holds because it trades based on supply and demand.  The regular mutual fund uses the closing price of the shares it holds to determine its price, and then sets its price at exactly the NAV.

[Heckler]

. Obviously the advantage of ETFs is there is a $1 minimum compared to the $3,000 minimum for VTIAX.

Unless Vanguard US has a different way to buy ETFs than I, the ETF minimum is 1 unit, not $1.  I can't buy fractional ETFs, but can buy fractional mutual funds (buy $3000 exactly, which is 88.968 units of VTIAX in your example).  VXUS ETF needs to be purchased in a multiple of $62.70 X number of units.

[Heckler]

I'm not going near raisin  dot com with even a cent, not even going to check it out.  Use a bank or brokerage.

[SilentC]

Neither … I buy low cost country-specific ETFs, with countries that have dividend withholding tax going in taxable accounts so I can claim a credit for foreign taxes paid, and countries with no withholding going in my IRAs. I skip the countries with very high withholding. I like the Franklin ones.

[MustacheAndaHalf]

Am I missing something here? They track the same index and returns are very similar. Why do people buy the ETF version only to have nearly half the shares for the same amount of money invested?

If you invest $3,000 and the fund or ETF grows 10%, you now have $3,300.  Doesn't matter how many shares.  When one share price is twice as high, that means you can buy half as many shares - but you have the same amount invested.

ETFs are more portable - if you move from Vanguard to Schwab, you can move VXUS to Vanguard and buy/sell for $0/share.  With mutual funds you can expect to pay $75 per trade, buying or selling.  Competing companies don't like to deal with each other's mutual funds.  But ETFs are traded on the markets exactly like stocks, so their costs are lower.

Also, if anyone has good recommendations for safe places to stash cash with the best interest rates I'd love to hear them. I currently have Vanguard cash plus and some CDs/high yield savings accounts at Raisin.com.

I haven't heard of Raisin before, but from these reviews I think it is less risky than other posters think.
https://www.trustpilot.com/review/raisin.com/en-us
https://www.fool.com/money/banks/reviews/raisin-review/

[Wayward]

Am I missing something here? They track the same index and returns are very similar. Why do people buy the ETF version only to have nearly half the shares for the same amount of money invested?

If you invest $3,000 and the fund or ETF grows 10%, you now have $3,300.  Doesn't matter how many shares.  When one share price is twice as high, that means you can buy half as many shares - but you have the same amount invested.

ETFs are more portable - if you move from Vanguard to Schwab, you can move VXUS to Vanguard and buy/sell for $0/share.  With mutual funds you can expect to pay $75 per trade, buying or selling.  Competing companies don't like to deal with each other's mutual funds.  But ETFs are traded on the markets exactly like stocks, so their costs are lower.

How many shares one has is an important factor for dividends, which is part of what I'm most concerned with along with growth. Even when the market was down, I was still getting great dividends with my mutual funds. So how I'm understanding it is I'll have half the shares of ETFs for the same amount invested, which means my dividends will be much lower.

Also, if anyone has good recommendations for safe places to stash cash with the best interest rates I'd love to hear them. I currently have Vanguard cash plus and some CDs/high yield savings accounts at Raisin.com.

I haven't heard of Raisin before, but from these reviews I think it is less risky than other posters think.
https://www.trustpilot.com/review/raisin.com/en-us
https://www.fool.com/money/banks/reviews/raisin-review/

Yeah I don't know why either. Raisin.com is just a platform that consoldates many choices for different banks for high yield savings accounts, CDs, money market funds, etc in one place. It allows for comparing rates at different banks, some of which you wouldn't have access to otherwise. Like Expedia for cash accounts. The bank(s) you pick that actually hold the money are FDIC insured. To each their own, I haven't had any issues.

[Heckler]

Yeah I don't know why either. Raisin.com is just a platform that consolidates many choices for different banks for high yield savings accounts, CDs, money market funds, etc in one place. I

Fair enough, just in this world of scams and spoofing sites, I'm a pretty cautious old man.

[neo von retorch]

I didn't see anyone mentioning it, so...

At least at Vanguard, mutual funds can be set up to have scheduled / recurring purchases. You cannot do that with the ETF.

https://investor.vanguard.com/investor-resources-education/etfs/etf-vs-mutual-fund

You can set up automatic investments and withdrawals into and out of mutual funds based on your preferences.

Ah, some of this has changed recently, though I think the "out" part might still be specific to mutual funds.

Effective January 2025, you can set up automatic investments (purchases) into your Vanguard ETF positions.

[ATtiny85]

How many shares one has is an important factor for dividends

Uh, no. Just no. (When comparing MF and ETF of same fund)

[MustacheAndaHalf]

Am I missing something here? They track the same index and returns are very similar. Why do people buy the ETF version only to have nearly half the shares for the same amount of money invested?

If you invest $3,000 and the fund or ETF grows 10%, you now have $3,300.  Doesn't matter how many shares.  When one share price is twice as high, that means you can buy half as many shares - but you have the same amount invested.

ETFs are more portable - if you move from Vanguard to Schwab, you can move VXUS to Vanguard and buy/sell for $0/share.  With mutual funds you can expect to pay $75 per trade, buying or selling.  Competing companies don't like to deal with each other's mutual funds.  But ETFs are traded on the markets exactly like stocks, so their costs are lower.

How many shares one has is an important factor for dividends, which is part of what I'm most concerned with along with growth. Even when the market was down, I was still getting great dividends with my mutual funds. So how I'm understanding it is I'll have half the shares of ETFs for the same amount invested, which means my dividends will be much lower.

You're wrong.  Look at the price per share of total U.S. market funds, and their dividend yield.

Vanguard Total Stock Market ETF (VTI) price $276.99/share with 30 day SEC yield of 1.19%
iShares Core S&P Total U.S. Stock Market ETF (ITOT) price $122.97/share with 30 day SEC yield of 1.20%

Their prices are more than 2x apart, but their dividends are the same percentage.

https://investor.vanguard.com/investment-products/etfs/profile/vti
https://www.ishares.com/us/products/239724/ishares-core-sp-total-us-stock-market-etf

[Heckler]

Funds are not "shares" of a business, like a share of 3M or Ford is.

$3000 of VTIAX is worth $3000 and shows a 3.16% yield.

$3000 of VXUS is worth....   

$3000 and shows...

a 3.2% yield.

And 3.16% - 3.2% of $3000 is $94.80 - $96.   Call it $95.40 in distributions for your $3k, either way.

[Heckler]

Does VTIAX actually pay distributions?  Or does the mutual fund version automatically reinvest them?

[neo von retorch]

Does VTIAX actually pay distributions?  Or does the mutual fund version automatically reinvest them?

I think you still have to check a box if you want to reinvest, but it's been a while since I bought new shares. Though maybe in an IRA they don't give you a choice if you're not old enough to be making withdrawals? In a brokerage, it's still a choice.

[Heckler]

https://www.investopedia.com/terms/d/distribution-yield.asp

https://www.investopedia.com/terms/d/dividendyield.asp

Note the subtle difference. 

[Heckler]

[
Vanguard Total Stock Market ETF (VTI) price $276.99/share with 30 day SEC yield of 1.19%
iShares Core S&P Total U.S. Stock Market ETF (ITOT) price $122.97/share with 30 day SEC yield of 1.20%

Their prices are more than 2x apart, but their dividends are the same percentage.

https://investor.vanguard.com/investment-products/etfs/profile/vti
https://www.ishares.com/us/products/239724/ishares-core-sp-total-us-stock-market-etf

And their last distribution payouts, equally 2X apart:
VTI: $0.94 per share
ITOT: $0.47 per share

Your $3000 will buy twice as many ITOTs as VTI, but receive the same total distribution.

Although! I should add up all four distribution payouts for the whole year to be totally accurate.

[alittlelife]

Also, if anyone has good recommendations for safe places to stash cash with the best interest rates I'd love to hear them. I currently have Vanguard cash plus and some CDs/high yield savings accounts at Raisin.com.

I haven't heard of Raisin before, but from these reviews I think it is less risky than other posters think.
https://www.trustpilot.com/review/raisin.com/en-us
https://www.fool.com/money/banks/reviews/raisin-review/

Yeah I don't know why either. Raisin.com is just a platform that consoldates many choices for different banks for high yield savings accounts, CDs, money market funds, etc in one place. It allows for comparing rates at different banks, some of which you wouldn't have access to otherwise. Like Expedia for cash accounts. The bank(s) you pick that actually hold the money are FDIC insured. To each their own, I haven't had any issues.

Except if Expedia goes out of business the worst you lose is your travel receipts. I don't know anything about Raisin, but after hearing about what happened to Yotta's customers when Synapse collapsed, I have stayed far away from fintech banking.

https://www.cnbc.com/2024/11/22/synapse-bankruptcy-thousands-of-americans-see-their-savings-vanish.html