VTSAX vs VTI.
VTSAX gets mentioned quite a lot, while I do not see much about VTI. For our intents and purposes they appear to be basically the same product. VTI has a lower expense ratio. Why is VTSAX favored; tax advantage?
They are different share classes of the same investment so for all intents and purposes they basically are the same product.
Differences: ETF vs Mutual fund.
Mutual funds trade at the end of the day, don't have a bid-ask spread to worry about, and allow for automatic investments(like automatic contributions).
ETFs trade nearly instantly allowing for intra-day trading, but they have a bid-ask spread to worry about.
Tax efficiency= Across most of the industry ETFs are more tax efficient than mutual funds. Vanguard is the exception to this rule, they have a patent on a process to allow the mutual funds and ETFs to work together for ideal tax efficiency. All of the share classes of Vanguard Total Stock are treated as 1 investment when tracking internal unrealized capital gains, but Vanguard can choose which fund to distribute gains out of. Instead of distributing a capital gain to VTSAX and creating a taxable event, Vanguard can distribute gains to the 401(k) version of Total stock(capital gain distributions are meaningless in a 401(k) plan), and they can use highly appreciated shares of stocks when building new ETF units(where those shares can stay for eternity). In short, VTSAX is very tax efficient, so far just as tax efficient as VTI.
Difference: VTI costs 0.01% less, but it has a bid-ask spread to worry about. The bid-ask is a problem if you trade frequently. If you plan on buying the fund and holding forever, VTI is likely better due to the lower cost.