The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: whitetailugys on April 29, 2016, 07:28:07 PM
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What is the difference between VTI vs VTSAX?
What is the difference between an EFT and an Index Fund?
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See
What is the difference between exchange-traded funds and mutual funds? (http://www.investopedia.com/ask/answers/09/mutual-fund-etf.asp)
and
Vanguard - Investment products (https://investor.vanguard.com/investing/investment-products)
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No links involed-- one allows fractional share and charges less-- end of report
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They hold the same underlying stocks in the same ratios. The expense ratios are the same.
The main difference is that you buy the ETF like a stock: with real-time bidding throughout the trading day. You buy the mutual fund version for a set price based on the value of the assets in the fund at the end of the trading day.
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They hold the same underlying stocks in the same ratios. The expense ratios are the same.
The main difference is that you buy the ETF like a stock: with real-time bidding throughout the trading day. You buy the mutual fund version for a set price based on the value of the assets in the fund at the end of the trading day.
My bad, one allows fractional shares-- end of report
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With the ETF (VTI), there is a bid / ask spread. That is, you pay a little bit more than it is worth when you buy.
With the mutual fund (VTSAX), you pay the asking price at the end of the trading day. No bid / ask spread.
That is my understanding, but I've never actually bought an ETF (for reasons mentioned above).
It remains true that Vanguard tends to charge the same expense ratio for the ETF as the equivalent admiral fund. Investor shares of the mutual fund are more expensive, so that is a strike against the mutual fund if you have limited funds to invest.
Best,
PoF