VTI has better coverage of the total US stock market. Has historically done well. VOO has a lower 5-year return than VTSAX (13.44% vs 13.65%). VTWAX attempts to be both a VTSAX and an international stock index. S&P 500 represents about 80% of the Total Market Index. The numbers aren’t perfect, because everyone’s tax situation is a little bit different and Morningstar assumes that the investor is in the highest tax bracket when calculating the after-tax returns. Similarities between VTI and VTSAX 1. Offers diversified exposure to US large-, medium- and small-cap stocks; 2. Below is the comparison between VOO and VTSAX. VTI are generally considered more tax-effective than VTSAX. 10. Check your inbox or spam folder to confirm your subscription. 9. The answer is simple: tax efficiency. I don’t consider something like VTSAX alone as being diversified enough, personally. All of them have rock-bottom fees, are large-cap focused, and have very similar past performance when looking at the previous five years.. This is partly because of their higher fees in paying staff to actively manage the funds. 15. View Entire Discussion (3 Comments) More posts from the personalfinance community. 1) Having maxed out all tax-advantaged accounts, we are now sending money to taxable account at Vanguard. Year-to-date, VTI has gained 11.37%, versus a 11.90% rise in the benchmark S&P 500 index during the same period. That means the post-tax return will be 0.17 percentage points higher on average for VTI vs. VTSMX. If you want to be exacting with your price execution and want the intraday flexibility of stock trading, VTI may be more appropriate for you than VTSAX. Also, we have no idea what the future will look like for VTI–and whether US stocks are overvalued at this point. Great breakdown! Vanguard’s mutual funds are structured like ETFs from a tax perspective, so you can use either a total stock market index fund (e.g. The Vanguard Total Stock Market ETF is the ETF alternative to the world's largest mutual fund, VTSAX. It’s available as an ETF (VT). Both SCHB and VTI don’t have a minimum investment requirement. Our recommendation–invest in VTI (vs. VTSMX) using a low-cost/no-cost brokerage (such as Robinhood or Vanguard for Vanguard funds). In fact, you can even choose an option to automatically deduct from your bank account every month. With the lowering of the minimum to just $3K for VTSAX, Vanguard converted VTSMX holders to VTSAX for free. ETFs are more tax efficient than mutual funds. It’s also because most investors simply can’t beat the market over the long term. VTI is not more tax-efficient than VTSAX. The funds are almost exactly identical yet VTSAX is more volatile and still is able to achieve a higher return. 7. That means the post-tax return will be 0.21 percentage points higher on average for VTI vs. VTSAX. This Fidelity vs. Vanguard comparison can help you choose between two of the best online brokers. After a few failures in hand-picking individual stocks, imagine my surprise to find I could buy the total US stock market! Keep an eye out for transaction fees if you’re buying mutual funds in other brokerage accounts. So if the article got that wrong I would assume everything is wrong. VTSAX has a higher 5-year return than VTI (13.65% vs 13.46%). Two of the most popular index funds for the total US stock market are: Both index funds include a portion of all US public companies (as of writing, 3,529 of them). The mental weight of making such decisions is probably greater than any minor tax difference 😉, “VIGAX is one of Vanguard’s strongest performers, with a 10-year trailing return of 16.77%. Morningstar’s Tax Efficiency Comparison. Hypothetically, the zero expense ratio could mean higher returns for investors over the years. Tesla instead of P&G) – Expense ratios are nearly the same – VIGAX is a good bit smaller ($126B vs $921B), but still a very large fund – VTSAX is significantly more diversified (3590 companies represented instead of 257) – VIGAX is pretty tilted to its top 10 holdings (47% vs 23.7%). Hope that’s helpful! I dove deep into each total market fund to uncover the differences (and identify the pros and cons). VTSAX has a higher expense ratio than VTI (0.04% vs 0.03%). VTI (Total stock market ETF): 0.03%, versus VTSAX (Admiral shares fund) at 0.04%. For example, VTI is 33% more expensive than SWTSX, ITOT and SPTM. Thanks for your kind email—and of course a good question here in your comment! I don’t find myself collecting too many things these days, except for the occasional piece of nostalgia from childhood here or there. Let’s get on to the comparison of Vanguard’s VTSAX vs VTI. But, it’s still really heavily weighted in North America. VTSAX is a mutual fund, whereas VTI is an ETF. What is VTI’s risk profile? The tool pops out a couple of ETF suggestions (from both the same fund category and overall) that have historically had a higher expense adjusted return and lower volatility (i.e., risk). SWSTX’s dividends pay annually while VTSAX pays quarterly. There is a large variety of alternatives to Vanguard’s total US stock market mutual fund. Should I choose VTI or VTSAX? VTSAX is a mutual fund, whereas VOO is an ETF. There’s a little less choice for ETFs. ), VTI: a Vanguard Exchange-Traded Fund (ETF), $10,000 invested $26.08/share = 383.43 shares, $10,000 invested $53.59/share = 186.60 shares, Dividends, capital gains over the decade: $3,812.05. Before reviewing comparable options to VTSAX from other banks, let’s run through a few VTSAX vs VTI frequently asked questions as a little review. VTSMX has a minimum investment requirement of $3,000. In terms of coverage, the two ETFs are comparable. VTI pays a quarterly dividend. Vanguard Total Stock Market Index (): If you're looking for a great core holding that's well-diversified and tax-efficient, you can't get much better than VTSMX.Although this fund is not the most tax-efficient in the Vanguard fund lineup, and it's not open to new investors, you can expect VTSMX to edge out Vanguard 500 Index (VFINX) for better tax … Conclusion. VTI vs. VOO: The Indexes. Should I choose VTI or SPY? Although VIGAX and VTSAX are not the same types of funds, they have similarities. Investors have since figured out that actively managed funds tend to lose to the underlying index they’re trying to compete with.

Both VTSAX and VTSMX are mutual funds. 5. However, Vanguard’s patented heartbeat trading system allows them to treat the ETF as a share class of an identical mutual fund, VTSAX in this case. VTSAX is an Admiral Shares version of the mutual fund tracking the Total Market Index. Vanguard Total Stock Market ETF (VTI) is the ETF version of the world's largest mutual fund, VTSAX.. VOO expense ratio is 0.03%, which is considered low. VOO has a lower expense ratio than VTSAX (0.03% vs 0.04%). VTI has a 7.97 percent compound annual growth rate ( CAGR) compared to VTSAX’s 7.95 percent growth rate. You should expect higher performance of more volatile funds, because they are riskier. With an expense ratio of 0.04 percent and exposure to more than 3500 stocks, it makes a solid core holding for a diversified mutual fund portfolio. Thus, VTSAX comes out ahead by $131. The bid-ask is a problem if you trade frequently. However, you can wind up with fractional shares due to Dividend Reinvestment Plans (DRIPs). VTI currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #3 of 118 ETFs in the Large Cap Blend ETFs category. In other words, if you’re happy with the way the fund is built, understand the fund’s goals, grasp the related costs of operating the fund, and still want to pour your earnings into—I think you’re good to go. For example, VTI is 33% more expensive than SWTSX, ITOT and SPTM. Plus I already hold some VTSAX in taxable so it seems cleaner/simpler to stick with it. That way you can make the best decision for your future as you strive for financial independence. The fund, as of April 30, 2020, has $822.4 billion under management. Moreover, there are a few US tax traps which make investing in US funds unattractive for some European investors. A low fee and a reasonably representative portfolio make the fund well-positioned to do well in the future. 16. If you already have an account with one of the large investment houses, it’s probably best to purchase their VTSAX clone fund rather than pay fees to own Vanguard’s or open an account at Vanguard. The cost ratio for VTSAX is also 0.01 percent higher than for VTI. But be careful–do your diligence before investing in those funds. Historical returns for VTI and SCHB are very comparable. From Proj Omni: The Vanguard Total Stock Market ETF (ETF:VTI) offers investors diversified exposure to the US stock market. VTI is not more tax-efficient than VTSAX. Curious what folks think I should do. I was researching Vanguard's Total Stock Market Fund and found it listed as VTSAX at $72/share and VTI at 149/share. VTSAX is might be more convenient for automatic investments and dividend / capital gain re-investments, because it’s a mutual fund. So, what’s the difference in VTSAX vs VTI? VTI is not more tax-efficient than VTSAX. #1. VTSAX is a mutual fund, whereas VOO is an ETF. Using the M* tax cost ratio, VTCLX seems to be a bit lower = better (0.66 vs 0.73), suggesting its post-tax return will be better. If you’re planning to retire early and intend to live off dividends, that schedule might matter to you. VTSAX Fees vs VFIAX Fees No purchase fees, redemption fees, nor 12b-1 fees apply to either VTSAX or VFIAX fund purchases and holdings. What is the VTI yield? Ultimately, FZROX and VTSAX should perform almost identically–I wouldn’t fret too much if buying one vs the other means having to open a different brokerage account or pay transaction fees. The 3. VTSAX vs VTI vs VOO Comparison. VTI … VTI annual turnover is 4%, as opposed to the average of 58% for large-cap ETFs. VTI tax-cost ratio is 0.49%. If you have a Fidelity investing account, there’s no great reason to make any extra effort to obtain VTSAX instead of FSKAX. Your email address will not be published. SCHB expense ratio is lower than VTI’s: 0.03% (vs. 0.04% for VTI). Stick with what’s easy and least expensive to execute. VTI and VTSAX have the same expense ratio: 0.04%. The only difference between VTI and VTSAX is how you buy it. It’s *really* hard to just do nothing to your investments and let them ride for many years and often, decades. Some important comparison metrics here are expense ratio, issuer, AUM, and shares outstanding, What is VOO tax efficiency (tax-cost ratio)? Below is the comparison between VTSAX and … Tax implications, transaction fees, and the ease of access to either fund should play a greater role than any performance difference between VTSAX and VTI. I found VTSAX simpler, so that’s what I went with. The primary difference between an ETF vs stock is that an ETF is a group of securities. SCHZ (U.S. One key difference between FZROX vs VTSAX is that FZROX doesn’t own the entire US stock market like VTSAX does, though it attempts to emulate the same results. 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