Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

In this Discussion

Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

    Support MFO

  • Donate through PayPal

ETF's versus Mutual funds

I own Vanguard Dividend growth fund which has performed well. Is there an advantage to purchase/swap the fund to Vanguards similar ETF? Thank you.

Comments

  • edited December 2014
    if it is not in retirement account...

    one would think you want to compare after tax performance of the etf vs the mutual fund you are looking at. assuming they have similar risk.

    I would think the one main disadvantage is when you sell mf, if there was any appreciation, the sale will result in you paying capital gains on the sale to buy something else.

    vanguard has a comparison feature on their site.

    the general advantage of etf's you can buy and sell them make frequent reading without penalties.
  • Let me clarify my question. The money is currently in an IRA, and I am not prone to trade often. I just want to keep my expenses down. Thanks
  • Ask yourself - why did you buy Vanguard Dividend Growth (VDIGX) instead of Vanguard Dividend Appreciation (VDAIX)? Has anything changed - why would you prefer the latter fund now to the former?

    That's the primary issue - which fund do you want? Only after answering that (or saying it's a toss up), should one go about thinking whether the way a fund is purchased makes a difference.

    VDAIX (Investor shares), VDADX (Admiral shares), VIG (ETF shares) - these are all just different classes of the same fund. The latter two have the same ER; the former two have the same method of purchase (at NAV at end of day, vs. during the day with a bid/ask spread and possibly commission).
  • No commissions, lower expenses, buy and sell at YOUR price....I can think of no other benefits to ETF s over Mutual Funds ....but give me a few minutes
  • The expenses of VDADX and VIG are identical. AFAIK, there's no commission on VDADX anywhere it is sold.

    Place a limit order and you may not buy and sell at all, let alone at your price. Place a market order and you'll lose on the bid/ask spread.

    Then there's tracking error - to the underlying portfolio's tracking error the ETF adds premium/discount (small but nonzero).
  • I've been shut out of many limit orders, because my prices were not met, my regret level is always the same...."0"
Sign In or Register to comment.