Fund Comparison

The Vanguard Large-Cap Index Fund (Admiral Shares) (symbol VLCAX) and the Vanguard Large-Cap ETF (symbol VV) are two of the largest and most popular large-cap index funds. Some compare VLCAX vs VV not realizing that they are just two different share classes of the same portfolio.

A quick reminder that this site does NOT provide investment recommendations.

The Short Answer

VLCAX and VV are different share classes of the same portfolio. The decision to buy one or the other depends on investor-specific factors (some of which are listed below).

The Longer Answer

Vanguard ETFs are structured as share classes of their mutual funds. This is a patented structure that is scheduled to expire in 2023, so we may see this structure more frequently in the near future. In other words, VLCAX and VV are not two funds pursuing an identical strategy; they are the same fund!

Historical Performance: VLCAX vs VV

VV was launched on January 27, 2004, while VLCAX was launched a few days later on February 2, 2004. Since that time, performance has been identical: 9.31% vs 9.30% annually. Despite changes in fees and expenses over this time period, there is only about a half percent difference in cumulative performance since inception! Looking at the chart of VLCAX vs VV below, it is obvious that they are identical.

Differences Between VLCAX and VV

Since the two funds are actually two share classes of the same fund, I will skip the usual comparisons here. The geographic exposures, sector weights, market cap coverage so on is identical because the two funds are shares in the same portfolio. There are some resources on the internet indicating otherwise, but these are incorrect.

Factors to Consider

Transaction Costs

ETFs are free to trade at many brokers and custodians, including Vanguard. However, many brokers and custodians still charge commissions and/or transaction fees to buy/sell mutual funds. To my knowledge, Vanguard does not participate in the pay-to-play arrangements that would allow their mutual funds to trade for free on many platforms. So if an investor account is at Vanguard, it is free to trade VLCAX or VV. However, only VV is free to trade in non-Vanguard accounts.

There is a bid-ask spread when trading ETFs, but this spread is typically less than .04% for VV and individual investor trades will not generally be large enough to “move” the market. In the case of VV, individual investors should not have a problem trading.

Tax Efficiency & Capital Gain Distributions

ETFs are typically more tax-efficient than mutual funds, due to their ability to avoid realizing capital gains through like-kind redemptions (a process that is beyond the scope of this post). However, since Vanguard ETFs are a share class of their mutual funds, the mutual funds are able to benefit from this feature of the ETF. In other words, VV is able to extend its tax benefits to VLCAX.

VLCAX has never paid a capital gain distribution! I noticed some posts on the internet saying that VV is more tax-efficient than VLCAX, but this incorrect as neither fund has ever made a capital gains distribution.

Tax Loss Harvesting

My personal preference is to keep a portfolio entirely mutual funds or entirely ETFs, due to the mechanics of settlement during tax loss harvesting. If an ETF has declined in value and an investor sells it, the trade and cash proceeds will not settle for two business days (T+2). That investor may want to “replace” the sold ETF immediately and attempt to buy another ETF or mutual fund simultaneously.

However, mutual funds settle on T+1 basis, so cash for the mutual purchase would be due in one business day (which is one day earlier than the cash from the ETF sale is received). This can obviously cause problems and (even though this issue can be addressed with careful planning) I find it easier to keep accounts invested in similar vehicles. In this case, if a portfolio is all mutual funds, I might lean more towards VLCAX. If all ETFs, I might lean more towards VV.

On this topic, investors should probably avoid using these two funds as tax loss harvesting substitutes for one another since they would likely be considered “substantially identical.”

Tradability

VLCAX does have a stated minimum initial purchase of $3,000, so that may be a factor for some investors looking to initiate a position. The minimum purchase size for VV is typically one share, although fractional shares are becoming more common.

Investors can trade ETFs intraday, as well as in the pre-market and after-hours trading sessions. Investors can only buy/sell mutual funds once per day. This is not necessarily a major factor for long-term investors however.

Final Thoughts: VLCAX vs VV

VLCAX and VV are literally the same. However, investors should consider the above factors when deciding which one is best for them.

Further Reading

Investors curious about Vanguard’s small-cap funds may want to read our comparison of VSMAX vs VB.

The Vanguard Small-Cap Index Fund (Admiral Shares) (symbol VSMAX) and the Vanguard Small-Cap ETF (symbol VB) are two of the largest and most popular small-cap index funds. Some compare VSMAX vs VB not realizing that they are just two different share classes of the same portfolio.

A quick reminder that this site does NOT provide investment recommendations.

The Short Answer

VSMAX and VB are different share classes of the same portfolio. The decision to buy one or the other depends on investor-specific factors (some of which are listed below).

The Longer Answer

Vanguard ETFs are structured as share classes of their mutual funds. This is a patented structure that is scheduled to expire in 2023, so we may see this structure more frequently in the near future. In other words, VSMAX and VB are not two funds pursuing an identical strategy; they are the same fund!

Historical Performance: VSMAX vs VB

VSMAX was launched on November 13, 2000, while VB was launched a few years later on January 26, 2004. Since that time, performance has been identical: 9.14% vs 9.15% annually! Despite changes in fees and expenses over this time period, there has only been about a 1% difference in cumulative performance since inception! Looking at the chart of VSMAX vs VB below, it is obvious that they are identical.

Differences Between VSMAX and VB

Since the two funds are actually two share classes of the same fund, I will skip the usual comparisons here. The geographic exposures, sector weights, market cap coverage so on is identical because the two funds are shares in the same portfolio. There are some resources on the internet indicating otherwise, but these are incorrect.

Factors to Consider

Transaction Costs

ETFs are free to trade at many brokers and custodians, including Vanguard. However, many brokers and custodians still charge commissions and/or transaction fees to buy/sell mutual funds. To my knowledge, Vanguard does not participate in the pay-to-play arrangements that would allow their mutual funds to trade for free on many platforms. So if an investor account is at Vanguard, it is free to trade VSMAX or VB. However, only VB is free to trade in non-Vanguard accounts.

There is a bid-ask spread when trading ETFs, but this spread is typically less than .07% for VB and individual investor trades will not generally be large enough to “move” the market. In the case of VB, individual investors should not have a problem trading. Interestingly, the bid-ask spread of VB is more than the annualized performance difference of VSMAX vs VB.

Tax Efficiency & Capital Gain Distributions

ETFs are typically more tax-efficient than mutual funds, due to their ability to avoid realizing capital gains through like-kind redemptions (a process that is beyond the scope of this post). However, since Vanguard ETFs are a share class of their mutual funds, the mutual funds are able to benefit from this feature of the ETF. In other words, VB is able to extend its tax benefits to VSMAX.

VSMAX paid a capital gain distribution in 2000, but has not made any since then (nor do I expect it to make any in the future due to the existence of VB). I noticed some posts on the internet saying that VB is more tax-efficient than VSMAX, but this incorrect as neither fund has ever made a capital gains distribution.

Tax Loss Harvesting

My personal preference is to keep a portfolio entirely mutual funds or entirely ETFs, due to the mechanics of settlement during tax loss harvesting. If an ETF has declined in value and an investor sells it, the trade and cash proceeds will not settle for two business days (T+2). That investor may want to “replace” the sold ETF immediately and attempt to buy another ETF or mutual fund simultaneously.

However, mutual funds settle on T+1 basis, so cash for the mutual purchase would be due in one business day (which is one day earlier than the cash from the ETF sale is received). This can obviously cause problems and (even though this issue can be addressed with careful planning) I find it easier to keep accounts invested in similar vehicles. In this case, if a portfolio is all mutual funds, I might lean more towards VSMAX. If all ETFs, I might lean more towards VB.

On this topic, investors should probably avoid using these two funds as tax loss harvesting substitutes for one another since they would likely be considered “substantially identical.”

Tradability

VSMAX does have a stated minimum initial purchase of $3,000, so that may be a factor for some investors looking to initiate a position. The minimum purchase size for VB is typically one share, although fractional shares are becoming more common.

Investors can trade ETFs intraday, as well as in the pre-market and after-hours trading sessions. Investors can only buy/sell mutual funds once per day. This is not necessarily a major factor for long-term investors however.

Final Thoughts: VSMAX vs VB

VSMAX and VB are literally the same. However, investors should consider the above factors when deciding which one is best for them.

Further Reading

Investors curious about Vanguard’s large-cap funds may want to read our comparison of VLCAX vs VV.

The Fidelity S&P 500 Index Fund (FXAIX) and the State Street SPDR Portfolio S&P 500 ETF (SPLG) are two of the largest index mutual funds in existence and easily two of the most popular among individual investors. Both FXAIX and SPLG track the well-known S&P 500 index and form the core of many investor portfolios. Many investors compare FXAIX vs SPLG in order to decide which should be the foundation of their portfolio.

The Short Answer

There are not many differences between FXAIX and SPLG, besides the fact that FXAIX is a mutual fund and SPLG is an ETF. Therefore, investors should consider factors beyond the underlying portfolios (which are essentially identical) in order to decide which fund is best for them.

A quick reminder that this site does NOT provide investment recommendations.

The Long Answer

Historical Performance: FXAIX vs SPLG

FXAIX was launched on February 17, 1988, while SPLG was launched on November 8, 2005. Since then the two funds have performed identically; both funds have returned 9.45% annually! The cumulative performance difference between these two funds is roughly .26% (incredible considering the timeframe)! From a performance perspective, I would consider these two funds interchangeable.

Differences between FXAIX vs SPLG

Both FXAIX and SPLG track the S&P 500, so I will not delve into differences in geographic exposures, sector weights, or market cap coverage. For all intents and purposes, the portfolios are identical with 504 and 505 securities each. The S&P 500 has more than 500 stocks because of the index constituents have multiple share classes of stock (such as GOOG and GOOGL).

Factors to Consider

Transaction Costs

ETFs are free to trade at many brokers and custodians, including Fidelity. However, many brokers and custodians still charge commissions and/or transaction fees to buy/sell mutual funds. To my knowledge, Fidelity does not participate in the pay-to-play arrangements (with their competitor custodians) that would allow their mutual funds to trade for free on many platforms. So if an investor account is at Fidelity, it is generally free to trade FXAIX or SPLG. However, only SPLG is free to trade in many non-Fidelity accounts.

There is a bid-ask spread when trading ETFs, but this spread is typically less than .01% for SPLG and individual investor trades will not generally be large enough to “move” the market. In the case of SPLG, individual investors should not have a problem trading.

Tax Efficiency & Capital Gain Distributions

ETFs are typically more tax-efficient than mutual funds, due to their ability to avoid realizing capital gains through like-kind redemptions (a process that is beyond the scope of this post). As expected, SPLG is more tax-efficient.

FXAIX has made capital gains distributions in the past and I would expect this to continue in future. SPLG has not paid out a capital gain distribution in 15 years and I do not expect it to in the future. Thus, tax-sensitive investors may want to consider whether ETFs make more sense for them.

Tax Loss Harvesting

My personal preference is to keep a portfolio entirely mutual funds or entirely ETFs, due to the mechanics of settlement during tax loss harvesting. If an ETF has declined in value and an investor sells it, the trade and cash proceeds will not settle for two business days (T+2). That investor may want to “replace” the sold ETF immediately and attempt to buy another ETF or mutual fund simultaneously.

However, mutual funds settle on T+1 basis, so cash for the mutual purchase would be due in one business day (which is one day earlier than the cash from the ETF sale is received). This can obviously cause problems and (even though this issue can be addressed with careful planning) I find it easier to keep accounts invested in similar vehicles. In this case, if a portfolio is all mutual funds, I might lean more towards FXAIX. If all ETFs, I might lean more towards SPLG.

On this topic, investors may want to avoid using these two funds as tax loss harvesting substitutes for one another since they could be considered “substantially identical.”

Tradability

FXAIX does not have a stated minimum for purchases, although some brokerages (especially competitors of Fidelity) impose minimums. The minimum purchase size for SPLG is typically one share, although fractional shares are becoming more common. Investors can trade ETFs intraday, as well as in the pre-market and after-hours trading sessions. Investors can only buy/sell mutual funds once per day. This is not necessarily a major factor for long-term investors however.

Final Thoughts: FXAIX vs SPLG

Both FXAIX and SPLG are large, core funds sponsored and managed by Fidelity and State Street respectively. Performance has been nearly identical. I view these two funds as essentially interchangeable and would not spend too much energy trying to decide which one is “better.”

However, there are some situations that may call for one fund versus another. For instance, many custodians offer free ETF trades, but charge trading fees or redemption fees for mutual funds. So I might select FXAIX or SPLG solely based on where my account is held or whether I’m investing taxable vs retirement dollars. Despite these considerations, these two funds are very similar for all intents and purposes.

The Fidelity S&P 500 Index Fund (FXAIX) and the iShares Core S&P 500 ETF (IVV) are two of the largest index mutual funds in existence and easily two of the most popular among individual investors. Both FXAIX and IVV track the well-known S&P 500 index and form the core of many investor portfolios. Many investors compare FXAIX vs IVV in order to decide which should be the foundation of their portfolio.

The Short Answer

There are not many differences between FXAIX and IVV, besides the fact that FXAIX is a mutual fund and IVV is an ETF. Therefore, investors should consider factors beyond the underlying portfolios (which are essentially identical) in order to decide which fund is best for them.

A quick reminder that this site does NOT provide investment recommendations.

The Long Answer

Historical Performance: FXAIX vs IVV

FXAIX was launched on February 17, 1988, while IVV was launched on May 15, 2000. Since then the two funds have performed identically, with a difference of just .01% annually! The cumulative performance difference between these two funds is less than 1% (which is incredible considering the 22 year timeframe)! Thus, from a performance perspective, I would consider these two funds interchangeable.

Differences between FXAIX vs IVV

Both FXAIX and IVV track the S&P 500, so I will not delve into differences in geographic exposures, sector weights, or market cap coverage. For all intents and purposes, the portfolios are identical with 504 and 505 securities each. The S&P 500 has more than 500 stocks because of the index constituents have multiple share classes of stock (such as GOOG and GOOGL).

Factors to Consider

Transaction Costs

ETFs are free to trade at many brokers and custodians, including Fidelity. However, many brokers and custodians still charge commissions and/or transaction fees to buy/sell mutual funds. To my knowledge, Fidelity does not participate in the pay-to-play arrangements (with their competitor custodians) that would allow their mutual funds to trade for free on many platforms. So if an investor account is at Fidelity, it is generally free to trade FXAIX or IVV. However, only IVV is free to trade in many non-Fidelity accounts.

There is a bid-ask spread when trading ETFs, but this spread is typically less than .01% for IVV and individual investor trades will not generally be large enough to “move” the market. In the case of IVV, individual investors should not have a problem trading.

Tax Efficiency & Capital Gain Distributions

ETFs are typically more tax-efficient than mutual funds, due to their ability to avoid realizing capital gains through like-kind redemptions (a process that is beyond the scope of this post). As expected, IVV is more tax-efficient.

FXAIX has made capital gains distributions in the past and I would expect this to continue in future. IVV has not paid out a capital gain distribution in 22 years and I do not expect it to in the future. Thus, tax-sensitive investors may want to consider whether ETFs make more sense for them.

Tax Loss Harvesting

My personal preference is to keep a portfolio entirely mutual funds or entirely ETFs, due to the mechanics of settlement during tax loss harvesting. If an ETF has declined in value and an investor sells it, the trade and cash proceeds will not settle for two business days (T+2). That investor may want to “replace” the sold ETF immediately and attempt to buy another ETF or mutual fund simultaneously.

However, mutual funds settle on T+1 basis, so cash for the mutual purchase would be due in one business day (which is one day earlier than the cash from the ETF sale is received). This can obviously cause problems and (even though this issue can be addressed with careful planning) I find it easier to keep accounts invested in similar vehicles. In this case, if a portfolio is all mutual funds, I might lean more towards FXAIX. If all ETFs, I might lean more towards IVV.

On this topic, investors may want to avoid using these two funds as tax loss harvesting substitutes for one another since they could be considered “substantially identical.”

Tradability

FXAIX does not have a stated minimum for purchases, although some brokerages (especially competitors of Fidelity) impose minimums. The minimum purchase size for IVV is typically one share, although fractional shares are becoming more common. Investors can trade ETFs intraday, as well as in the pre-market and after-hours trading sessions. Investors can only buy/sell mutual funds once per day. This is not necessarily a major factor for long-term investors however.

Final Thoughts: FXAIX vs IVV

Both FXAIX and IVV are large, core funds sponsored and managed by Fidelity and Blackrock respectively. Performance has been nearly identical. I view these two funds as essentially interchangeable and would not spend too much energy trying to decide which one is “better.”

However, there are some situations that may call for one fund versus another. For instance, many custodians offer free ETF trades, but charge trading fees or redemption fees for mutual funds. So I might select FXAIX or IVV solely based on where my account is held or whether I’m investing taxable vs retirement dollars. Despite these considerations, these two funds are very similar for all intents and purposes.

The Fidelity S&P 500 Index Fund (FXAIX) and the State Street SPDR S&P 500 ETF Trust (SPY) are two of the largest index mutual funds in existence and easily two of the most popular among individual investors. Both FXAIX and SPY track the well-known S&P 500 index and form the core of many investor portfolios. Many investors compare FXAIX vs SPY in order to decide which should be the foundation of their portfolio.

The Short Answer

There are not many differences between FXAIX and SPY, besides the fact that FXAIX is a mutual fund and SPY is an ETF. Therefore, investors should consider factors beyond the underlying portfolios (which are essentially identical) in order to decide which fund is best for them.

A quick reminder that this site does NOT provide investment recommendations.

The Long Answer

Historical Performance: FXAIX vs SPY

FXAIX was launched on February 17, 1988, while SPY was launched on January 22, 1993. Since then the two funds have performed identically, with a difference of just .03% annually! The cumulative performance difference between these two funds is roughly 13% (quite small considering the nearly thirty year timeframe)! Thus, from a performance perspective, I would consider these two funds interchangeable.

Differences between FXAIX vs SPY

Both FXAIX and SPY track the S&P 500, so I will not delve into differences in geographic exposures, sector weights, or market cap coverage. For all intents and purposes, the portfolios are identical with 504 and 505 securities each. The S&P 500 has more than 500 stocks because of the index constituents have multiple share classes of stock (such as GOOG and GOOGL).

Factors to Consider

Transaction Costs

ETFs are free to trade at many brokers and custodians, including Fidelity. However, many brokers and custodians still charge commissions and/or transaction fees to buy/sell mutual funds. To my knowledge, Fidelity does not participate in the pay-to-play arrangements (with their competitor custodians) that would allow their mutual funds to trade for free on many platforms. So if an investor account is at Fidelity, it is generally free to trade FXAIX or SPY. However, only SPY is free to trade in many non-Fidelity accounts.

There is a bid-ask spread when trading ETFs, but this spread is typically less than .01% for SPY and individual investor trades will not generally be large enough to “move” the market. In the case of SPY, individual investors should not have a problem trading.

Tax Efficiency & Capital Gain Distributions

ETFs are typically more tax-efficient than mutual funds, due to their ability to avoid realizing capital gains through like-kind redemptions (a process that is beyond the scope of this post). As expected, SPY is more tax-efficient.

FXAIX has made capital gains distributions in the past and I would expect this to continue in future. SPY has not paid out a capital gain distribution in 25 years and I do not expect it to in the future. Thus, tax-sensitive investors may want to consider whether ETFs make more sense for them.

Tax Loss Harvesting

My personal preference is to keep a portfolio entirely mutual funds or entirely ETFs, due to the mechanics of settlement during tax loss harvesting. If an ETF has declined in value and an investor sells it, the trade and cash proceeds will not settle for two business days (T+2). That investor may want to “replace” the sold ETF immediately and attempt to buy another ETF or mutual fund simultaneously.

However, mutual funds settle on T+1 basis, so cash for the mutual purchase would be due in one business day (which is one day earlier than the cash from the ETF sale is received). This can obviously cause problems and (even though this issue can be addressed with careful planning) I find it easier to keep accounts invested in similar vehicles. In this case, if a portfolio is all mutual funds, I might lean more towards FXAIX. If all ETFs, I might lean more towards SPY.

On this topic, investors may want to avoid using these two funds as tax loss harvesting substitutes for one another since they could be considered “substantially identical.”

Tradability

FXAIX does not have a stated minimum for purchases, although some brokerages (especially competitors of Fidelity) impose minimums. The minimum purchase size for SPY is typically one share, although fractional shares are becoming more common. Investors can trade ETFs intraday, as well as in the pre-market and after-hours trading sessions. Investors can only buy/sell mutual funds once per day. This is not necessarily a major factor for long-term investors however.

Final Thoughts: FXAIX vs SPY

Both FXAIX and SPY are large, core funds sponsored and managed by Fidelity and State Street respectively. Performance has been nearly identical. I view these two funds as essentially interchangeable and would not spend too much energy trying to decide which one is “better.”

However, there are some situations that may call for one fund versus another. For instance, many custodians offer free ETF trades, but charge trading fees or redemption fees for mutual funds. So I might select FXAIX or SPY solely based on where my account is held or whether I’m investing taxable vs retirement dollars. Despite these considerations, these two funds are very similar for all intents and purposes.

The Fidelity S&P 500 Index Fund (FXAIX) and the Vanguard S&P 500 Index Fund (VOO) are two of the largest index mutual funds in existence and easily two of the most popular among individual investors. Both FXAIX and VOO track the well-known S&P 500 index and form the core of many investor portfolios. Many investors compare FXAIX vs VOO in order to decide which should be the foundation of their portfolio.

The Short Answer

There are not many differences between FXAIX and VOO, besides the fact that FXAIX is a mutual fund and VOO is an ETF. Therefore, investors should consider factors beyond the underlying portfolios (which are essentially identical) in order to decide which fund is best for them.

A quick reminder that this site does NOT provide investment recommendations.

The Long Answer

Historical Performance: FXAIX vs VOO

FXAIX was launched on February 17, 1988, while VOO was launched on September 7, 2010. Since then the two funds have performed identically, with a difference of just .03% annually! The cumulative performance difference between these two funds has been just over 1.3% (over a dozen year timeframe)! Thus, from a performance perspective, I would consider these two funds interchangeable.

Differences between FXAIX vs VOO

Both FXAIX and VOO track the S&P 500, so I will not delve into differences in geographic exposures, sector weights, or market cap coverage. For all intents and purposes, the portfolios are identical with 504 stocks each. The S&P 500 has more than 500 stocks because of the index constituents have multiple share classes of stock (such as GOOG and GOOGL).

Factors to Consider

Transaction Costs

ETFs are free to trade at many brokers and custodians, including Fidelity. However, many brokers and custodians still charge commissions and/or transaction fees to buy/sell mutual funds. To my knowledge, Fidelity does not participate in the pay-to-play arrangements (with their competitor custodians) that would allow their mutual funds to trade for free on many platforms. So if an investor account is at Fidelity, it is generally free to trade FXAIX or VOO. However, only VOO is free to trade in many non-Fidelity accounts.

There is a bid-ask spread when trading ETFs, but this spread is typically less than .01% for VOO and individual investor trades will not generally be large enough to “move” the market. In the case of VOO, individual investors should not have a problem trading.

Tax Efficiency & Capital Gain Distributions

ETFs are typically more tax-efficient than mutual funds, due to their ability to avoid realizing capital gains through like-kind redemptions (a process that is beyond the scope of this post). As expected, VOO is more tax-efficient.

FXAIX has made capital gains distributions in the past and I would expect this to continue in future. VOO has never paid out a capital gain distribution, nor do I expect it to in the future. Thus, tax-sensitive investors may want to consider whether ETFs make more sense for them.

Tax Loss Harvesting

My personal preference is to keep a portfolio entirely mutual funds or entirely ETFs, due to the mechanics of settlement during tax loss harvesting. If an ETF has declined in value and an investor sells it, the trade and cash proceeds will not settle for two business days (T+2). That investor may want to “replace” the sold ETF immediately and attempt to buy another ETF or mutual fund simultaneously.

However, mutual funds settle on T+1 basis, so cash for the mutual purchase would be due in one business day (which is one day earlier than the cash from the ETF sale is received). This can obviously cause problems and (even though this issue can be addressed with careful planning) I find it easier to keep accounts invested in similar vehicles. In this case, if a portfolio is all mutual funds, I might lean more towards FXAIX. If all ETFs, I might lean more towards VOO.

On this topic, investors may want to avoid using these two funds as tax loss harvesting substitutes for one another since they could be considered “substantially identical.”

Tradability

FXAIX does not have a stated minimum for purchases, although some brokerages (especially competitors of Fidelity) impose minimums. The minimum purchase size for VOO is typically one share, although fractional shares are becoming more common.Investors can trade ETFs intraday, as well as in the pre-market and after-hours trading sessions. Investors can only buy/sell mutual funds once per day. This is not necessarily a major factor for long-term investors however.

Final Thoughts: FXAIX vs VOO

Both FXAIX and VOO are large, core funds sponsored and managed by Fidelity and Vanguard respectively. Performance has been nearly identical. I view these two funds as essentially interchangeable and would not spend too much energy trying to decide which one is “better.”

However, there are some situations that may call for one fund versus another. For instance, many custodians offer free ETF trades, but charge trading fees or redemption fees for mutual funds. So I might select FXAIX or VOO solely based on where my account is held or whether I’m investing taxable vs retirement dollars. Despite these considerations, these two funds are very similar for all intents and purposes. For further reading, check out my review of VOO.

The Vanguard Mid-Cap Index Fund (Admiral Shares) (symbol VIMAX) and the Vanguard Mid-Cap ETF (symbol VO) are two of the largest and most popular mid-cap index funds. Some compare VIMAX vs VO not realizing that they are just two different share classes of the same portfolio.

A quick reminder that this site does NOT provide investment recommendations.

The Short Answer

VIMAX and VO are different share classes of the same portfolio. The decision to buy one or the other depends on investor-specific factors (some of which are listed below).

The Longer Answer

Vanguard ETFs are structured as share classes of their mutual funds. This is a patented structure that is scheduled to expire in 2023, so we may see this structure more frequently in the near future. In other words, VIMAX and VO are not two funds pursuing an identical strategy; they are the same fund!

Historical Performance: VIMAX vs VO

VIMAX was launched on November 12, 2001, while VO was launched a few years later on January 26, 2004. Since that time, performance has been identical! Both funds have returned 9.69% annually! Despite changes in fees and expenses over the past decade, the cumulative difference in performance over that time period is less than .2%! Looking at the chart of VIMAX vs VO below, it is obvious that they are identical.

Differences Between VIMAX and VO

Since the two funds are actually two share classes of the same fund, I will skip the usual comparisons here. The geographic exposures, sector weights, market cap coverage so on is identical because the two funds are shares in the same portfolio. There are some resources on the internet indicating otherwise, but these are incorrect.

Factors to Consider

Transaction Costs

ETFs are free to trade at many brokers and custodians, including Vanguard. However, many brokers and custodians still charge commissions and/or transaction fees to buy/sell mutual funds. To my knowledge, Vanguard does not participate in the pay-to-play arrangements that would allow their mutual funds to trade for free on many platforms. So if an investor account is at Vanguard, it is free to trade VIMAX or VO. However, only VO is free to trade in non-Vanguard accounts.

There is a bid-ask spread when trading ETFs, but this spread is typically less than .03% for VO and individual investor trades will not generally be large enough to “move” the market. In the case of VO, individual investors should not have a problem trading.

Tax Efficiency & Capital Gain Distributions

ETFs are typically more tax-efficient than mutual funds, due to their ability to avoid realizing capital gains through like-kind redemptions (a process that is beyond the scope of this post). However, since Vanguard ETFs are a share class of their mutual funds, the mutual funds are able to benefit from this feature of the ETF. In other words, VO is able to extend its tax benefits to VIMAX.

VIMAX made capital gains distributions prior to VO’s launch in 2004, but has not made any since VO’s launch. Looking at the below, it is clear that the launch of VO improved the tax situation for VIMAX owners. I noticed some posts on the internet saying that VO is more tax-efficient than VIMAX, but this incorrect as neither fund currently makes capital gains distributions.

Tax Loss Harvesting

My personal preference is to keep a portfolio entirely mutual funds or entirely ETFs, due to the mechanics of settlement during tax loss harvesting. If an ETF has declined in value and an investor sells it, the trade and cash proceeds will not settle for two business days (T+2). That investor may want to “replace” the sold ETF immediately and attempt to buy another ETF or mutual fund simultaneously.

However, mutual funds settle on T+1 basis, so cash for the mutual purchase would be due in one business day (which is one day earlier than the cash from the ETF sale is received). This can obviously cause problems and (even though this issue can be addressed with careful planning) I find it easier to keep accounts invested in similar vehicles. In this case, if a portfolio is all mutual funds, I might lean more towards VIMAX. If all ETFs, I might lean more towards VO.

On this topic, investors should probably avoid using these two funds as tax loss harvesting substitutes for one another since they would likely be considered “substantially identical.”

Tradability

VIMAX does have a stated minimum initial purchase of $3,000, so that may be a factor for some investors looking to initiate a position. The minimum purchase size for VO is typically one share, although fractional shares are becoming more common.

Investors can trade ETFs intraday, as well as in the pre-market and after-hours trading sessions. Investors can only buy/sell mutual funds once per day. This is not necessarily a major factor for long-term investors however.

Final Thoughts: VIMAX vs VO

VIMAX and VO are literally the same. However, investors should consider the above factors when deciding which one is best for them.

The Vanguard High Dividend Yield Index Fund (Admiral Shares) (symbol VHYAX) and the Vanguard High Dividend Yield ETF (symbol VYM) are two of the largest and most popular high-dividend yield index funds. Some compare VHYAX vs VYM not realizing that they are just two different share classes of the same portfolio.

A quick reminder that this site does NOT provide investment recommendations.

The Short Answer

VHYAX and VYM are different share classes of the same portfolio. The decision to buy one or the other depends on investor-specific factors (some of which are listed below).

The Longer Answer

Vanguard ETFs are structured as share classes of their mutual funds. This is a patented structure that is scheduled to expire in 2023, so we may see this structure more frequently in the near future. In other words, VHYAX and VYM are not two funds pursuing an identical strategy; they are the same fund!

Historical Performance: VHYAX vs VYM

VYM was launched on November 10, 2006, while VHYAX was launched more than a decade later on February 7, 2019. Since that time, performance has been identical! Both funds have returned 11.92% annually. Despite changes in fees and expenses over this time period, there is no difference in cumulative performance since inception! Looking at the chart of VHYAX vs VYM below, it is obvious that they are identical.

Differences Between VHYAX and VYM

Since the two funds are actually two share classes of the same fund, I will skip the usual comparisons here. The geographic exposures, sector weights, market cap coverage so on is identical because the two funds are shares in the same portfolio. There are some resources on the internet indicating otherwise, but these are incorrect.

Factors to Consider

Transaction Costs

ETFs are free to trade at many brokers and custodians, including Vanguard. However, many brokers and custodians still charge commissions and/or transaction fees to buy/sell mutual funds. To my knowledge, Vanguard does not participate in the pay-to-play arrangements that would allow their mutual funds to trade for free on many platforms. So if an investor account is at Vanguard, it is free to trade VHYAX or VYM. However, only VYM is free to trade in non-Vanguard accounts.

There is a bid-ask spread when trading ETFs, but this spread is typically less than .01% for VYM and individual investor trades will not generally be large enough to “move” the market. In the case of VYM, individual investors should not have a problem trading.

Tax Efficiency & Capital Gain Distributions

ETFs are typically more tax-efficient than mutual funds, due to their ability to avoid realizing capital gains through like-kind redemptions (a process that is beyond the scope of this post). However, since Vanguard ETFs are a share class of their mutual funds, the mutual funds are able to benefit from this feature of the ETF. In other words, VYM is able to extend its tax benefits to VHYAX.

VHYAX has never paid a capital gain distribution! I noticed some posts on the internet saying that VYM is more tax-efficient than VHYAX, but this incorrect as neither fund has ever made a capital gains distribution.

Tax Loss Harvesting

My personal preference is to keep a portfolio entirely mutual funds or entirely ETFs, due to the mechanics of settlement during tax loss harvesting. If an ETF has declined in value and an investor sells it, the trade and cash proceeds will not settle for two business days (T+2). That investor may want to “replace” the sold ETF immediately and attempt to buy another ETF or mutual fund simultaneously.

However, mutual funds settle on T+1 basis, so cash for the mutual purchase would be due in one business day (which is one day earlier than the cash from the ETF sale is received). This can obviously cause problems and (even though this issue can be addressed with careful planning) I find it easier to keep accounts invested in similar vehicles. In this case, if a portfolio is all mutual funds, I might lean more towards VHYAX. If all ETFs, I might lean more towards VYM.

On this topic, investors should probably avoid using these two funds as tax loss harvesting substitutes for one another since they would likely be considered “substantially identical.”

Tradability

VHYAX does have a stated minimum initial purchase of $3,000, so that may be a factor for some investors looking to initiate a position. The minimum purchase size for VYM is typically one share, although fractional shares are becoming more common.

Investors can trade ETFs intraday, as well as in the pre-market and after-hours trading sessions. Investors can only buy/sell mutual funds once per day. This is not necessarily a major factor for long-term investors however.

Final Thoughts: VHYAX vs VYM

VHYAX and VYM are literally the same. However, investors should consider the above factors when deciding which one is best for them.

Further Reading

Investors curious about Vanguard larger dividend-oriented funds may want to read our comparison of VDADX vs VIG.

The Vanguard Dividend Appreciation Index Fund (Admiral Shares) (symbol VDADX) and the Vanguard Dividend Appreciation ETF (symbol VIG) are two of the largest and most popular dividend-oriented index funds. Some compare VDADX vs VIG not realizing that they are just two different share classes of the same portfolio.

A quick reminder that this site does NOT provide investment recommendations.

The Short Answer

VDADX and VIG are different share classes of the same portfolio. The decision to buy one or the other depends on investor-specific factors (some of which are listed below).

The Longer Answer

Vanguard ETFs are structured as share classes of their mutual funds. This is a patented structure that is scheduled to expire in 2023, so we may see this structure more frequently in the near future. In other words, VDADX and VIG are not two funds pursuing an identical strategy; they are the same fund!

Historical Performance: VDADX vs VIG

VIG was launched on April 21, 2006, while VDADX was launched a few years later on December 19, 2013. Since that time, performance has been identical: 11.08% vs 11.07% annually. Despite changes in fees and expenses over the past decade, the cumulative difference in performance over that time period is less than half a percent! Looking at the chart of VDADX vs VIG below, it is obvious that they are identical.

Differences Between VDADX and VIG

Since the two funds are actually two share classes of the same fund, I will skip the usual comparisons here. The geographic exposures, sector weights, market cap coverage so on is identical because the two funds are shares in the same portfolio. There are some resources on the internet indicating otherwise, but these are incorrect.

Factors to Consider

Transaction Costs

ETFs are free to trade at many brokers and custodians, including Vanguard. However, many brokers and custodians still charge commissions and/or transaction fees to buy/sell mutual funds. To my knowledge, Vanguard does not participate in the pay-to-play arrangements that would allow their mutual funds to trade for free on many platforms. So if an investor account is at Vanguard, it is free to trade VDADX or VIG. However, only VIG is free to trade in non-Vanguard accounts.

There is a bid-ask spread when trading ETFs, but this spread is typically less than .01% for VIG and individual investor trades will not generally be large enough to “move” the market. In the case of VIG, individual investors should not have a problem trading.

Tax Efficiency & Capital Gain Distributions

ETFs are typically more tax-efficient than mutual funds, due to their ability to avoid realizing capital gains through like-kind redemptions (a process that is beyond the scope of this post). However, since Vanguard ETFs are a share class of their mutual funds, the mutual funds are able to benefit from this feature of the ETF. In other words, VIG is able to extend its tax benefits to VDADX.

VDADX has never paid a capital gain distribution! I noticed some posts on the internet saying that VIG is more tax-efficient than VDADX, but this incorrect as neither fund has ever made a capital gains distribution.

Tax Loss Harvesting

My personal preference is to keep a portfolio entirely mutual funds or entirely ETFs, due to the mechanics of settlement during tax loss harvesting. If an ETF has declined in value and an investor sells it, the trade and cash proceeds will not settle for two business days (T+2). That investor may want to “replace” the sold ETF immediately and attempt to buy another ETF or mutual fund simultaneously.

However, mutual funds settle on T+1 basis, so cash for the mutual purchase would be due in one business day (which is one day earlier than the cash from the ETF sale is received). This can obviously cause problems and (even though this issue can be addressed with careful planning) I find it easier to keep accounts invested in similar vehicles. In this case, if a portfolio is all mutual funds, I might lean more towards VDADX. If all ETFs, I might lean more towards VIG.

On this topic, investors should probably avoid using these two funds as tax loss harvesting substitutes for one another since they would likely be considered “substantially identical.”

Tradability

VDADX does have a stated minimum initial purchase of $3,000, so that may be a factor for some investors looking to initiate a position. The minimum purchase size for VIG is typically one share, although fractional shares are becoming more common.

Investors can trade ETFs intraday, as well as in the pre-market and after-hours trading sessions. Investors can only buy/sell mutual funds once per day. This is not necessarily a major factor for long-term investors however.

Final Thoughts: VDADX vs VIG

VDADX and VIG are literally the same. However, investors should consider the above factors when deciding which one is best for them.

Further Reading

Investors curious in looking at Vanguard others flagship dividend funds can read our comparison of VHYAX vs VYM.

The Vanguard 500 Index Fund (Admiral Shares) (symbol VEMAX) and the Vanguard S&P 500 ETF (symbol VWO) are two of the largest and most popular emerging markets funds. Some compare VEMAX vs VWO not realizing that they are just two different share classes of the same portfolio.

A quick reminder that this site does NOT provide investment recommendations.

The Short Answer

VEMAX and VWO are different share classes of the same portfolio. The decision to buy one or the other depends on investor-specific factors (some of which are listed below).

The Longer Answer

Vanguard ETFs are structured as share classes of their mutual funds. This is a patented structure that is scheduled to expire in 2023, so we may see this structure more frequently in the near future. In other words, VEMAX and VWO are not two funds pursuing an identical strategy; they are the same fund!

Historical Performance: VEMAX vs VWO

VWO was launched on March 4, 2005, and VEMAX was launched the following year on June 23, 2006. Since that time, performance has been identical: 4.49% vs 4.51% annually. Despite changes in fees and expenses over this time period, the cumulative difference in performance over that time period is less than half a percent! Looking at the chart of VEMAX vs VWO below, it is obvious that they are identical.

Differences Between VEMAX and VWO

Since the two funds are actually two share classes of the same fund, I will skip the usual comparisons here. The geographic exposures, sector weights, market cap coverage so on is identical because the two funds are shares in the same portfolio. There are some resources on the internet indicating otherwise, but these are incorrect.

Factors to Consider

Transaction Costs

ETFs are free to trade at many brokers and custodians, including Vanguard. However, many brokers and custodians still charge commissions and/or transaction fees to buy/sell mutual funds. To my knowledge, Vanguard does not participate in the pay-to-play arrangements that would allow their mutual funds to trade for free on many platforms. So if an investor account is at Vanguard, it is free to trade VEMAX or VWO. However, only VWO is free to trade in non-Vanguard accounts.

There is a bid-ask spread when trading ETFs, but this spread is typically less than .01% for VWO and individual investor trades will not generally be large enough to “move” the market. In the case of VWO, individual investors should not have a problem trading.

Tax Efficiency & Capital Gain Distributions

ETFs are typically more tax-efficient than mutual funds, due to their ability to avoid realizing capital gains through like-kind redemptions (a process that is beyond the scope of this post). However, since Vanguard ETFs are a share class of their mutual funds, the mutual funds are able to benefit from this feature of the ETF. In other words, VWO is able to extend its tax benefits to VEMAX.

VEMAX has never paid a capital gain distribution! I noticed some posts on the internet saying that VWO is more tax-efficient than VEMAX, but this incorrect as neither fund has ever made a capital gains distribution.

Tax Loss Harvesting

My personal preference is to keep a portfolio entirely mutual funds or entirely ETFs, due to the mechanics of settlement during tax loss harvesting. If an ETF has declined in value and an investor sells it, the trade and cash proceeds will not settle for two business days (T+2). That investor may want to “replace” the sold ETF immediately and attempt to buy another ETF or mutual fund simultaneously.

However, mutual funds settle on T+1 basis, so cash for the mutual purchase would be due in one business day (which is one day earlier than the cash from the ETF sale is received). This can obviously cause problems and (even though this issue can be addressed with careful planning) I find it easier to keep accounts invested in similar vehicles. In this case, if a portfolio is all mutual funds, I might lean more towards VEMAX. If all ETFs, I might lean more towards VWO.

On this topic, investors should probably avoid using these two funds as tax loss harvesting substitutes for one another since they would likely be considered “substantially identical.”

Tradability

VEMAX does have a stated minimum initial purchase of $3,000, so that may be a factor for some investors looking to initiate a position. The minimum purchase size for VWO is typically one share, although fractional shares are becoming more common.

Investors can trade ETFs intraday, as well as in the pre-market and after-hours trading sessions. Investors can only buy/sell mutual funds once per day. This is not necessarily a major factor for long-term investors however.

Final Thoughts: VEMAX vs VWO

VEMAX and VWO are literally the same. However, investors should consider the above factors when deciding which one is best for them.

Further Reading

Investors interested in reading about the VEMAX and VWO’s developed markets counterparts can read our comparison of VTMGX vs VEA.