Fund Comparison

The Vanguard Growth Index Fund (Admiral Shares) (symbol VIGAX) and the Vanguard Growth Index Fund ETF (symbol VUG) are two of the largest and most popular growth-oriented index funds. Some compare VIGAX vs VUG 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

VIGAX and VUG 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, VIGAX and VUG are not two funds pursuing an identical strategy; they are the same fund!

Historical Performance: VIGAX vs VUG

VIGAX was launched on November 13, 2000 and VUG was launched a few years later on January 26, 2004. Since that time, performance has been identical: 9.80% vs 9.79% annually. Despite changes in fees and expenses since inception, the cumulative difference in performance over that time period is less than half a percent! Looking at the chart of VIGAX vs VUG below, it is obvious that they are identical.

Differences Between VIGAX and VUG

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 VIGAX or VUG. However, only VUG 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 VUG and individual investor trades will not generally be large enough to “move” the market. In the case of VUG, 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, VUG is able to extend its tax benefits to VIGAX.

VIGAX has never paid a capital gain distribution, although the older “Investor” share class (symbol VIGRX) did pay out capital gains distributions prior to VIGAX’s launch in 2000. I noticed some posts on the internet saying that VUG is more tax-efficient than VIGAX, but this incorrect as neither VIGAX nor VUG 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 VIGAX. If all ETFs, I might lean more towards VUG.

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

VIGAX 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 VUG 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: VIGAX vs VUG

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

Further Reading

Investors looking for the value-oriented counterparts to VIGAX and VUG can read our post on VVIAX vs VTV. To see how VUG compares to a more diversified index fund, check out my post on VUG vs VOO (or VOOG vs VOO).

The Vanguard Value Index Fund (Admiral Shares) (symbol VVIAX) and the Vanguard Value Index Fund ETF (symbol VTV) are two of the largest and most popular value index funds. Some compare VVIAX vs VTV 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

VVIAX and VTV 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, VVIAX and VTV are not two funds pursuing an identical strategy; they are the same fund!

Historical Performance: VVIAX vs VTV

VVIAX was launched on November 13, 2000 and VTV was launched a few years later on January 26, 2004. Since that time, performance has been identical: 8.76% vs 8.77% annually. Despite changes in fees and expenses over the past decade, the cumulative difference in performance over that time period is less than one percent! Looking at the chart of VVIAX vs VTV below, it is obvious that they are identical.

Differences Between VVIAX and VTV

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 VVIAX or VTV. However, only VTV 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 VTV and individual investor trades will not generally be large enough to “move” the market. In the case of VTV, 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, VTV is able to extend its tax benefits to VVIAX.

VVIAX paid capital gains distributions prior to VTV’s launch, but has not made any capital gains distributions since VTV launched. As you can see below, the last cap gain distribution was in 2001. The bear market in the following years make cap gains distributions unnecessary and then VTV launched in 2004 and helped VVIAX avoid any cap gains realizations ever again!

I noticed some posts on the internet saying that VTV is more tax-efficient than VVIAX, but this incorrect as neither 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 VVIAX. If all ETFs, I might lean more towards VTV.

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

VVIAX 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 VTV 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: VVIAX vs VTV

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

Further Reading

Investors looking for the growth-oriented counterparts to VVIAX and VTV can check out our post on VIGAX vs VUG. Those looking to compare value against a more diversified index fund should read our comparison of VTV vs VOO.

The Vanguard Short-Term Inflation-Protected Securities Index Fund (Admiral Shares) (symbol VTAPX) and the Vanguard Short-Term Inflation-Protected Securities ETF (symbol VTIP) are two of the largest and most popular Treasury inflation-protected securities (TIPS) funds. Some compare VTAPX vs VTIP 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

VTAPX and VTIP 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, VTAPX and VTIP are not two funds pursuing an identical strategy; they are the same fund!

Historical Performance: VTAPX vs VTIP

VTIP was launched on October 12, 2012, and VTAPX was launched a few days later on October 16, 2012. Since that time, performance has been identical! Both funds have returned 1.34% annually. Despite changes in fees and expenses over the past 10 years, there has been no cumulative difference in performance over that time period! Looking at the chart of VTAPX vs VTIP below, it is obvious that they are identical.

Risks of Fixed-Income ETFs

One of the risks of fixed-income ETFs is that they trade well below their net asset value (NAV) in times of distress. This is clear if we chart VTAPX vs VTIP during the first half of 2020. VTIP declined about 6.5% (from +1.5% to -5%), while VTAPX “only” declined 4% (peak-to-trough). Remember, these are simply different share classes of the exact same fund! However, VTIP trades at a market price and VTAPX is traded at a NAV.

This is caused by the fact that fixed-income typically trades at wide bid-ask spreads, which widen even further during market volatility. Sometimes the bids will disappear altogether. Mutual funds generally publish a NAV based on market prices (or estimated values for fixed-income), so estimating a NAV is difficult if the market freezes or bids disappear.

The consensus is that ETFs provide better “price discovery” than mutual funds, since ETFs represent actual market prices. In this example, it is widely assumed that the VTIP value was closer to value of the underlying portfolio than the VTAPX NAV. Interestingly, holders of VTAPX could have sold their holdings and rotated into VTIP (which is the exact same portfolio) at a substantial discount.

This phenomenon is not limited to illiquid ETFs, as we saw a similar dynamic with Vanguard’s flagship bond funds BND and VBLTX, which are two of the largest funds in existence and mostly invest in the most liquid fixed-income asset classes.

Differences Between VTAPX and VTIP

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 VTAPX or VTIP. However, only VTIP is free to trade in non-Vanguard accounts.

There is a bid-ask spread when trading ETFs, but this spread is typically less than .02% for VTIP and individual investor trades will not generally be large enough to “move” the market. In the case of VTIP, 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, VTIP is able to extend its tax benefits to VTAPX.

VTAPX has never paid out a capital gains distribution! I noticed some posts on the internet saying that VTIP is more tax-efficient than VTAPX, but this incorrect.

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 VTAPX. If all ETFs, I might lean more towards VTIP.

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

VTAPX 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 VTIP 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: VTAPX vs VTIP

VTAPX and VTIP are literally the same portfolio. However, I personally shy away from fixed-income ETFs due to their tendency to trade below NAV during episodes of extreme volatility. If two options provide the same risk and return, but one does not have periodic blowups then I’ll go with that one. Of course, there are other factors to consider (such as the above) and long-term holders may not care about the short-term volatility as long as the ETF eventually trades back to NAV.

State Street’s SPDR S&P 500 ETF Trust (SPY) and the Vanguard Total Stock Market Index fund (VTSAX) are two of the largest funds in existence and easily two of the most popular among individual investors. SPY and VTSAX are the core of many investor portfolios and many investors compare VTSAX vs SPY in order to decide which should be the foundation of their portfolio.

The Short Answer

The main difference between SPY and VTSAX is that SPY is a large- and mid-cap ETF, while VTSAX is a total market mutual fund. Despite these differences, the total return between these two funds is nearly identical and I consider them interchangeable for all intents and purposes.

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

The Long Answer

Historical Performance: VTSAX vs SPY

SPY was the first ETF ever launched in the US (January 1993), while VTSAX was launched on November 13, 2000. Since then VTSAX has outperformed by roughly .36% annually. This is most likely driven by small-caps’ relative outperformance initially, even though that trend has reversed during the past decade. Despite variations in the size factor performance over the decades, the long-term performance between these two funds is incredibly similar.

Differences between VTSAX vs SPY

The biggest difference between SPY and VTSAX is the market cap exposure of the funds. SPY tracks the S&P 500 index which includes mostly large-caps and some mid-caps, while VTSAX covers much more of the market by including more mid-caps and small-caps.

Geographic Exposure

Both SPY and VTSAX hold essentially 100% stocks, so I will not dig into country exposures or market classification here. For intents and purposes, the two funds have identical exposures.

Market Cap Exposure

SPY focuses on the S&P 500 index and so it mostly holds large-caps with a bit of mid-cap exposure. VTSAX tracks the broader CRSP US Total Market Index and so it owns many more mid-caps and small-caps (SPY data as of 12/7/2022, VTSAX data as of 10/31/2022). In other words, SPY is a large-cap vehicle, while VTSAX is a total market vehicle. That being said, due to market cap weighting, both funds are overwhelmingly influenced by the large-cap holdings.

	SPY	VTSAX
Large-Cap	84%	73%
Mid-Cap	16%	19%
Small-Cap	0%	9%

Sector Weights

The sector weights between SPY and VTSAX are nearly identical (SPY data as of 12/7/2022, VTSAX data as of 10/31/2022).

	SPY	VTSAX
Basic Materials	2.44%	2.51%
Consumer Cyclical	9.99%	10.66%
Financial Services	13.65%	13.79%
Real Estate	2.79%	3.45%
Communication Services	7.38%	6.80%
Energy	4.96%	5.31%
Industrials	8.97%	9.64%
Technology	23.41%	23.06%
Consumer Defensive	7.54%	6.75%
Healthcare	15.81%	15.17%
Utilities	3.06%	2.87%

Final Thoughts: VTSAX vs SPY

Both SPY and VTSAX are large, core funds sponsored and managed by State Street and Vanguard respectively. Although SPY is more of a large-cap ETF and VTSAX is a total market mutual fund, 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.

• Many custodians offer free ETF trades, but charge trading fees or redemption fees for mutual fund. So unless my account was at Vanguard, I might opt for SPY.
• If most of my existing portfolio was mutual funds, I might stick to mutual funds so that settlement periods for trades are consistent (for activities like tax-loss harvesting, etc). Similarly, if most of my portfolio was ETFs, I might stick to ETFs.
• The ETF structure is generally a more tax-efficient vehicle, so SPY may have a lower risk of adverse tax situations in the future.

Despite these considerations, these two funds are very similar for all intents and purposes.

The Vanguard Total Bond Market Index Fund (Admiral Shares) (symbol VBTLX) and the Vanguard Total Bond Market ETF (symbol BND) are two of the largest and most popular bond index funds. Some compare VBTLX vs BND 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

VBTLX and BND 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, VBTLX and BND are not two funds pursuing an identical strategy; they are the same fund!

Historical Performance: VBTLX vs BND

VBTLX was launched on November 12, 2001, and BND was launched on April 4, 2007. Since that time, performance has been nearly identical: 2.87 vs 2.91% annually. Despite changes in fees and expenses over the past 15 years, the cumulative difference in performance over that time period has been less than 1%! Looking at the chart of VBTLX vs BND below, it is obvious that they are identical.

Risks of Fixed-Income ETFs

One of the risks of fixed-income ETFs is that they trade well below their net asset value (NAV) in times of distress. This is clear if we chart VBTLX vs BND during the first half of 2020. BND declined about 10% (from +6% to -4%), while VBTLX “only” declined 7%. Remember, these are simply different share classes of the exact same fund! However, BND trades at a market price and VBTLX is traded at a NAV.

This is caused by the fact that fixed-income typically trades at wide bid-ask spreads, which widen even further during market volatility. Sometimes the bids will disappear altogether. Mutual funds generally publish a NAV based on market prices (or estimated values for fixed-income), so estimating a NAV is difficult if the market freezes or bids disappear.

The consensus is that ETFs provide better “price discovery” than mutual funds, since ETFs represent actual market prices. In this example, it is widely assumed that the BND value was closer to value of the underlying portfolio than the VBTLX NAV. Interestingly, holders of VBTLX could have sold their holdings and rotated into BND (which is the exact same portfolio) at a substantial discount.

BND mostly invests in government-backed bonds, such as Treasuries and Agencies. However, even funds that invest 100% in Treasuries ran into the same issue, as evidenced by looking at VTAPX vs VTIP.

Differences Between VBTLX and BND

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 VBTLX or BND. However, only BND 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 BND and individual investor trades will not generally be large enough to “move” the market. In the case of BND, 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, BND is able to extend its tax benefits to VBTLX. I noticed some posts on the internet saying that BND is more tax-efficient than VBTLX, but this incorrect.

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 VBTLX. If all ETFs, I might lean more towards BND.

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

VBTLX 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 BND 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: VBTLX vs BND

VBTLX and BND are literally the same portfolio. However, I personally shy away from fixed-income ETFs due to their tendency to trade below NAV during episodes of extreme volatility. If two options provide the same risk and return, but one does not have periodic blowups then I’ll go with that one. Of course, there are other factors to consider (such as the above).

The Vanguard Developed Markets Index Fund (Admiral Shares) (symbol VTMGX) and the Vanguard FTSE Developed Markets ETF (symbol VEA) are two of the largest and most popular international stock index funds. Some compare VTMGX vs VEA 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

VTMGX and VEA 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, VTMGX and VEA are not two funds pursuing an identical strategy; they are the same fund!

Historical Performance: VTMGX vs VEA

VTMGX was launched on August 17, 1999, and VEA was launched on July 7, 2007. Since that time, performance has been identical: 2.37 vs 2.36% annually. Despite changes in fees and expenses over the past 15 years, the cumulative difference in performance over that time period is only .25%! Looking at the chart of VTMGX vs VEA below, it is obvious that they are identical.

Differences Between VTMGX and VEA

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 VTMGX or VEA. However, only VEA is free to trade in non-Vanguard accounts.

There is a bid-ask spread when trading ETFs, but this spread is typically less than .02% for VEA and individual investor trades will not generally be large enough to “move” the market. In the case of VEA, 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, VEA is able to extend its tax benefits to VTMGX.

VTMGX has never paid a capital gain distribution! A previous version of the “investor” share class (VDMIX, which preceded VDVIX) has paid capital gains distributions in the past, but not since 2007 (the year that VEA was launched). I noticed some posts on the internet saying that VEA is more tax-efficient than VTMGX, but this incorrect.

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 VTMGX. If all ETFs, I might lean more towards VEA.

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

VTMGX 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 VEA 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: VTMGX vs VEA

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

The Vanguard 500 Index Fund (Admiral Shares) (symbol VFIAX) and the Vanguard S&P 500 ETF (symbol VOO) are two of the largest and most popular S&P 500 index funds. Some compare VFIAX vs VOO 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

VFIAX and VOO 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, VFIAX and VOO are not two funds pursuing an identical strategy; they are the same fund!

Historical Performance: VFIAX vs VOO

VFIAX was launched on November 13, 2000 and VOO was launched a few months later on September 7, 2010. Since that time, performance has been identical: 13.45 vs 13.46% 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 VFIAX vs VOO below, it is obvious that they are identical.

Differences Between VFIAX and VOO

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 VFIAX or VOO. However, only VOO 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 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). 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, VOO is able to extend its tax benefits to VFIAX.

VFIAX has never paid a capital gain distribution, although the older “Investor” share class (symbol VFINX) did pay out capital gains distributions prior to VFIAX’s launch in 2000. I noticed some posts on the internet saying that VOO is more tax-efficient than VFIAX, but this incorrect.

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 VFIAX. If all ETFs, I might lean more towards VOO.

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

VFIAX 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 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: VFIAX vs VOO

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

The Vanguard Total International Stock Index Fund (Admiral Shares) (symbol VTIAX) and the Vanguard Total International Stock ETF (symbol VXUS) are two of the largest and most popular international stock index funds. Some compare VTIAX vs VXUS 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

VTIAX and VXUS 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, VTIAX and VXUS are not two funds pursuing an identical strategy; they are the same fund!

Historical Performance: VTIAX vs VXUS

VTIAX was launched on November 29, 2010 and VXUS was launched a few months later on January 26, 2011. Since that time, performance has been identical: 3.47% vs 3.43% annually. Despite changes in fees and expenses over the past decade, the cumulative difference in performance over that time period is less than .70%! Looking at the chart of VTIAX vs VXUS below, it is obvious that they are identical.

Differences Between VTIAX and VXUS

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 VTIAX or VXUS. However, only VXUS is free to trade in non-Vanguard accounts.

There is a bid-ask spread when trading ETFs, but this spread is typically less than .02% for VXUS and individual investor trades will not generally be large enough to “move” the market. In the case of VXUS, 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, VXUS is able to extend its tax benefits to VTIAX.

VTIAX has never paid a capital gain distribution! I noticed some posts on the internet saying that VXUS is more tax-efficient than VTIAX, but this incorrect.

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 VTIAX. If all ETFs, I might lean more towards VXUS.

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

VTIAX 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 VXUS 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: VTIAX vs VXUS

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

The Vanguard Total Stock Market Index Fund (Admiral Shares) (symbol VTSAX) and the Vanguard Total Stock Market ETF (symbol VTI) are two of the largest and most popular total market index funds in the world. Some compare VTSAX vs VTI not realizing that they are just two different share classes of the same portfolio; VTI is the VTSAX ETF equivalent.

A quick reminder that this site does NOT provide investment recommendations. Fund comparisons (such as this one) are not conducted to identify the “best” fund (since that will vary from investor to investor based on investor-specific factors). Rather, these fund comparison posts are designed to identify and distinguish between the fund details that matter versus the ones that don’t.

The Short Answer

Many investors ask whether VTI or VTSAX is better? The short answer is that VTSAX and VTI are different share classes of the same portfolio, which is made possible by Vanguard’s ETF share class structure. 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, VTSAX and VTI are not two funds pursuing an identical strategy; they are different share classes of the same fund.

That being said, investors should evaluate several factors before deciding whether to use VTSAX or VTI.

Historical Performance: VTSAX vs VTI

VTSAX was launched on November 13, 2000 and VTI was launched a few months later on May 24, 2001. Since that time, performance has been identical: 7.67% vs 7.68% annually. Despite changes in fees and expenses over the past 20 years, the cumulative difference in performance over that time period is less than 1%! Looking at the chart of VTSAX vs VTI below, it is obvious that they are identical.

Differences Between VTSAX and VTI

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 differences, but that is incorrect because they are the same fund!

Factors to Consider

Expenses

Some investors may point out that the expense ratios between Vanguard’s Admiral Shares and Vanguard’s ETFs differ. This is true, but it is also reflected in the net performance chart above. At a certain level, differences in expense ration do not matter. A small absolute difference (in basis points) is essentially meaningless (even if it appears large on a percentage basis) and is often smaller than the bid-ask spread (see transaction costs below). Expenses do matter, but I would not sweat infinitesimally small differences of one basis point (and they’ll show up in net performance anyways).

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 VTSAX or VTI. However, only VTI 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 VTI and individual investor trades will not generally be large enough to “move” the market. In the case of VTI, 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, VTI is able to extend its tax benefits to VTSAX, so VTSAX and VTI are equally tax-efficient.

VTSAX paid out a capital gain distribution at the end of 2000, the one year it existed before VTI was launched. VTSAX has never paid a capital gain distribution since then! I noticed some posts on the internet saying that VTI is more tax-efficient than VTSAX, but this incorrect. As the below history of distributions shows, things changed once VTI was launched in 2001.

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 VTSAX. If all ETFs, I might lean more towards VTI.

On this topic, investors should probably avoid using VTI and VTSAX as tax loss harvesting substitutes for one another since they could be considered “substantially identical” which would trigger a wash sale.

Tradability

VTSAX 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 VTI 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: VTSAX vs VTI

VTSAX and VTI are two different share classes of the same exact fund. However, investors should consider the above factors when deciding whether the mutual fund VTSAX or the ETF VTI is best for their personal situation.

The Fidelity S&P 500 Index Fund (FXAIX) and the Vanguard Total Stock Market Index fund (VTSAX) are two of the largest mutual funds in existence and easily two of the most popular among individual investors. FXAIX and VTSAX are the core of many investor portfolios and many investors compare FXAIX vs VTSAX in order to decide which should be the foundation of their portfolio.

The Short Answer

The main difference between FXAIX and VTSAX is that FXAIX is a large- and mid-cap ETF, while VTSAX is a total market mutual fund. Despite these differences, the total return between these two funds is nearly identical and I consider them interchangeable for all intents and purposes.

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

The Long Answer

Historical Performance: FXAIX vs VTSAX

FXAIX was launched on February 17, 1988, while VTSAX was launched on November 13, 2000. Since then VTSAX has outperformed by roughly .33% annually. This is most likely driven by small-caps’ relative outperformance initially, even though that trend has reversed during the past decade. Despite variations in the size factor performance over the decades, the long-term performance between these two funds is incredibly similar.

Differences between FXAIX vs VTSAX

The biggest difference between FXAIX and VTSAX is the market cap exposure of the funds. FXAIX tracks the S&P 500 index which includes mostly large-caps and some mid-caps, while VTSAX covers much more of the market by including more mid-caps and small-caps.

Geographic Exposure

Both FXAIX and VTSAX hold essentially 100% stocks, so I will not dig into country exposures or market classification here. For intents and purposes, the two funds have identical exposures.

Market Cap Exposure

FXAIX focuses on the S&P 500 index and so it mostly holds large-caps with a bit of mid-cap exposure. VTSAX tracks the broader CRSP US Total Market Index and so it owns many more mid-caps and small-caps, as of 11/30/2022. In other words, FXAIX is a large-cap vehicle, while VTSAX is a total market vehicle. That being said, due to market cap weighting, both funds are overwhelmingly influenced by the large-cap holdings.

	FXAIX	VTSAX
Large-Cap	84%	73%
Mid-Cap	16%	19%
Small-Cap	0%	9%

Sector Weights

The sector weights between FXAIX and VTSAX are nearly identical, as of 11/20/2022. The weights are within 1% for every single sector.

	FXAIX	VTSAX
Basic Materials	2.27%	2.51%
Consumer Cyclical	10.59%	10.66%
Financial Services	13.60%	13.79%
Real Estate	2.75%	3.45%
Communication Services	7.36%	6.80%
Energy	5.37%	5.31%
Industrials	8.69%	9.64%
Technology	23.60%	23.06%
Consumer Defensive	7.39%	6.75%
Healthcare	15.42%	15.17%
Utilities	2.96%	2.87%

Final Thoughts: FXAIX vs VTSAX

Both FXAIX and VTSAX are large, core funds sponsored and managed by Fidelity and Vanguard respectively. Although FXAIX is more of a large-cap ETF and VTSAX is a total market mutual fund, 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 VTSAX solely based on where my account is held. Despite these considerations, these two funds are very similar for all intents and purposes.