The Vanguard Pacific Index Fund (Admiral Shares) (symbol VPADX) and the Vanguard FTSE Pacific ETF (symbol VPL) are two of the largest and most popular Australasia-focused index funds. Some compare VPADX vs VPL 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. 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

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

Historical Performance: VPADX vs VPL

VPL was launched on March 4, 2005, while VPADX was launched on August 13, 2001. Since the common inception date (the latter of the two inception dates), performance has been nearly identical: 4.07% vs 4.12% annually. Despite changes in fees and expenses over this time period, there is only about a 1.5% difference in cumulative performance since inception! Looking at the chart of VPADX vs VPL below, it is obvious that they are identical.

Differences Between VPADX and VPL

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.

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 (and they’ll show up in net performance anyways).

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 VPADX or VPL. However, only VPL 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 VPL and individual investor trades will not generally be large enough to “move” the market. In the case of VPL, 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, VPL is able to extend its tax benefits to VPADX. A more in-depth explanation of Vanguard mutual fund tax-efficiency can be found here.

VPADX has never paid a capital gain distribution! I noticed some posts on the internet saying that VPL is more tax-efficient than VPADX, 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 VPADX. If all ETFs, I might lean more towards VPL.

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

VPADX 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 VPL 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: VPADX vs VPL

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

The Vanguard Long-Term Treasury Index Fund (Admiral Shares) (symbol VLGSX) and the Vanguard Long-Term Treasury ETF (symbol VGLT) are two of the largest and most popular long bond index funds. Some compare VLGSX vs VGLT 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. 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

VLGSX and VGLT 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, VLGSX and VGLT are not two funds pursuing an identical strategy; they are the same fund! Read more about Vanguard’s share class structure and the potential benefits.

Historical Performance: VLGSX vs VGLT

Both VGLT and VLGSX were launched in late 2009. Perhaps not surprisingly, performance has been nearly identical since their common inception date: 2.99% vs 2.96% annually. Despite changes in fees and expenses over that time period, the cumulative difference in performance over that time period is only about 50 basis points! Looking at the chart of VLGSX vs VGLT 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 occurred with many bond funds during the covid crisis, including some of Vanguard’s flagship bond funds. Interestingly, this is not what occurred with VGLT during that time. The below chart shows that VGLT began trading at a premium to VLGSX. Remember, these are simply different share classes of the exact same fund! However, VGLT trades at a market price and VLGSX is traded at a NAV.

These deviations are generally 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, although that does not appear to be the case with these two funds in March 2020.

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 VGLT value was closer to value of the underlying portfolio than the VLGSX NAV. Interestingly, holders of VGLT could have sold their holdings and rotated into VLGSX (which is the exact same portfolio) at a slight discount.

Differences Between VLGSX and VGLT

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

One additional consideration is that fixed-income ETFs are not quite as tax-efficient as equity ETFs. Both VLGSX and VGLT have made a capital gains distributions in the past. I noticed some posts on the internet saying that VGLT is more tax-efficient than VLGSX, 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 VLGSX. If all ETFs, I might lean more towards VGLT.

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

VLGSX 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 VGLT 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: VLGSX vs VGLT

VLGSX and VGLT 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 (even though that was not the case with VGLT and VLGSX during the covid crisis). If two options provide the same risk and return, but one does not have a higher risk of periodic blowups then I’ll go with that one. Of course, there are other factors to consider (such as the above).

The Vanguard Mid-Cap Growth Index Fund (Admiral Shares) (symbol VMGMX) and the Vanguard Mid-Cap Growth ETF (symbol VOT) are two of the largest and most popular mid-cap growth index funds. Some compare VMGMX vs VOT 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. 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

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

Historical Performance: VMGMX vs VOT

VOT was launched on August 17, 2006, while VMGMX was launched on September 27, 2011. Since the common inception date (the latter of the two inception dates), performance has been identical; both funds have returned 11.37% annually. Despite changes in fees and expenses over this time period, there is only a .05% difference in cumulative performance since inception! Looking at the chart of VMGMX vs VOT below, it is obvious that they are identical.

Differences Between VMGMX and VOT

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.

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 (and they’ll show up in net performance anyways).

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 VMGMX or VOT. However, only VOT is free to trade in non-Vanguard accounts.

There is a bid-ask spread when trading ETFs, but this spread is typically less than .05% for VOT and individual investor trades will not generally be large enough to “move” the market. In the case of VOT, 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, VOT is able to extend its tax benefits to VMGMX. A more in-depth explanation of Vanguard mutual fund tax-efficiency can be found here.

VMGMX has never paid a capital gain distribution! I noticed some posts on the internet saying that VOT is more tax-efficient than VMGMX, 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 VMGMX. If all ETFs, I might lean more towards VOT.

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

VMGMX 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 VOT 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: VMGMX vs VOT

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

The Vanguard Short-Term Treasury Index Fund (Admiral Shares) (symbol VSBSX) and the Vanguard Short-Term Treasury ETF (symbol VGSH) are two of the largest and most popular short-term bond index funds. Some compare VSBSX vs VGSH 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. 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

VSBSX and VGSH 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, VSBSX and VGSH are not two funds pursuing an identical strategy; they are the same fund! Read more about Vanguard’s share class structure and the potential benefits.

Historical Performance: VSBSX vs VGSH

Both VGSH and VSBSX were launched in late 2009. Perhaps not surprisingly, performance has been nearly identical since their common inception date: .72% vs .71% annually. Despite changes in fees and expenses over that time period, the cumulative difference in performance over that time period is only about 20 basis points! Looking at the chart of VSBSX vs VGSH 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 occurred with many bond funds during the covid crisis, including some of Vanguard’s flagship bond funds. Interestingly, this is not what occurred with VGSH during that time. The below chart shows that VGSH began trading at a premium to VSBSX. Remember, these are simply different share classes of the exact same fund! However, VGSH trades at a market price and VSBSX is traded at a NAV.

These deviations are generally 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, although that does not appear to be the case with these two funds in March 2020.

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 VGSH value was closer to value of the underlying portfolio than the VSBSX NAV. Interestingly, holders of VGSH could have sold their holdings and rotated into VSBSX (which is the exact same portfolio) at a slight discount.

Differences Between VSBSX and VGSH

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

One additional consideration is that fixed-income ETFs are not quite as tax-efficient as equity ETFs. Both VSBSX and VGSH have made a capital gains distributions in the past. I noticed some posts on the internet saying that VGSH is more tax-efficient than VSBSX, 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 VSBSX. If all ETFs, I might lean more towards VGSH.

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

VSBSX 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 VGSH 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: VSBSX vs VGSH

VSBSX and VGSH 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 (even though that was not the case with VGSH and VSBSX during the covid crisis). If two options provide the same risk and return, but one does not have a higher risk of periodic blowups then I’ll go with that one. Of course, there are other factors to consider (such as the above).

The Vanguard Mid-Cap Value Index Fund (Admiral Shares) (symbol VMVAX) and the Vanguard Mid-Cap Value ETF (symbol VOE) are two of the largest and most popular world index funds. Some compare VMVAX vs VOE 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. 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

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

Historical Performance: VMVAX vs VOE

VOE was launched on August 17, 2006, while VMVAX was launched on September 27, 2011. Since the common inception date (the latter of the two inception dates), performance has been identical: 12.01% vs 12.02% annually. Despite changes in fees and expenses over this time period, there is less than a half percent difference in cumulative performance since inception! Looking at the chart of VMVAX vs VOE below, it is obvious that they are identical.

Differences Between VMVAX and VOE

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.

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 (and they’ll show up in net performance anyways).

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 VMVAX or VOE. However, only VOE 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 VOE and individual investor trades will not generally be large enough to “move” the market. In the case of VOE, 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, VOE is able to extend its tax benefits to VMVAX. A more in-depth explanation of Vanguard mutual fund tax-efficiency can be found here.

VMVAX has never paid a capital gain distribution! I noticed some posts on the internet saying that VOE is more tax-efficient than VMVAX, 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 VMVAX. If all ETFs, I might lean more towards VOE.

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

VMVAX 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 VOE 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: VMVAX vs VOE

VMVAX and VOE 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 Index Fund (Investor Shares) (symbol VTSMX) are two of the largest and most popular total market index funds. Some compare VTSAX vs VTSMX 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. 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

VTSAX and VTSMX are different share classes of the same portfolio. VTSMX is closed to new investors, so it is not possible to buy unless you already own VTSMX.

If you already own VTSMX and are considering buying more, the decision to buy VTSMX or VTSAX depends on investor-specific factors (some of which are listed below). Additionally, Vanguard allows owners of many Investor Shares to convert their shares to Admiral Shares or ETF shares.

If you do not own VTSMX, then both VTSAX and VTI (the ETF share class) are options.

The Longer Answer

Vanguard offers multiple shares classes for many funds. The Investor Shares are being phased out and Vanguard is pushing the Admiral Shares and the ETFs now. In other words, VTSAX and VTSMX are not two funds pursuing an identical strategy; they are the same fund!

Historical Performance: VTSAX vs VTSMX

VTSMX was launched back 1992, while VTSAX was launched on November 13, 2000. Since that time, performance has been identical: 7.21 vs 7.31% annually. Despite changes in fees and expenses over the past 22 years, the cumulative difference in performance over that time period is only 10%! Looking at the chart of VTSAX vs VTSMX below, it is obvious that they are identical.

Differences Between VTSAX and VTSMX

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 Investor Shares differ. This is true, but it is also reflected in the net performance chart above. At a certain level, differences in expense ratio do not matter that much. In this case, the difference in annualized performance is equal to the difference in expense ratio. Since these funds are identical, I would most likely lean towards VTSAX although getting the allocation is more important than selecting the “right” fund.

Transaction Costs

Neither fund charges purchase or redemption fees, so they should be free to trade at Vanguard. 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 VTSMX. However, there will likely be a cost to buy or sell on other platforms.

Investors planning smaller allocations or expecting a lot of transactions may want to consider VTI, the ETF share class of this strategy.

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, both VTSAX and VTSMX benefit from VTI’s tax-efficient mechanisms.

Both VTSMX and VTSAX made capital gains distributions prior to VTI’s launch in 2001. However, neither fund has a made a capital gains distributions since then! As the below history of distributions shows, things changed once VTI was launched in 2001. In other words, VTSMX and VTSAX are equivalent in terms of tax efficiency.

Tax Loss Harvesting

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

As mentioned above, VTSMX is closed to new investors. So unless you already own VTSMX, you may want to consider VTSAX or VTI.

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 VTSMX

VTSAX and VTSMX are literally the same. However, investors should consider the above factors when deciding which one is best for them (if they are able to buy VTSMX at all).

The Vanguard Total International Bond Index Fund (Admiral Shares) (symbol VTABX) and the Vanguard Total International Bond Index ETF (symbol BNDX) are two of the largest and most popular international bond index funds. Some compare VTABX vs BNDX 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. 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

VTABX and BNDX 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, VTABX and BNDX are not two funds pursuing an identical strategy; they are the same fund! Read more about Vanguard’s share class structure and the potential benefits.

Historical Performance: VTABX vs BNDX

Both BNDX and VTABX were launched on May 31, 2013. Perhaps not surprisingly, performance has been nearly identical since that time: 1.56% vs 1.60% annually. Despite changes in fees and expenses over that time period, the cumulative difference in performance over that time period is on 40 basis points! Looking at the chart of VTABX vs BNDX 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 VTABX vs BNDX during the first half of 2020. BNDX declined over 6% (peak-to-trough), while VTABX “only” declined roughly 4%. Remember, these are simply different share classes of the exact same fund! However, BNDX trades at a market price and VTABX 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 BNDX value was closer to value of the underlying portfolio than the VTABX NAV. Interestingly, holders of VTABX could have sold their holdings and rotated into BNDX (which is the exact same portfolio) at a substantial discount.

Differences Between VTABX and BNDX

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

One additional consideration is that fixed-income ETFs are not quite as tax-efficient as equity ETFs. Both VTABX and BNDX have made a capital gains distributions in the past. I noticed some posts on the internet saying that BNDX is more tax-efficient than VTABX, 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 VTABX. If all ETFs, I might lean more towards BNDX.

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

VTABX 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 BNDX 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: VTABX vs BNDX

VTABX and BNDX 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 Total Stock Market Index Fund (Investor Shares) (symbol VTSMX) and the Vanguard Total Stock Market ETF (symbol VTI) are two of the largest and most popular total market index funds. Some compare VTSMX vs VTI not realizing that they are just two different share classes of the same portfolio; you can think of VTI as the VTSMX 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

VTSMX 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).

VTSMX is closed to new investors, so it is not possible to buy unless you already own VTSMX. Those who do not own VTSMX already may want to read our review of VTSAX vs VTI (the Admiral and ETF share classes respectively).

If you already own VTSMX and are considering buying more, the decision to buy VTSMX or VTI depends on investor-specific factors. Additionally, Vanguard allows owners of many Investor Shares to convert their shares to Admiral Shares or ETF shares.

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

Historical Performance: VTSMX vs VTI

VTSMX was launched in 1992 and VTI was launched on May 24, 2001. Since that time, performance has been nearly identical: 7.56% 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 only about 11%! Looking at the chart of VTSMX vs VTI below, it is obvious that they are identical.

Differences Between VTSMX 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 Investor 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). Since these funds are identical, I would most likely lean towards VTI although getting the allocation is more important than selecting the “right” fund.

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 VTSMX 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 VTSMX.

VTSMX last paid out a capital gain distribution at the end of 2000, the year before VTI was launched. VTSMX has not paid any capital gain distributions since then. I noticed some posts on the internet saying that VTI is more tax-efficient than VTSMX, but this incorrect as neither VTSMX nor VTI has paid a capital distribution in over 20 years.

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

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

As mentioned above, VTSMX is closed to new investors. So unless you already own VTSMX, you may want to consider VTSAX or VTI.

VTSAX has 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: VTSMX vs VTI

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

The Vanguard Consumer Discretionary Index Fund (Admiral Shares) (symbol VCDAX) and the Vanguard Consumer Discretionary ETF (symbol VCR) are two of the largest and most popular consumer discretionary sector index funds. Some compare VCDAX vs VCR 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. 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

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

Historical Performance: VCDAX vs VCR

VCR was launched on January 26, 2004, while VCDAX was launched on July 14, 2005. Since the common inception date (the latter of the two inception dates), performance has been nearly identical: 9.60% vs 9.58% annually. Despite changes in fees and expenses over this time period, there is only about a 2.5% difference in cumulative performance since inception! Looking at the chart of VCDAX vs VCR below, it is obvious that they are identical.

Differences Between VCDAX and VCR

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.

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 (and they’ll show up in net performance anyways).

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 VCDAX or VCR. However, only VCR is free to trade in non-Vanguard accounts.

There is a bid-ask spread when trading ETFs, but this spread is typically less than .06% for VCR and individual investor trades will not generally be large enough to “move” the market. In the case of VCR, 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, VCR is able to extend its tax benefits to VCDAX. A more in-depth explanation of Vanguard mutual fund tax-efficiency can be found here.

VCDAX has never paid a capital gain distribution! I noticed some posts on the internet saying that VCR is more tax-efficient than VCDAX, 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 VCDAX. If all ETFs, I might lean more towards VCR.

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

VCDAX does have a stated minimum initial purchase of $100,000, so that may be a factor for some investors looking to initiate a position. The minimum purchase size for VCR 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: VCDAX vs VCR

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

For those interested in non-Vanguard consumer discretionary ETFs, check out my comparisons of VCR vs FDIS or XLY vs VCR.

The Vanguard Utilities Index Fund (Admiral Shares) (symbol VUIAX) and the Vanguard Utilities ETF (symbol VPU) are two of the largest and most popular utilities sector index funds. Some compare VUIAX vs VPU 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. 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

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

Historical Performance: VUIAX vs VPU

VPU was launched on January 26, 2004, while VUIAX was launched on April 28, 2004. Since the common inception date (the latter of the two inception dates), performance has been identical: 9.69% vs 9.70% annually. Despite changes in fees and expenses over this time period, there is only about a one percent difference in cumulative performance since inception! Looking at the chart of VUIAX vs VPU below, it is obvious that they are identical.

Differences Between VUIAX and VPU

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.

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 (and they’ll show up in net performance anyways).

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 VUIAX or VPU. However, only VPU 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 VPU and individual investor trades will not generally be large enough to “move” the market. In the case of VPU, 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, VPU is able to extend its tax benefits to VUIAX. A more in-depth explanation of Vanguard mutual fund tax-efficiency can be found here.

VUIAX has never paid a capital gain distribution! I noticed some posts on the internet saying that VPU is more tax-efficient than VUIAX, 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 VUIAX. If all ETFs, I might lean more towards VPU.

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.” Investors may want to look to Fidelity’s ETF FUTY or State Street’s ETF XLU (read my comparison of FUTY vs VPU or XLU vs VPU).

Tradability

VUIAX does have a stated minimum initial purchase of $100,000, so that may be a factor for some investors looking to initiate a position. The minimum purchase size for VPU 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: VUIAX vs VPU

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