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

The Short Answer

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

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

The Long Answer

Historical Performance: FXAIX vs VOO

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

Differences between FXAIX vs VOO

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

Factors to Consider

Transaction Costs

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

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

Tax Efficiency & Capital Gain Distributions

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

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

Tax Loss Harvesting

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

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

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

Tradability

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

Final Thoughts: FXAIX vs VOO

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

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

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

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

The Short Answer

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

The Longer Answer

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

Historical Performance: VIMAX vs VO

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

Differences Between VIMAX and VO

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

Factors to Consider

Transaction Costs

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

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

Tax Efficiency & Capital Gain Distributions

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

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

Tax Loss Harvesting

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

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

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

Tradability

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

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

Final Thoughts: VIMAX vs VO

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

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

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

The Short Answer

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

The Longer Answer

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

Historical Performance: VHYAX vs VYM

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

Differences Between VHYAX and VYM

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

Factors to Consider

Transaction Costs

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

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

Tax Efficiency & Capital Gain Distributions

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

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

Tax Loss Harvesting

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

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

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

Tradability

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

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

Final Thoughts: VHYAX vs VYM

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

Further Reading

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

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

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

The Short Answer

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

The Longer Answer

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

Historical Performance: VDADX vs VIG

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

Differences Between VDADX and VIG

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

Factors to Consider

Transaction Costs

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

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

Tax Efficiency & Capital Gain Distributions

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

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

Tax Loss Harvesting

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

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

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

Tradability

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

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

Final Thoughts: VDADX vs VIG

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

Further Reading

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

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

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

The Short Answer

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

The Longer Answer

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

Historical Performance: VEMAX vs VWO

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

Differences Between VEMAX and VWO

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

Factors to Consider

Transaction Costs

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

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

Tax Efficiency & Capital Gain Distributions

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

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

Tax Loss Harvesting

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

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

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

Tradability

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

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

Final Thoughts: VEMAX vs VWO

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

Further Reading

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

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).