vanguard etf vs mutual fund reddit

https://www.whitecoatinvestor.com/implementation-of-my-asset-allocation-an-update/, https://www.whitecoatinvestor.com/150-portfolios-better-than-yours/. A few comments about change: Changes in ERs, investment products ( ETFs, robos) will continue to happen over the next 60 years of your investment life. I think you can now see why the Vanguard Total Stock Market Index Fund is my favorite mutual fund and my largest individual holding. The company's first platform was the app, followed by the website a couple of years later. What do you think? 3% EM Value But while reading this post for something unrelated and saw this comment, it reminded me of the dry powder post from a couple of days ago. As the data above shows, at least historically, all of this has come for free as simply accessing better-managed funds in the various asset classes (not included in Vanguard’s estimates) has more than paid for an advisor’s fee. Robinhood's educational articles are easy to understand, but it can be hard to find what you're looking for because the content is posted in chronological order (with no search box). Alas/happily, my 401k is in a Vanguard target date fund. Beware of using these stats for modeling (ahem, ahem…Dave Ramsey with your 12% growth stock return). We need to separate out two arguments here that you’re conflating. DFA Int’l Small Value is a close second, with similar relative results compared to VGTSX. Russell 1000 Value = 6.7%, DFA US Microcap = 10.7% So you should not be surprised that when you adjust the data for taxes, that TSM looks even better than its peers. In the past, a tilted portfolio has outperformed a whole market portfolio. Enter company name. Mutual fund transactions, on the other hand, settle at the end of each trading day. Accessed June 12, 2020. Great post! That means it beat 80% of mutual funds in its category. There's an aggregate limit of $250 million for all clients. Robinhood's technical security is up to standards, but it's lacking the excess SIPC insurance. # 1 Vanguard vs DFA I am surprised at your comments with regards to the scientific method. But the process I use to select mutual funds leads to excellent long-term performance, the only kind I actually care about. Vanguard. Your email address will not be published. Paul Merriman 4 Fund Portfolio ETF Pie for M1 Finance M1 Finance is a great choice of broker to implement the Paul Merriman 4 Fund Portfolio because it makes regular rebalancing seamless and easy, has zero transaction fees, and incorporates dynamic rebalancing for new deposits. Vanguard’s went to 0.04 a couple months ago, but Schwab is still cheaper by a basis point. Vanguard's ETF fees may be lower than mutual fund fees for some accounts, so take a look at both before investing. 1-2% has happened in some asset classes, asset classes which in a reasonable balanced portfolio account for a relatively small percentage. Not a fan but you could certainly do worse. Do you end up paying a higher expense ratio or a fee to work with an advisor that gets you access to a DFA fund? "Lessons." Behavior matters more than expenses. Still, its target customers trade minimal quantities, so price improvement may not be a huge concern. All three are trying to pull off elaborate hoaxes. Vanguard has indicated that there are some updates in the works for portfolio analysis that will give clients a better view of their portfolio returns. Thanks! Have really been wanting to get VTSAX, but on a Resident’s salary I don’t have 10k saved up to invest. Any comments on American Funds? I recently opened a brokerage account for my son and bought vtsmx after reading your “how to pick a mutual fund” post. Vanguard charges $0 commissions for online equity, options (there's a $1 per contract fee), OTCBB, and ETF trades for U.S.-based customers. Robinhood supports a limited number of order types. To call I confess that I play favorites. When you look at more core asset classes like a TSM like fund, DFA certainly doesn’t add enough value to over come their costs and those of the advisor, much less add 1-2%. Let's take a look (all data in this post taken on the date it was written- 1/26/2017.) Can you sleep at night as 25% of your savings seem to vanish with no end in sight? Larger than Sweden's GDP. Robinhood. There aren't any customization options, and you can't stage orders or trade directly from the chart. Dumping it all in US TSM though, as a lot of recency-biased DIYers are gravitating towards today? About your claim: “When you have half a trillion dollars you can benefit from some sweet economies of scale. So choosing one fund over another for 1 basis point in ER is just bizarre. Investor shares now have an expense ratio of 0.14%. Accessed June 12, 2020. Reference: https://www.vanguard.com/pdf/ISGQVAA.pdf, “In creating the Vanguard Advisor’s Alpha concept in 2001, we outlined how advisors By the way, if we only want to look at the historical returns to a Total Stock Index mix, a tilted portfolio using DFA funds, and the same tilted asset allocation using Vanguard Index Funds as well, you can see about 20 years of data here (further quantifying #1 and #2 above): The DFA tilted portfolio outperformed the Total Market mix by 2.8% per year and beat the Vanguard tilted portfolio by 1.7% per year. 14% small blend (TSM = 3%) Be sure to read the lengthy comments section for many more opinions than mine on your common question. Since it just buys all the stocks, those stocks never leave the index so there isn't any rapid-fire buying and selling like you see in an actively managed fund (and to a lesser extent, in an index fund that only covers a small portion of the market.). Robinhood. Chose an investment vehicle that constrains your behavior. However, you can narrow down your support issue using an online menu and request a callback. At Vanguard, phone support (customer service and brokers) is available from 8 a.m. to 10 p.m. (Eastern) Monday through Friday. There's no live chat, but you can send a secure message from the website. On Twitter, Vanguard typically responds to queries within an hour or so. Founded in 2013, Robinhood is a relative newcomer to the online brokerage industry. Its claim to fame is commission-free investing, with free trades in stocks, ETFs, options, and cryptocurrencies. Of course, with a growing list of brokers now moving to commission-free trading, the company may have lost that edge. Techcrunch. I have been telling family and friends THIS for years. Thanks. "Information about your Vanguard account," Page 1. “The usual error with the Vanguard to DFA tilted comparison is to put the same % of the portfolio into a SV fund. I wouldn’t want to base 15% of my wealth on “this time is different.”, * This is not a typical mutual fund and is more of an index fund(not actively traded). Expert Fund Picks; Banking and Borrowing. We see that it made 12.66% in 2016, 14.62% (per year) from 2012 to 2016, and 7.23% from 2006 to 2016 (which included the greatest bear market in our generation.) Vanguard. A regular market order suffices to buy and sell ETF shares. If you were sitting on your dry powder in 2017 due to high PE’s, you would have watched a lot of gains pass you by. The Vanguard Total Bond Market ETF (BND) is one of the most popular bond funds out there, with over $275 billion in assets. hand holding, and the the rest is from buying funds with lower fees, appropriate rebalancing, asset location and drawdown strategy. The first 2 factors have underperformed over the last 4 years. Robinhood. It is still my favorite mutual fund and I suspect I will own it until the day I die. TSM essentially doesn't have any tracking error. That’s all…. WRT the OP, I’ve compared VCTLX, which I’ve used for 25 years in one of my taxable accounts. "Order types & how they work." Okay sounds good. Accessed June 12, 2020. Robinhood. I have both Vanguard and Schwab accounts and find that I use Schwab predominantly due to the lower ERs. 10% US SV wealth management via financial planning, discipline, and guidance, rather than by trying "Win The Stock Market With Crowdsourced Advice From New App Robinhood." Despite the fact that their returns are annualized, they actually label them “average”. As we all know a fraction of a percent over 30 years makes a large difference. I have been a lifecycle fund guy for the last five years that I have been in residency (after reading Ramit Sethi’s book that my brother gave me when I graduated med school). Vanguard doesn’t help though. My question is, why is only part of your retirement investment in vtsax? The difference was 1.2% per year in favor of the version implemented with DFA funds 9.2% vs 8.0%). Mutual Fund and ETF data provided by Refinitiv Lipper. Larger than Chile and Finland combined. I would also like to set up a 529 (my account but nephew as beneficiary) , UGMA/UTMA (as he pays no tax until kiddie tax kicks in), and HSA (not at sure if this is possible for him). Check this out from the most recent semiannual report: See that “number of stocks” line? I made that very clear. You can own the equivalent of every publicly traded company in the most economically successful country in the world for free and buy and sell it online in 10 seconds, for free. Do skiers love powder? The average across all 11 funds, assuming a well-balanced asset allocation, was +1.2% per year in favor of DFA. 28% of my portfolio is in VTSAX, so every basis point counts. Jim, your posts are so great. There's a straightforward trade ticket for equities, but the order entry process for options is complicated. What’s more, putting double the portfolio in SV increases tracking error and reduces the likelihood that a DIY investor will stay the course compared to a plan with more assets in LC stocks. Certainly don’t reinvest dividends or send any new money into those funds. 3,650. Thank you. It takes very little investment knowledge, no skill, practically no time or effort-and outperforms about 80 percent of all investors. ), As you can see, at the 10 and 15 year mark, TSM is beating 93-94% of its peers, almost 19 out of 20. Is this something you would recommend doing? If you plan on investing less than $10,000 and need to invest in the Investor shares because you can’t make the minimum investment for Admiral Shares, then you can invest in the ETF and get the lower expense ratio. You get great prices on your trades. You get great prices on your trades.” When you have half a trillion dollars you can benefit from some sweet economies of scale. I would eventually switch to VTSAX once I have enough money. Of course all of vanguard’s main funds are perfect for the long term. This post talks about some of the reasoning of my previous asset allocation. Any tax deferred account ( your Roth) can be changed with no tax consequences. So yea, when small/value wins (as it has historically), the smaller and more valuey the better. My Roth IRA and taxable accounts are entirely invested in FFNOX (which is Fidelity’s 4 in 1 fund that includes their 500 Index Fund and Extended Market Index Fund) and I’ve just kept adding to it since I’m happy with that asset allocation. We established a rating scale based on our criteria, collecting over 3,000 data points that we weighed into our star scoring system. A close friend recommended VTI so I did invest into this a couple weeks ago. "Account protection information." Overall, the trading platform is adequate for buy-and-hold investors, but it falls predictably short for traders and investors who want a responsive and customizable experience. 1-2% a year DFA advantage is extremely optimistic in my view. Aggregate Float Adjusted Index. Reddit– r/robinhood. Hi everyone. I have owned it via three different brokerages and have owned all three “retail” share classes (Investor in my Vanguard Individual 401(k), Admiral in Vanguard Roth IRAs, and the ETF in my Schwab 401(k) and HSA Bank/TD Ameritrade HSA.) Which one of these looks better diversified? I own both in various accounts depending on which is cheaper for that account. For example, on the Vanguard platform, can easily exchange one Vangaurd mutual fund for another Vanguard mutual fund, but I cannot exchange for a mutual fund from another broker. Sure, I guess 500 stocks is pretty diversified. In a passive ETF, the investments it holds are chosen to mimic the performance of the index or sector it’s tracking. I found the reference for the 3% value add, and I think it deserves some qualification. I have a roth that I am trying to figure out where to put that money, should I put it all ($ 5,500) into VTSAX ?? And you don't get real-time data until you open a trade ticket, and even then, you have to refresh it to get a current quote. Here's what they have to say: Morningstar considers TSM to be a “large blend” fund, which is reasonable if you plot out its holdings. Let’s look at a standard US Equity split: 33% DFA US Enhanced Large Cap (S&P 500), 33% DFA US Large Value, 17% DFA US Microcap, 17% DFA US Small Value. Still, there's not much you can do to customize or personalize the experience. I have ~6k I can easily invest, without dipping into my Emergency fund, and plan to invest an additional few thousand per year during Residency. I was around for 2009, and don’t really count any of those short term drops to be the second dip. (.15 vs .04). So put what you can into a SEP and just convert it to a Roth IRA. Accessed June 12, 2020. That being said, the 10/15-year behavior gap on the Vanguard Lifestrategy funds is about 1% a year, so even those well-read Vanguard investors who know to diversify and save on costs are losing 100bps a year on average over time. My 401k holds a Russell 1000 fund but I will roll and convert it to my Roth IRA soon after I leave my job. The SCHB ETF (Broad US stock market ETF) has an ER of 0.03, while Vanguard is 0.05. Apple. Accessed June 12, 2020. In our 2020 Best Online Brokers reviews, Robinhood earned higher scores than Vanguard in our Best Stock Trading Apps, Best for Options, and Best for Day Trading categories. Only US LC and REITs are the “1% to 2% exception.” Looking at balanced portfolios (20% US LC, 20% US LV, 10% US SC, 10% US SV, 10% REITs, 10% Int LV, 5% Int SC, 5% Int SV, 3% EM LC, 3% EM Value, 4% EM SC) of DFA funds and indexes since 1999 using above returns: …and, again, this difference is on top of the additional value Vanguard found.

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