Most Vanguard mutual funds, including VFIAX, have frequent-trading restrictions. Building an ETF portfolio: Is it even possible to diversify? Vanguard 500 Index Fund Admiral Shares (VFIAX) is the admiral version of the Vanguard S&P 500 ETF (VOO). It is not intended to be investment advice. Really Dumb Question - VOO vs. VFIAX. Actually VOO has expense ratio of 0.03% vs 0.04% for VFIAX - source Vanguard. Is it acceptable to email an author to ask for a copy of his book that is currently out of print? In terms of performance, VOO outperforms VFINX with a compound annual growth rate of 12.09% to 12.00%. VFIAX holds the exact same securities as VFINX but has a lower expense ratio and a lower minimum investment.

It does not matter much as both are very low and the differential is just 0.01%. Can I rollover some of my Roth 401(k) into my Roth IRA even if I'm still employed? Hadn’t really considered the compounding effect of tax drag before. By using our site, you acknowledge that you have read and understand our Cookie Policy, Privacy Policy, and our Terms of Service.

I am trying to decide whether it is worth it to convert over my VOO shares to VFAIX shares. If This Was Helpful Share It With Your Friends Using The Social Buttons Below ⇓. VOO also has a lower expense ratio than VFINX at 0.03% vs. 0.14%. You would have essentially tripled your money within 10 years. After keeping fees to a minimum, you can work on increasing your savings rate and prioritizing your investments. VOO and VFIAX seem like a basically same thing except one being ETF and another being VFIAX.

This results in a “tax drag” of your portfolio which is a reduction of potential income because of taxation. Save my name, email, and website in this browser for the next time I comment. VFIAX is largely made up … Vanguard Growth Index Fund Admiral Shares (VIGAX) is the admiral version of the Vanguard Growth ETF (VUG). There are no taxes on transactions within an IRA (Traditional or Roth), so that's not something you need to consider. First, we’ll look at the annual returns of both funds, followed by a side-by-side comparison of both funds’ cumulative performance over the years. Why would I pick a specific ETF over an equivalent Mutual Fund? you can't (easily) buy more of it for 30 days, There are ways around that restriction, however, Should we ask to lower our close and reopen votes threshold to 3 (from 5?). Vanguard 500 Index Fund Admiral Shares (VFIAX) is the admiral version of the Vanguard S&P 500 ETF (VOO). VOO also has a lower expense ratio than VFINX at 0.03% vs. 0.14%. My next contribution will put me over $10,000 allowing me to purchase VFIAX. This is fairly common and right in line with the volatility of the domestic market in recent years. How do I renew LetsEncrypt certificates for a wildcard domain via HTTP challenge? A $10,000 investment in VFINX would have resulted in $29,065 with a CAGR of 12.00%. Making statements based on opinion; back them up with references or personal experience. If you’d rather enjoy the simplicity and flexibility of an exchange-traded fund, pick VOO. Recession Investment Plan: A Simple Guide To Thrive In A Bear Market, Escape The Rat Race With This Simple Guide, Barista FIRE: Everything You Need To Know, Financial Minimalism: How To Declutter & Simplify Your Finances. I get a lot of questions about which Vanguard Admiral Fund is the best investment. FNILX is a mutual fund while VOO is an ETF, although I'm unclear as to just how much of a difference this distinction will make with regards to returns considering both attempt to track the S&P 500 (and thus … 87.8% of VOO and VFINX are large-cap companies and the remaining ~12% are mid-cap stocks. So, either option is a great investment for financial independence. Both funds are excellent choices for us as index fund investors. Compared to VOO that is just a little bit lower. VOO, however, remains open. And as a result, VFINX’s cumulative performance lags behind by $238. All information on this site is for informational and educational purposes only. Similar ETF Distribution (w/ REIT), Vanguard Mutual Funds — Diversification vs Share Class.

The fund, as of April 30th, 2020, has $496.3 billion in total net assets. They are both Admiral Shares Funds with very low expense ratios. Thank you! This will give us some insight into whether these funds are suited for a long-term portfolio. By taxable account, I mean any regular brokerage account. VOO has an annual volatility of 13.13% (3.79% monthly). When it comes to industry exposure, the same is true as above: VOO and VFINX are exposed to exactly the same industries since the hold the same securities. Will window shrink-wrap make a noticeable difference in heating bill in house with single-paned windows? This index is comprised of the 500 largest U.S. companies weighed by market-cap. They are well-diversified large-cap funds suited to the long term investor, such as VOO and VFINX. VOO and VFINX are both issued by Vanguard. mrmarvinallen.com is not a registered investment or financial advisor. This is nearly five times as high as that of VOO. This perhaps gives rise to difference in volatility between VOO and VFINX. By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy. On this blog, I share thoughts and ideas on Personal & Financial Freedom. One of the main differences between VOO and VFINX is that VOO is an ETF while VFINX is a mutual fund. Which type of course is the fastest for a 10km TT? If you are investing in a taxable account you can lower the “tax drag” of your portfolio by investing in funds that pay fewer dividends.