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New VG ETFs
Old 09-12-2010, 08:21 AM   #1
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New VG ETFs

ETFs that are the same as their mutual funds

New twist in the index fund-vs.-ETF battle - The Boston Globe


* S&P 500 (VOO)
* S&P 500 Value (VOOV)
* S&P 500 Growth (VOOG)
* S&P Mid-Cap 400 (IVOO)
* S&P Mid-Cap 400 Value (IVOV)
* S&P Mid-Cap 400 Growth (IVOG)
* S&P Small-Cap 600 (VIOO)
* S&P Small-Cap 600 Value (VIOV)
* S&P Small-Cap 600 Growth (VIOG)


Eventually there will be 19 new ETFs that have a lower cost than the MF equivalent.


https://advisors.vanguard.com/VGApp/iip/site/advisor/researchcommentary/research/article?File=IWE_NewsETFExpand

Video explaining it.

https://www.brainshark.com/brainshar...4454577&id=web

And if you have VG Brokerage account... apparently the trades are free.

https://personal.vanguard.com/us/ins...sions-05042010
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Old 09-12-2010, 08:54 AM   #2
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If money is taken from a MF and put into an ETF in lets say the S&P 500 fund or ETF does that create a taxable event?
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Old 09-12-2010, 09:06 AM   #3
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Originally Posted by 73ss454 View Post
If money is taken from a MF and put into an ETF in lets say the S&P 500 fund or ETF does that create a taxable event?
Interesting question. Not sure... but I suspect selling is a taxable event (in a taxable account).


This is probably something that advisers will use to manage portfolios (cheaply) and make more profit by lowering their cost.
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Old 09-12-2010, 09:20 AM   #4
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If money is taken from a MF and put into an ETF in lets say the S&P 500 fund or ETF does that create a taxable event?
It depends:
Converting a Vanguard Index Fund to an ETF without Paying Taxes
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Old 09-12-2010, 10:48 AM   #5
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And if you have VG Brokerage account... apparently the trades are free.
So... how's Vanguard's brokerage? And do they trade options?
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Old 09-12-2010, 11:34 AM   #6
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Thanks Martha, I can't seem to open your link up. Can you help?
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Old 09-12-2010, 12:16 PM   #7
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Originally Posted by 73ss454 View Post
Thanks Martha, I can't seem to open your link up. Can you help?

It opens for me so I don't know what is wrong. Anyway, the article quotes this from Vanguard (which you should of course check):
Shareholders of Vanguard stock index funds that offer Vanguard ETFs may convert their conventional shares to Vanguard ETFs of the same fund. This conversion is generally tax-free, although some brokerage firms may be unable to convert fractional shares, which could result in a modest taxable gain. (Bond ETFs do not allow the conversion of bond index fund shares to bond ETF shares of the same fund.)
Vanguard will charge $50 for each conversion. (This fee is waived for Flagship clients.) Your brokerage provider may charge an additional fee for this service. For more information, contact your brokerage firm, or call 866-499-8473.
Once you convert to Vanguard ETFs, you cannot convert back to conventional shares. Also, conventional shares held through a 401(k) account cannot be converted to Vanguard ETFs.



EDIT: I couldn't find this info on the vanguard site but I didn't look too hard. I did find this: " For more information about Vanguard ETF Shares, including information on converting conventional shares to Vanguard ETF Shares, call 866-499-8473."
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Old 09-12-2010, 12:20 PM   #8
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So... how's Vanguard's brokerage? And do they trade options?

It has been awhile since I used VG as a broker... I stopped when I sold all of our individual stocks. Right now I only use mutual funds and work directly with the fund companies. Back when I used them to buy/sell stock, they used a 3rd party for that service. At the time I think they used Pershing to clear trades. As far as I know you can trade most securities.

https://personal.vanguard.com/us/wha...rvices-account

I was not a frequent trader... but I did not have any problems with the it.
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Old 09-12-2010, 01:10 PM   #9
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Thanks Martha!
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Old 09-12-2010, 02:26 PM   #10
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And if you have VG Brokerage account... apparently the trades are free.
Confirmed with a purchase just now commission =$0.

The VOO expense ratio is listed at 0.06% - wow. Thanks for the tip, Chinaco.

I'm not sure if was necessary, but I was careful to use a limit order - the OTC bid /ask spread for after-hours trading is huge.

Quote:
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So... how's Vanguard's brokerage? And do they trade options?
Yes, they do trade options.
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Old 09-12-2010, 03:36 PM   #11
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I was not a frequent trader... but I did not have any problems with the it.
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Originally Posted by Htown Harry View Post
The VOO expense ratio is listed at 0.06% - wow. Thanks for the tip, Chinaco.
Yes, they do trade options.
Thanks. Vanguard has always annoyed me with its rock-bottom customer service and anti-trader attitude, but this may be different. And I like selling covered calls on shares I wouldn't mind rebalancing anyway.

I'm going to have to see how Vanguard does on matching three ETFs I'm holding with Fidelity now-- a Dow Dividend (DVY), a MSCI index (EFV), and a small-cap value (IJS). I can leave the Berkshire shares at Fidelity.
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Old 09-12-2010, 03:56 PM   #12
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So... how's Vanguard's brokerage? And do they trade options?
My guess is for occasional trading it's very good. If your the sort of trader that wants special trading software and maybe fairly sophisticated it may not work out.

I think that VG spreads are very good on a relative basis but not a lot of data there. I've used their brokerage for trading ETF's, almost all VG's ETF's. Nowadays I don't try to outguess the market i.e. I just place limit orders at the bid or ask. Executions are generally quick and painless. Sorry, I don't use options.
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Old 09-12-2010, 04:39 PM   #13
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I hope they cover the international stock indexes and domestic and international bond markets next.

Rock bottom cost and broad diversification.

The final category would be an ETF of ETFs covering several global risk based allocation strategies.
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Old 09-12-2010, 04:43 PM   #14
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Originally Posted by chinaco View Post
I hope they cover the international stock indexes and domestic and international bond markets next.
?
Vanguard already has lots of etf's in these areas. They've been covered for a while.

VEU, VSS, VEA, VWO, BND, etc.

Not an int'l bond fund unless it is in the new batch.
Nor an int'l value fund like EFV.
VBR is a replacement for IJS.

But if you want free trades of all ETFs, just switch to WellsFargo and abandon both Vanguard and Fidelity.
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Old 09-12-2010, 04:53 PM   #15
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?
Vanguard already has lots of etf's in these areas. They've been covered for a while.

VEU, VSS, VEA, VWO, BND, etc.

Not an int'l bond fund unless it is in the new batch.
Nor an int'l value fund like EFV.
VBR is a replacement for IJS.

But if you want free trades of all ETFs, just switch to WellsFargo and abandon both Vanguard and Fidelity.
By jove you're right!
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Old 09-12-2010, 05:24 PM   #16
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Interesting that every one of these ETF's are 50 bucks a share!!! How the heck did THAT happen??
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Old 09-12-2010, 05:24 PM   #17
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What I like about the Vanguard MSCI based funds and ETF's (like VTV, VOE, VBR -- large cap value, mid-cap value, small cap value) is the existence of actual index data going back to about 1992. You can get that on the MSCI site.

Is there any good index data for some years back for these new S&P indexes? Or are retail investors just suppose to imagine the new index behavior under various past markets? My first guess is the data exists but maybe is only available to subscribers of S&P services i.e. "professionals". But I'd prefer to be proved wrong on this.

Maybe this is a partial answer to my question. I find the iShares S&P Midcap Value 400 here iShares S&P MidCap 400 Value Index Fund (IJJ): Overview - iShares . When comparing the performance of IJJ (monthly returns Excel sheet) versus the Vanguard Midcap-Value fund (VOE or VMVIX), the total return for Mar-01 to Aug-10 is 177% for IJJ and 358% for VOE. For the last 12 months IJJ is up 9.8% versus 12.2% for VOE. Maybe this MSCI index is more value tilted then S&P? Why would I want S&P?

Another clue is that M* shows IJJ's centroid (in the style box) to be somewhat smaller cap but less valuey then VOE. VOE's centroid is squarely in the middle of their mid-value box.
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Old 09-13-2010, 07:04 PM   #18
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Originally Posted by Martha View Post
It opens for me so I don't know what is wrong. Anyway, the article quotes this from Vanguard (which you should of course check):
...
Vanguard will charge $50 for each conversion. (This fee is waived for Flagship clients.) Your brokerage provider may charge an additional fee for this service. For more information, contact your brokerage firm, or call 866-499-8473.

Martha, the article you quoted was from '07, I believe Vanguard doesn't charge the $50 conversion fee for non-Flagship clients anymore. Here is the current link (second question from the end):

https://personal.vanguard.com/us/content/Funds/FundsVIPERWhatAreVIPERSharesJSP.jsp

I'm not too impressed with their brokerage service. No problems with its execution or anything, just the slightly quirky interface. I trade *very* infrequently and the last time I executed a trade was when they were still using Pershing.
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Old 09-15-2010, 12:03 PM   #19
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VOO is going to have a tough time. SPY is the most actively traded ETF in the world, what's going to make VOO better? Seems to me a little late to the party in some aspects............
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Old 09-15-2010, 04:28 PM   #20
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VOO is going to have a tough time. SPY is the most actively traded ETF in the world, what's going to make VOO better? Seems to me a little late to the party in some aspects............

Good question.

If VOO shares are thinly traded, it could lead to a wider discount against the NAV...
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