VFWIX is eligible for the foreign tax credit VGTSX is a fund of funds so does not get this credit.Recently I've seen arguments made that what you gain with the tax credit is about what you need to offset the difference in ER and with VFWIX ER dropping this year and many expect it to continue to decrease you will come out ahead with VFWIX in taxable. Many hold VFWIX in taxable and VGTSX in nontaxable as they can't claim the credit there anyway. Finally just to muddy the water a little more. There are rumblings that VG is trying to get away from the fund of funds with VGTSX so it would be eligible for FTC.
I believe VFWIX has exposure to Canada and VGTSX does not.
Many might argue these two are not substantially identical, but they are sure similar.
I highjacked a rainbow and crashed into a pot of gold - Bon Jovi