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Old 09-03-2017, 11:33 AM   #41
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If you do go etf route be sure to only buy larger funds. Thinky traded or smaller funds have too many potential issues with nav, especially in crisis

For vanguard admiral and etf are the same when buying from vanguard. Outside of vanguard i would lean etf because of the capital gains tax issues.
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Old 09-03-2017, 02:14 PM   #42
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etf's generally have their own sets of issues as compared to open ended funds .

they can be more volatile because they can be sold short .

they can sell at premiums or discounts to nav as well as spreads

bond funds generally have bigger spreads than stock funds .

etf's can have issues in fast plunging markets .

quite a few popular ones like DVY had terrible imbalances in the flash crash after brexit . DVY and a few others were down 35% while the underlying shares were down just 5% and orders were sold out at those levels .

it took a couple of minutes for things to balance out and recover
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Old 09-03-2017, 02:37 PM   #43
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Between an MF and an ETF of the same composition, I prefer the ETF for all reasons previous posters mentioned.

I get free trades at my broker for ETF but not some MF. I also like to know exactly at what price the transaction takes place, compared to the closing price which I do not know when placing the order. In the long run it all averages out, but knowing the exact real-time price is a freebie so why not?

Finally, I can sell options on my ETF shares to get a bit more return, or to force myself to divest of some to reduce overweight of some sectors.

PS. Weird things during flash crashes do not bother me because I use only mental stops.
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Old 09-03-2017, 03:34 PM   #44
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Originally Posted by OldShooter View Post
Why obsess over this? Just make the most favorable assumption, file your taxes and wait. In the extremely unlikely event that you get audited you'll get your question answered. And since you filed in good faith, it seems like penalties would be unlikely.

My CPA once told me: "If you don't get audited once in a while, you're not trying hard enough." I never have been audited, so I don't know what that says about me.
You're missing the point. I don't want to keep track of this myself; I want Vanguard to do it. I want to know how they handle basis on ETF conversion, because if they don't do it how I want, I can't convert back, so I'm stuck with either accepting less favorable terms, or doing it myself.

If I do it myself and file a fund sale with a different basis than what Vanguard reports for covered shares, I'm just asking for an audit or a letter. This is a very easy thing for them to automate without doing an audit. It's not like uncovered shares where the basis isn't reported. Maybe you think it would be a fun exercise. I've been through it (getting letters for things like my schedule D not matching 1099 sales), and it's not always simple and easy to correct. Why would I want to deal with that?

So you say Just try it? That's the worst answer I've had on my question.

I'm not obsessing. I've decided, I'm not going to convert.
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Old 09-03-2017, 04:18 PM   #45
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We only own ETFs, mainly to avoid year-end CG distributions and because ERs are generally lower compared to an equivalent mutual fund. Bid/ask spreads are not much of an issue for us because we only own very large, highly liquid ETFs and don't trade except occasional rebalancing. Also, we like Vanguard ETFs but prefer housing all our accounts at Fidelity for the excellent service, tools, and website. We own a mix of Vanguard and iShares ETFs. iShares ETFs trade free at Fidelity while Vanguard ETFs incur a $4.95 trading commission. Vanguard mutual funds would be quite costly to trade.
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Old 09-03-2017, 05:01 PM   #46
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You're missing the point. I don't want to keep track of this myself; I want Vanguard to do it. I want to know how they handle basis on ETF conversion, because if they don't do it how I want, I can't convert back, so I'm stuck with either accepting less favorable terms, or doing it myself.

If I do it myself and file a fund sale with a different basis than what Vanguard reports for covered shares, I'm just asking for an audit or a letter. This is a very easy thing for them to automate without doing an audit. It's not like uncovered shares where the basis isn't reported. Maybe you think it would be a fun exercise. I've been through it (getting letters for things like my schedule D not matching 1099 sales), and it's not always simple and easy to correct. Why would I want to deal with that?

So you say Just try it? That's the worst answer I've had on my question.

I'm not obsessing. I've decided, I'm not going to convert.

AND THE ANSWER IS !

i just did a vanguard fund to etf conversion last week . i just looked and clicked on cost basis on the new etf.

a box comes up with drop down choices in basis and says :
------------------------------------------------------------------------------------
You haven't established a cost basis method for 1 holding
Unless you specify a cost basis method for a holding, the basis of that holding will be determined under Vanguard's default method. Our default for mutual fund shares is average cost; for all other securities, the default is first in, first out (FIFO). You can change your methods at any time. Selecting your cost basis method now can speed up future transactions because we'll already know the method you'd like to use for those transactions
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Old 09-03-2017, 05:51 PM   #47
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Originally Posted by mathjak107 View Post
AND THE ANSWER IS !

i just did a vanguard fund to etf conversion last week . i just looked and clicked on cost basis on the new etf.

a box comes up with drop down choices in basis and says :
------------------------------------------------------------------------------------
You haven't established a cost basis method for 1 holding
Unless you specify a cost basis method for a holding, the basis of that holding will be determined under Vanguard's default method. Our default for mutual fund shares is average cost; for all other securities, the default is first in, first out (FIFO). You can change your methods at any time. Selecting your cost basis method now can speed up future transactions because we'll already know the method you'd like to use for those transactions
That doesn't answer the question I had at all, but I don't care anymore. If someone else cares they can follow up.
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Old 09-03-2017, 07:02 PM   #48
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isn't your question about setting the carried over cost basis ? the funds cost is carried over .
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