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Vanguard funds
Old 10-12-2015, 07:55 PM   #1
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Vanguard funds

I will be transferring a rollover IRA to Vanguard soon. I'm thinking about putting the money in VOO. Is there a reason I should put it in VTI or VTSAX instead? They all have a .05% expense ratio and are all 100% US equity funds so not sure it makes a difference.
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Old 10-12-2015, 08:03 PM   #2
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VGTAX?
The decision on where to put it depends on the rest of your overall asset allocation and what you are trying to accomplish. VTI has a broader set of stocks, VOO is just big ones (S&P 500).

Unless you've got some reason to want to concentrate on just the larger companies, VTI would be the logical choice (or choose VITSX or VTSAX (=Admiral Shares) for a mutual fund that has the same holdings and no bid/ask spread)
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Old 10-12-2015, 08:29 PM   #3
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VGTAX?
The decision on where to put it depends on the rest of your overall asset allocation and what you are trying to accomplish. VTI has a broader set of stocks, VOO is just big ones (S&P 500).

Unless you've got some reason to want to concentrate on just the larger companies, VTI would be the logical choice (or choose VITSX or VTSAX (=Admiral Shares) for a mutual fund that has the same holdings.
Sorry, I meant VTSAX.
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Old 10-12-2015, 08:39 PM   #4
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I'd at least use VTI for a little better diversification. It's still about 81% S&P 500, but has all the smaller stocks as well. Even better, I benchmark against VT, Total World. All U.S. stocks is probably OK, but still not very diversified.
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Old 10-12-2015, 08:40 PM   #5
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Originally Posted by aaronc879 View Post
I will be transferring a rollover IRA to Vanguard soon. I'm thinking about putting the money in VOO. Is there a reason I should put it in VTI or VTSAX instead? They all have a .05% expense ratio and are all 100% US equity funds so not sure it makes a difference.
Just a comment.

Most of the folks that post here do not take time to memorize ticker symbols (VOO). IF you quote the name of the fund/ETF you will probably get more responses to your inquiry.
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Old 10-12-2015, 09:05 PM   #6
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I'd at least use VTI for a little better diversification. It's still about 81% S&P 500, but has all the smaller stocks as well. Even better, I benchmark against VT, Total World. All U.S. stocks is probably OK, but still not very diversified.
So VTI(Total US Equity) is slightly more volatile but should have slightly better returns long-term than VOO(S&P 500 index),right? VTI is 3500 US stocks, that seems diversified enough to me.
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Old 10-13-2015, 07:36 AM   #7
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So VTI(Total US Equity) is slightly more volatile but should have slightly better returns long-term than VOO(S&P 500 index),right? VTI is 3500 US stocks, that seems diversified enough to me.
>>> Slightly better returns long-term

I think that's right, as long as your definition of long term is not just 5 or 10 years. For example,

Cap Large Small

1980s 17.5% 15.8%
1990s 18.2% 15.1%

I got these statistics from some retirement planning training I took, and I have no reason to believe they are not correct. I don't have similar statistics for mid-cap.

Small caps, mid caps and large cap comprise the total market. Over that 20 year stretch the total market probably did not do as well as the large cap S&P 500. I noticed this in my own portfolio in the 90s when I had both the S&P500 and Total Stock Market funds for many years.
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Old 10-13-2015, 08:45 AM   #8
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Originally Posted by aaronc879 View Post
I will be transferring a rollover IRA to Vanguard soon. I'm thinking about putting the money in VOO. Is there a reason I should put it in VTI or VTSAX instead? They all have a .05% expense ratio and are all 100% US equity funds so not sure it makes a difference.
Again, the "right" place to invest this money depends on what purpose it serves in your overall asset allocation picture. For example, if you have other non-IRA accounts, it can make better sense to use some of your IRA "space" for tax inefficient holdings (like bonds), in that case none of the options you've listed would be your first (or only) choice. Conversely, if you have only these IRA rollover funds, then most people would not choose to invest it all solely in equities (US or foreign). If a person were looking for a single fund to invest a lump like that, then a Target Date Retirement Fund, Wellesly/Wellington, or other balanced fund would be a choice that can be expected to give more return for each unit of risk.
If you are just asking the narrow question "I want to invest in US equities in my IRA, is VOO, VTI, or VTSAX best?", then the answer solely depends on what you want: large caps or a broader basket of holdings. I'd recommend a slightly broader basket of holdings (e.g. VTI or VTSAX) unless you've got some reason to concentrate on large caps (e.g. you already have 25% of your investments in Vanguard Extended Market).
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