Is SPLG a good enough ETF for S&P500?

[UpQuark]

I like FXAIX, but I feel kind of frustrated by the way mutual funds trade, I think ETFs are more instant gratification and have the ability to set limit orders which I don't think mutual funds do (unless I just don't know how on Fidelity website).

It looks like SPLG is an S&P500 index ETF, so does that mean it will perform the same as FXAIX only with the added benefits of not having to wait until the day is over for the trade to complete?

Does anybody here have it, does it seem like a good ETF?

 

[pb4uski]

I don't own if but either SPLG or VOO would be suitable ETFs to replicate the performance of the S&P 500 index.

 

[Dean56]

If you want a S&P 500 ETF, why not buy SPY. It's the S&P 500 SPDR

 

[OldShooter]

... does it seem like a good ETF?

Good for what? Do you intend to day trade it?

 

[bobandsherry]

If you want a S&P 500 ETF, why not buy SPY. It's the S&P 500 SPDR

Agree with your suggestion for SPY

 

[MarieIG]

Here's a short comparison of S&P ETFs:

https://www.investopedia.com/investing/top-sp-500-etfs/

https://www.msn.com/en-us/money/oth...51987208ff5ac6&ocid=winp2fptaskbarhover&ei=13

 

[bobandsherry]

Here's a short comparison of S&P ETFs:



https://www.investopedia.com/investing/top-sp-500-etfs/

Nice .. but a whole lot of words which basically comes down to the same overall return, which is what should be expected by an EFT that mimics the SP500.

 

[UpQuark]

Good for what? Do you intend to day trade it?

No, I simply don't know if there are better or worse choices due to factors that I'm not aware of.

I just sold the funds that were in an IRA I inherited in 2015. They seemed to have bigger expense ratios than my own investments have (my parents investments had been managed by Edward Jones until I inherited and moved them to Fidelity).

I originally thought taking the required RMDs would exhaust the account and also I thought I didn't have any control over the particular investments, but since the total dollar amt has only dropped 10% after having taken 7 RMDs (skipped in 2020), and since I've learned more about investing (in any case I've learned there are no tax consequences to changes I make inside IRAs), I am feeling brave enough to try changing to low cost S&P500 positions.

 

[UpQuark]

Here's a short comparison of S&P ETFs:

https://www.investopedia.com/investing/top-sp-500-etfs/

And now from that link I've learned that Leveraged S&P 500 ETFs exist! Oh my, I wonder if it would be insane to put a couple hundred dollars in one. It seems kind of like gambling?

 

[MarieIG]

Nice .. but a whole lot of words which basically comes down to the same overall return, which is what should be expected by an EFT that mimics the SP500.

Those "whole lot of words" also mentioned the different expense ratios and liquidity.

 

[MarieIG]

And now from that link I've learned that Leveraged S&P 500 ETFs exist! Oh my, I wonder if it would be insane to put a couple hundred dollars in one. It seems kind of like gambling?

Don't feel rushed into doing something if you are not ready. I do hold ETFs - but long term, and they do go up and down . . .

 

[teej1985]

If you want a S&P 500 ETF, why not buy SPY. It's the S&P 500 SPDR

Because it unnecessarily costs extra $$ vs. almost every other S&P 500 ETF ?

 

[bobandsherry]

Those "whole lot of words" also mentioned the different expense ratios and liquidity.

Yes, and in the end it's basically a push. Some have higher fee, some have a better return and some have a better dividend. And the article fails to touch on one other variable, trading spread. If just a buy and hold then doesn't make a difference, if you do trades in the ETF then it also adds up. This article mentions that:

https://www.thestreet.com/etffocus/...ere-is-a-difference-between-these-sp-500-etfs

The hold period also makes a difference, according to this site (https://www.thestreet.com/etffocus/...ere-is-a-difference-between-these-sp-500-etfs) VOO has higher short term return but longer (5 year) SPY and IVV come out ahead and basically the same. Over 5 years basically $210 difference between the three, with IVV and SPY within $10 dollars of each other.



Bottom line, chose any as long term they pretty much a push. Maybe just a personal preference.

 

[bobandsherry]

Because it unnecessarily costs extra $$ vs. almost every other S&P 500 ETF ?

See post above, and due to difference in returns and fees it is basically a push.

 

[OldShooter]

As a long-term investor I have no interest in ETFs. To do a trade you have to cross or partially cross the bid/ask spread and if things get really exciting in the market the authorized participants (https://www.investopedia.com/terms/a/authorizedparticipant.asp) may decide to just sit on their hands and let the NAV diverge from the market. Neither of these is an issue with conventional mutual funds.

Really, the only thing that matters is the expense ratio. Managers often try to wring a little extra return by lending to short sellers (https://www.schwab.com/learn/story/earning-extra-income-with-securities-lending) but this can come and go and in any event it is not a major factor in the fund’s total return. Multiple Morningstar studies have shown that low fees is the only reliable predictor of good fund performance. (https://www.morningstar.com/funds/fund-fees-predict-future-success-or-failure)

 

[FREE866]

As a long-term investor I have no interest in ETFs. To do a trade you have to cross or partially cross the bid/ask spread and if things get really exciting in the market the authorized participants (https://www.investopedia.com/terms/a/authorizedparticipant.asp) may decide to just sit on their hands and let the NAV diverge from the market. Neither of these is an issue with conventional mutual funds.

Doesn't the better tax efficiency of ETF's over mutual funds supersede the negative effect of the bid/ask issue?

 

[OldShooter]

Doesn't the better tax efficiency of ETF's over mutual funds supersede the negative effect of the bid/ask issue?

In our case, no, because we're at a stage where everything is in tax-sheltered accounts.

So I haven't thought about the tax aspects much, but I wonder if this is an apples-vs-oranges question. Isn't the "tax efficiency" just a matter of timing? Tax paid now, tax paid later or maybe no taxes due at all if the position didn't make money? OTOH money lost crossing the spread is real money, really lost. And can you even look at that question as a general case since both taxes and the spread are specific to each situation? Thankfully I don't have to worry about this.

 

[RetiredAt49]

And now from that link I've learned that Leveraged S&P 500 ETFs exist! Oh my, I wonder if it would be insane to put a couple hundred dollars in one. It seems kind of like gambling?

My algorithmic day trading platform uses triple leveraged ETF’s (like UPRO, TQQQ, SQQQ) but my long term portfolio consists of mostly VOO, VTI, and QQQ.

 

[FREE866]

In our case, no, because we're at a stage where everything is in tax-sheltered accounts.

So I haven't thought about the tax aspects much, but I wonder if this is an apples-vs-oranges question. Isn't the "tax efficiency" just a matter of timing? Tax paid now, tax paid later or maybe no taxes due at all if the position didn't make money? OTOH money lost crossing the spread is real money, really lost. And can you even look at that question as a general case since both taxes and the spread are specific to each situation? Thankfully I don't have to worry about this.

the ETF's I buy or sell are very large--VTI, SPY, IWM,etc I'm pretty sure the bid and ask spread is like a penny or two so it's really statistically insignificant



When I use the term "tax efficiency" I'm referring to the fact that mutual funds typically declare capital gains every year and ETFs don't so for my taxable account I wouldn't want that.

 

[pb4uski]

the ETF's I buy or sell are very large--VTI, SPY, IWM,etc I'm pretty sure the bid and ask spread is like a penny or two so it's really statistically insignificant....

+1. The bid,/ask spread on the large popular ETFs are negligible. Old Shooter was 'shooting from the hip' on that response. [emoji16] I'm guessing that he doesn't own any ETFs and as a result doesn't know how negligible the bid,/ask spreads are.

 

[FREE866]

And now from that link I've learned that Leveraged S&P 500 ETFs exist! Oh my, I wonder if it would be insane to put a couple hundred dollars in one. It seems kind of like gambling?

Hahaha


I relate to that wonder! When I first learned about UPRO ( 3X the performance of the S and P 500) I was like "why shouldn't I just put all my money in that" given long term you most likely

would do really well, but then I realized that IF we had some 30-40% crash the whole investment would be worthless. I'm an aggressive investor, but that I could not live with!

 

[OldShooter]

+1. The bid,/ask spread on the large popular ETFs are negligible. Old Shooter was 'shooting from the hip' on that response. [emoji16] I'm guessing that he doesn't own any ETFs and as a result doesn't know how negligible the bid,/ask spreads are.

Guilty as charged.

 

[RetiredAt49]

Hahaha


I relate to that wonder! When I first learned about UPRO ( 3X the performance of the S and P 500) I was like "why shouldn't I just put all my money in that" given long term you most likely

would do really well, but then I realized that IF we had some 30-40% crash the whole investment would be worthless. I'm an aggressive investor, but that I could not live with!

If you want to try something fun… when the QQQ ETF is in a tight range on a 1 min chart, place a buy order of both TQQQ and SQQQ (they are inverse ETF’s of each other so that when one goes down the other goes up) and place the buy order at the recent top of the range (or swing high). When the market starts heading either down or up you win (because the other buy order never triggers).

BTW - I’m not a licensed financial advisor - just a software engineering geek who has backtested 100’s of strategies across thousands of stocks and ETF’s and the above strategy has not only an extremely high success rate but usually the move typically grosses more than at least half of my other automated trading that does automated trailing stop losses.

YMMV but if ya end up making some extra dough feel free to Venmo me a tip or buy me a drink someday [emoji16]

 

[FREE866]

If you want to try something fun… when the QQQ ETF is in a tight range on a 1 min chart, place a buy order of both TQQQ and SQQQ (they are inverse ETF’s of each other so that when one goes down the other goes up) and place the buy order at the recent top of the range (or swing high). When the market starts heading either down or up you win (because the other buy order never triggers).

BTW - I’m not a licensed financial advisor - just a software engineering geek who has backtested 100’s of strategies across thousands of stocks and ETF’s and the above strategy has not only an extremely high success rate but usually the move typically grosses more than at least half of my other automated trading that does automated trailing stop losses.

YMMV but if ya end up making some extra dough feel free to Venmo me a tip or buy me a drink someday [emoji16]

Just reading that strategy got me nervous


i know myself too well--I would so botch that up and end up losing

 

[tulak]

Is SPLG a good enough ETF for S&P500?

+1. The bid,/ask spread on the large popular ETFs are negligible. Old Shooter was 'shooting from the hip' on that response. [emoji16] I'm guessing that he doesn't own any ETFs and as a result doesn't know how negligible the bid,/ask spreads are.

Not only that, but taking VTI/VTSAX as an example, VTI’s ER is .03% vs VTSAX’s .04%.

I mostly use VTSAX, but have some VTI and have thought about converting completely to VTI, especially now that you can have partial shares.