Returns of the Vanguard Total Stock Market Index vs the ETF?

[veremchuka]

I thought holding the Admiral shares of the Vanguard Total Stock Market Index (TSMI) was the same as holding the ETF based upon the expense ratio, both are 6 basis points. I read the annual report for the TSMI today and it seems that the ETF has a greater return.

The nav appreciation of the mutual fund was +13.89% whereas the ETF was +13.92%, basically they were the same. The performance for the mutual fund was 16.38% whereas the ETF was 16.41% and again they were basically the same. However, the distributions per share of income dividends for the mutual fund was $0.761 but the ETF was $1.563 (page 1 last line of the annual report) which is double the mutual fund.

Is the ETF returning more than the mutual fund?

[karluk]

Quote:

Originally Posted by veremchuka I thought holding the Admiral shares of the Vanguard Total Stock Market Index (TSMI) was the same as holding the ETF based upon the expense ratio, both are 6 basis points. I read the annual report for the TSMI today and it seems that the ETF has a greater return. The nav appreciation of the mutual fund was +13.89% whereas the ETF was +13.92%, basically they were the same. The performance for the mutual fund was 16.38% whereas the ETF was 16.41% and again they were basically the same. However, the distributions per share of income dividends for the mutual fund was $0.761 but the ETF was $1.563 (page 1 last line of the annual report) which is double the mutual fund. Is the ETF returning more than the mutual fund?

The obvious difference is in price per share. According to Yahoo finance, VTSAX closed today at $38.78, whereas VTI closed at $79.69. The roughly 2x share price for the ETF requires roughly double the dividend per share in order to produce the same yield. So it looks to me is that everything is as it should be.

[Tyro]

OK, follow-up question (pardon my ignorance, but that's what it is) -- why is there a difference in NAV?

[HFWR]

Quote:

Originally Posted by Tyro OK, follow-up question (pardon my ignorance, but that's what it is) -- why is there a difference in NAV?

Numbers is hard...

[REWahoo]

Quote:

Originally Posted by HFWR Numbers is hard...

They sure is...

[Lsbcal]

ETF's have premium/discounts which vary day to day. That would account for perhaps a bit of the difference in returns.

[Animorph]

Quote:

Originally Posted by Tyro OK, follow-up question (pardon my ignorance, but that's what it is) -- why is there a difference in NAV?

NAV is the "net asset value", which corresponds closest to mutual fund pricing. The actual ETF price will differ from the NAV by the premium or discount, determined solely by the market.

Clearly one share of the mutual fund is not equal to one share of the ETF. That's the main reason the NAVs are different. You could probably find out from Vanguard how the two are related. But they are essentially independent now, although the performance will probably continue to be very close since they track the same index with the same ER at the same company.

[Texas Proud]

Also, since they do returns on dollars (and cents), there is rounding in the final earnings number that can affect a return calculation at the second decimal (which is really the 4th)...

[veremchuka]

Quote:

Originally Posted by karluk The obvious difference is in price per share. According to Yahoo finance, VTSAX closed today at $38.78, whereas VTI closed at $79.69. The roughly 2x share price for the ETF requires roughly double the dividend per share in order to produce the same yield. So it looks to me is that everything is as it should be.

DOE , yes that makes sense! Thank you. Numbers is hard.