Converting Vanguard Funds to ETFs at another broker

[silvor]

I have 5 Vanguard mutual fund positions I would rather have as ETF's. Vanguard allows you to convert the funds to ETF's, but I called Schwab and I guess you can't do that at Schwab (or any broker I would think).

So, I was going to transfer to Vanguard, convert then transfer back to Schwab.

Or...
Can just do the transactions in the market and adjust my cost basis when sold?

Any other ideas or suggestions?

 

[RunningBum]

Unless you have low capital gains, I can't believe it'd be worth it to sell the mutual funds and buy the ETFs.

Transfer to VG and back to Schwab should work. I guess you have your reasons for going through this.

 

[oldtimer]

If the mutual funds were inside a tax-advantage retirement account there is no taxable event when selling MF then buying ETF. But if in a taxable account, your understanding is correct that only Vanguard can do the non-taxable exchange from MF to ETF.

 

[Ncc1701]

Can I convert my conventional Vanguard mutual fund shares to Vanguard ETF Shares?

Yes. Most funds that offer ETF Shares will allow you to convert from conventional shares of the same fund to ETF Shares. (Four of our bond ETFs—Total Bond Market, Short-Term Bond, Intermediate-Term Bond, and Long-Term Bond—don't allow for conversions.)

Conversions are allowed from both Investor and Admiral™ Shares and are tax-free if you own your mutual fund and ETF Shares through Vanguard.

Keep in mind that you can't convert ETF Shares back to conventional shares. If you decide in the future to sell your Vanguard ETF Shares and repurchase conventional shares, that transaction could be taxable.

If you have a brokerage account at Vanguard, there's no charge to convert conventional shares to ETF Shares. If you have questions, contact us.

If you own your Vanguard mutual fund shares through another broker, keep in mind that some brokers may not be able to convert fractional shares, which could result in a modest taxable gain for you. Other brokers may also charge a fee for a conversion. Contact your broker for more information.

 

[OverThinkMuch]

If you have gains, it doesn't matter if you sell and buy the identical asset immediately. You owe taxes on the sale. So if your Schwab account is in taxable, selling will result in capital gains taxes.

I strongly favor ETFs over mutual funds, yet I held VTSAX for decades without selling it. Often the expense ratio is the same, the contents are the same... so I just try to ignore it. My new investments go into ETFs.

Other than your preference, what reason do you have to sell/convert mutual fund shares into ETF shares?

 

[retired1]

You can't convert MF=>ETF online yourself. You should call Vanguard and ask them to transfer to corresponding ETF "In-Kind". I did the same few days ago. Vanguard was able to tell me which of MF are eligible for in-kind conversion to ETF.