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Vanguard index funds vs ETFs

Posted on 3/15/17 at 8:49 am
Posted by meeple
Carcassonne
Member since May 2011
9383 posts
Posted on 3/15/17 at 8:49 am
I'm about to transfer about 50k between two Roths to Vanguard from my current advisor with high ERs. I'm in my late 30s and I have a sizable 401k already, so this is a supplement to that.

I was initially thinking about getting into VTSAX and a target date fund. However I've heard quite a bit of discussion regarding ETFs lately over index funds. What should be my strategy here?

Also, does anyone have a brokerage account with Vanguard? I'm looking to use this as a supplement to my kids' 529.
Posted by gpburdell
ATL
Member since Jun 2015
1423 posts
Posted on 3/15/17 at 9:45 am to
Posted by baldona
Florida
Member since Feb 2016
20484 posts
Posted on 3/15/17 at 10:30 am to
An index fund is just a fund that tracks an index. An etf can be an index fund, so what you mean is what is the difference between an etf and a mutual fund?

The main difference is that etf's can be bought all day and mutual funds only once a day at the end of trading.

I'm in all etfs. Personally if you want to be completely uninvolved in your investing than date funds are great. But it's very easy to invest in the same funds as target date yourself while being able to customize it to your personal needs more. I personally feel most target date funds are way too conservative, so try to use one for later than you'd expect. If you want to retire in 2055 use the 2065 fund for example.
This post was edited on 3/15/17 at 10:31 am
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