38 responses

  1. Hunter
    July 19, 2011

    They both have their place, but I’m more of a mutual fund investor. I don’t need the additional liquidity that an ETF offers. Love Vanguard by the way.

    • moneycone
      July 20, 2011

      When it is time to rebalance, that’s when I miss Mutual Funds! I like clean numbers! :)

      Either way, you can’t go wrong with Vanguard when it comes to costs!

  2. BeatingTheIndex
    July 19, 2011

    Interesting post MC, Vanguard is coming to Canada and I sure hope they spin some Canadian ETFs up here. I’d be a taker for my retirement account.

    • moneycone
      July 20, 2011

      At the least it will at least stir up the competition to cut costs!

  3. Ashley @ Money Talks
    July 19, 2011

    Wow… EFTs are the clear winner here. Even the one Mutual Fund that did win only did so by a few cents. Interesting.

    • moneycone
      July 20, 2011

      If you are hold Vanguard’s Admiral shares, the numbers may be different since the ER is even lower, but then for a larger capital, Vanguard waives commissions on their ETFs – that will be another post!

  4. DIY Investor
    July 19, 2011

    Nice analysis. I like to know what the price of something is in case I have to sell it so I’m a big fan of ETFs.

    • moneycone
      July 20, 2011

      If the broker commissions are reasonable and you don’t trade often, ETFs make a lot of sense.

  5. Jeffrey Trull
    July 19, 2011

    Really interesting analysis and comparison here. I haven’t utilized ETFs before, but I will definitely look into them after this.

    • moneycone
      July 20, 2011

      Keep an eye on broker commissions though.

  6. Ginger
    July 19, 2011

    Thanks, I have been trying to decide between Vanguard’s ETFs and mutuals funds and you did all the work for me. Great blog, btw.

    • moneycone
      July 20, 2011

      Glad it helps Ginger!

  7. Robert @ The College Investor
    July 20, 2011

    Great call out! I’m glad to see the math!

    • moneycone
      July 20, 2011

      Thanks Robert!

  8. Darwin’s Money
    July 20, 2011

    I like ETFs due to the flexibility of trading when you want as opposed to having to wait for settle at the end of the day, but overall? Vanguard is best in class for both. Love em!

    • moneycone
      July 20, 2011

      I agree Darwin. Hard to go wrong with Vanguard!

  9. Barb Friedberg
    July 20, 2011

    I wouldn’t worry about etfs vs mutual funds, especially wrt to Vanguard. The expense ratios are so low that the key is just to start investing and keep adding to your investments to build your wealth over time. Disclosure; I own shares in most of the highlighted investments.

    • moneycone
      July 21, 2011

      I agree, hard to go wrong with Vanguard.

  10. Suba
    July 20, 2011

    I own most of the shares you highlighted. In the retirement accounts, we have it in mutual funds, taxable investments have mostly been in ETFs just because when we started ETFs were cheaper than MF.

    • moneycone
      July 21, 2011

      If you qualify for Vanguard’s commission-free ETFs, nothing like it! But I do like investing by dollar amounts that mutual funds offer.

  11. Jacob @ My Personal Finance Journey
    July 20, 2011

    If you buy Vanguard ETFs through a Vanguard account, it’s even better of a deal! You get commission free ETF trades.

    • moneycone
      July 21, 2011

      No doubt!

  12. The Dividend Ninja
    July 20, 2011

    MoneyCone, great article!

    It just goes to show you, no matter what way you slice the pie, mutual fund fees will eat away at your profits. Invest in ETFs instead of mutual funds when possible :)

    Cheers
    Dividend Ninja

    • moneycone
      July 21, 2011

      As Bogle says, pay attention to fees, not just the returns! Thanks for chiming in DN!

  13. Dividend Mantra
    July 20, 2011

    Moneycone,

    Thanks for the article and comparisons.

    I agree with Ninja on this one. Just say no to mutual funds!

    Take care. :)

    • moneycone
      July 21, 2011

      I do think Vanguard will eventually cut the fees on mutual funds as well, to be on par with ETFs. Until then, weigh the pros and cons of ETFs and MFs.

  14. retirebyforty
    July 21, 2011

    Thanks for this timely post!
    Our 401k is switching to Fidelity Brokerage link.
    We’ll have a lot more choices, but only Fidelity funds are commission free. If we want Vanguard funds, we’ll have to pay $75 per transaction! yuk! That’s a huge rip off. Fortunately, we can purchase ETF for $8. I’ll probably go for the Vanguard ETF and maybe one or two Fidelity Spartan funds.

    • moneycone
      July 21, 2011

      $8 isn’t too shabby! I do like the selection of etfs Fidelity offers that are commission-free. Pretty well thought out actually. Would be a killer if they offered Vanguard funds commission-free!

  15. Maggie@SquarePennies
    July 21, 2011

    Thanks for the breakdown on costs. We have to roll over our 401k soon & will definitely keep this in mind. Thanks!

    • moneycone
      July 21, 2011

      Good luck Maggie! Make sure you tell them this is a rollover; some of them hand you a check leaving you deal with the consequences!

  16. FP Genius
    July 21, 2011

    Wow, thank you for the easy to use comparisons and breakdown calculations. Its hard to see why anyone would go against Vanguard when the results seem to almost be unanimous. No wonder Vanguard has had such success over the last few decades…

    • moneycone
      July 21, 2011

      Glad you find the post useful FP.

  17. Everyday Tips
    July 22, 2011

    Another fantastic post MC. I personally have mutual funds and not ETFs. Mostly because I have not opened a new investment account in awhile, and I didn’t know enough about ETFs when I started investing in my last mutual fund.

    I love Vanguard, and have invested with them for years and years.

    Also, some mutual funds don’t require a minimum balance as long as you are auto depositing monthly.

  18. 101 Centavos
    July 22, 2011

    Very nice post, MC. I agree with the commenter above, that if the initial fees are reasonable, ETFs seem to be the way to go.

  19. Untemplater
    August 2, 2011

    I’ve actually been contemplating opening an account with them so your timing is spot on. I’ve always liked ETFs and am not a frequent trader. I like the set it and forget it style. -Sydney :)

  20. Paula @ AffordAnything.org
    August 3, 2011

    Love Vanguard and Schwab — and I ONLY invest in ETFs! Nothing beats the low fees, liquidity, and the ability to start investing in a new fund with for only the price of one share ($30 bucks) rather than needing a $2000 minimum.

  21. Financial Success for Young Adults
    August 4, 2011

    Nice job! I like how you stacked them up against each other. Looks like ETFs take the cake here! My evaluation did not end in a land slide, each held their own pretty well.

  22. Buck Inspire
    October 7, 2011

    Wow, the numbers speak for themselves. All this time I used mutual funds and didn’t look at ETF’s until recently. Thanks for opening my eyes!

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