VSGAX v. IJT

Water Cooler Investing
#1

Need to re-allocate to some small cap growth… any thoughts on which one to use?

For more data on VSGAX, see VISGX. Same exact holding/performance but VSGAX has very low expense ratio.

The main thing that is making me think twice about VSGAX is that I would rather defer taxes on any annual distributions and go with the ETF, because I’m going to hold this sh—t for a long time.

IJT is significantly smaller in total assets, higher expense, but better sharpe for the past 5, 3, and ttm. It’s a close call, and probably won’t make a difference much absolute performance wise, but just trying to quantify the 9bps v 25bps expense against the potential and variable annual tax on capital gains for the mutual fund for 10-20year holding. Turnover on the mutual fund is around 50% too.

thoughts?

#2

Why not go VBK if you like the Vanguard fund? It’s the ETF version of the mutual fund. You get your 9 bps plus the flexibility of the ETF. Vanguard tracks a less well known index, so keep in mind that performance is likely to diverge from the iShares product over time.

#3

^Apparently the Vanguard ETF versions of their own mutual funds still distribute annual capital gains, even if you don’t sell any actual shares. Somehow by having an ETF as a share class helps absorb the tax drag on the traditional mutual fund but it’s still there.