VLCAX

Artistic-Western6342

Superior Diversification: VTSAX tracks the entire U.S. stock market, investing in large, mid, small, and even micro-cap stocks, representing approximately 100% of the investable U.S. market. This offers broader market exposure and reduces reliance on any single market segment. VLCAX, while diversified, focuses only on large-capitalization stocks, comprising roughly the top 85% of the U.S. market. Marginally Lower Fee: VTSAX has an expense ratio of 0.04%, slightly lower than VLCAX's 0.05%. While this 0.01% difference is minimal and won't significantly impact returns over 15+ years, it still means VTSAX is technically cheaper. Long-Term Strategy: For a truly "set it and forget it" strategy over 15 years, capturing the performance of the entire market provides more comprehensive growth potential and better hedges against specific sector or cap-size underperformance. In essence, VTSAX gives you the broadest exposure to the U.S. equity market at an ultra-low cost, making it an excellent foundation for a long-term retirement portfolio.

oberwolfach

1 basis point in expenses is inconsequential. I’d prefer VTSAX since it tries to cover the entire market, including small companies, and I don’t have an opinion on large vs small cap performance. However, the difference will be minor since the large caps in VLCAX are the vast majority of VTSAX’s weighting.

Due-Set5398

I pay .05% for VLCAX in my 401(k). Yes, this feels like bullshit. Though if he wants to track the S&P, he should see if he has access to it. The Vanguard Admiral Shares options are low expense- close to an ETF.

Musashi_13

As others have mentioned, the main benefit of Wealthfront is tax-loss harvesting, but you can do this yourself without much difficulty, so I don't think it makes sense to move any money there. Are you familiar with tax-loss harvesting? If so, you can ignore the rest of what I'll write. If not, it's just a basic piece of portfolio maintenance for taxable accounts.  The first step is to set the cost basis in your taxable account to SpecID. This allows you to select specific lots when selling or exchanging funds.  After that, it helps to turn off dividend reinvestment, as that can cause wash sales (a temporarily disallowed loss). Wash sales are not illegal, but they reduce the benefit of tax-loss harvesting. We have the dividends sent to our checking account to be spent or reinvested later, but you can send them to a money market account or elsewhere if you prefer that instead.  From there, select one or two tax-loss harvest partners for your taxable investments. For VTSAX, VFIAX or VLCAX will probably work. For VTIAX, you can use VFWAX or VTMGX.  When markets are down significantly, take a look at all of the individual lots for each of your funds. Select all lots with losses and exchange them for one of your tax-loss harvest partner funds: example - VTSAX for VFIAX. If, in the future, your tax-loss harvest partner fund also suffers a loss, you can exchange those lots again for your third partner fund. If your third fund also suffers a loss, and 30 days have elapsed since your first exchange, you can then exchange back into your original fund.  Good luck. 

Cruian

>There are lots of active managers who beat the S&P 500 over specific windows of time. VLCAX is an index fund. It can actually be said that S&P 500 is actually more actively managed than VLCAX is, due to S&P having a human element (this actually caused an issue with Tesla a few years back, which may actually explain at least part of the difference: VLCAX was able to hold Tesla longer due to not having that S&P human element, by the time Tesla did enter the S&P 500 it was big enough to be a top 20 stock). >I really don’t understand your spiel here other than, “everyone should invest in Vanguard based international funds” Doesn't need to be Vanguard (I don't use Vanguard funds myself). Just that it seems the best research we have available does seem to support an ex-US position and that revenue source isn't what matters. >and go see pwlcapital.com and bogleheads Those are used to try and counter certain arguments against having ex-US holdings. >Sure enough it is even possible to avoid over diversification with a 3 fund portfolio. Did I claim it wasn’t? I’m pretty sure the point I WAS making is that over diversification leads to watered down returns. You brought up over diversification in the first place in a thread talking about FFNOX, which is essentially just the 3 fund portfolio. A fully diversified portfolio will always have under performing parts, but which posts those are will change from time to time. Even bonds have had 20 year runs where they beat stocks. >I see, so if Germany has a recession and people stop drinking as much Coke then KO won’t have a decline in revenue as a result. Gotcha. >You have some really bizarre and broken ideas about how things work. But I am going to do myself a favor here and ignore the rest of your crazy theories and bring us back to what matters. It seems you either didn't go over what those links said about the topic or failed to understand it. >I cannot slide my timeline or the OP’s timeline I don’t time travel just yet. All you have to do is imagine the table in that link has a cutoff date a few years earlier. You look at annual returns for 2018 through the end of April 2019 for example, remove them, and you get a 60+ year timeline where 70% S&P 500 + 30% MSCI ACWI would have beat a 100% S&P 500 portfolio. >We both have timelines from today until 10-30 years from now I am guessing and so does everyone else with the exception of you maybe. So you are just spamming meaningless links based on theory which does nothing more than waste everyone’s time. My kinks should help show that you can't product the future using past returns and that it can easily be better to hold a mix of US and ex-US than only US. That the US isn't always best. >The only thing which might matter is how frequently your real world index fund or funds outperform the S&P 500 over windows from 10 to 30 years. * Of rolling 10 year periods since 1970, EAFE (developed ex-US) has beat the S&P 500 over 45% of the time: https://www.tweedy.com/resources/library_docs/papers/Dichotomy%20Btwn%20US%20and%20Non-US%20Mar2022.pdf (PDF) or for the archived version: https://web.archive.org/web/20220501183228/https://www.tweedy.com/resources/library_docs/papers/Dichotomy%20Btwn%20US%20and%20Non-US%20Mar2022.pdf That's basically a coin flip. >The BRICS are in trouble due to Russia’s belligerence and China’s epic authoritarian stupidity. Heck of a thing to tell someone to invest their money in Russia or China now. Emerging markets (which at least most of those are) combined are only 10% of a global market cap weighted portfolio. Russia hasn't been tradable for over a year now I believe, even with that, 2022 (the year it happened) favored ex-US over the US. If that S is for South Africa, interestingly they've had some of the best 100+ year returns. If someone wanted to avoid emerging markets, they could go developed markets only easily enough. Or there's a few ex-US ex-China emerging funds like EMXC. >you can give me a 60%+ chance of beating the S&P 500 then I’d be interested. But it has to be significantly better because of the current state of the world and that’s the reason it needs to beat the S&P 500 60% of the time. Where is this 60% coming from? We've got developed ex-US having a history of being pretty close to a coin flip. Factor investing favors smaller caps and value. The "timeline shifting" mention was to try and help show that yes, adding ex-US could increase overall returns (not just risk adjusted) over a 60+ year timeline when compared to 100% US.

Eric_da_MAJ

I'm already a millionaire. My positions are primarily VFIAX, VLCAX, VEMAX, and VIGAX. Though I also got into AAPL, GOOG, ALGN, BRK-B, and Tesla in 2014. I wouldn't buy a yacht unless I was going to live on it. Boats are a tremendous waste of money unless they're a real passion you want to commit to. Otherwise they're just window dressing to impress people you don't like.

jackelfrink

Sure, you can ..... but considering this is the "daily discussion" thread, I usualy default to assuming that the OP does not know that VOO is a collection of funds and not a fund itself. Its a numbers game. The number of people that pass through here who think that VOO is a company onto itself is high and the number of people that understand that VOO is a container that holds other companies is low. So my first bit of advice to everyone is just to check to make sure they understand that VOO is a container. Maybe I am just jaded, but I have seen one too many people ask stuff like "Hi guys, I currently investing 330% VOO + 33% SCHX + 33% ILCB but I want to diversify. Should I go with SNXFX or with VLCAX" and my knee jerk reaction is always to assume the OP doesn't know they are actually doubling down.

Witty_Knowledge3171

All my cash is locked up in I-Bonds (aside from small EF) getting 7.12% and likely more in a few months. Thank god. Any liquidity is going straight into VTSAX/VFIAX/VLCAX, depending on the TLH of the month.

SirGlass

>VLCAX vs SPY? They are almost an identical fund and will perform like 99% the same. SPY has a higher expense ratio, unless you want to trade options or move like millions of dollars in/out of it quickly going with a lower expense ratio fund would save you money So VLCAX is a large cap fund that holds approx 600 stocks SPY is an S&P500 index fund that holds 505 stocks The difference is I think VLCAX is just a pure market cap based fund where the S&P500 is chosen by a committee and has a few different requirements to get included like having 4 profitable quarters and a few other requirements like float If you are not going to mess around with options VOO tracks the S&P500 just like SPY and has a bit lower expense ratio

Latinkobain

Can I get some help with VLCAX vs SPY? For context, I’m 23 and recently have been throwing money in the market long term, this is for my taxable account. Right now I have about 11.5k in VLCAX that I threw in there last july, recently I’ve been buying up spy as it comes down, with an avg of 380 of 7 shares, I’m wondering if it’s worth just selling out my mutual fund and using the cash to put in SPY long term. Right now I have SPY VSMAX and VLCAX and I’m when I get paid I put 500 in VSMAX and have been keeping cash on hand for SPY and have been neglecting VSMAX. I’m approaching break even on VLCAX so I can get the cash on hand for when SPY adjusts to upcoming fed hikes for buying. Is this a mistake and should I just hold VLCAX?

SirGlass

>Overall I want to know if I made a mistake going VLCAX instead of SPY. They are going to be almost identical ; SPY is an S&P500 index fund that holds 505 large cap stocks but they have some extra requirements to get in the index where I think VLCAX is purely market cap bases

Latinkobain

I have recently put some savings into the market, i have majority in VSMAX, I have about a 40 year time horizon and am okay with risk small cap provides. Now I have about 12k in VLCAX and I’m wondering if SPY ETF is a better route, I can wait a year to have long term cap gains instead of getting taxed on the short term cap gain. Currently sitting on 6 SPY shares and plan to add more as the market dips. Overall I want to know if I made a mistake going VLCAX instead of SPY.