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Vanguard has ETF versions of several of its mutual funds. I don't know if they are are 100% equivalent but the Vanguard site itself to them from the mutual fund pages.

Why would someone chose to own their mutual funds when an equivalent ETF is available?

  • I think you're missing a verb in your second sentence; can you check it? – chrylis Sep 29 '18 at 3:15
  • I would turn the question around: why would most of us invest in ETFs when (as @Craig W explains in his answer) buying & selling the mutual funds is much more convenient? (Besides, many of us had the mutual fund investments long before ETFs were a thing...) – jamesqf Sep 29 '18 at 4:32
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A couple reasons I can think of:

  • You can place orders for fractional shares of a mutual fund. With an ETF you can't, so you'll probably have uninvested cash.
  • If you're uncomfortable entering orders with specific prices, or you're worried about bid-ask spread, you can enter a mutual fund order and you know it will be executed at the end of the day at the net asset value (NAV).

Plus, with Vanguard, once you have enough invested in a fund to convert to Admiral Shares, it's equivalent to the ETF (particularly, expense ratio) with less complexity.

  • Would you expand on your last point? I have VFIAX for example, with fractional shares (admiral shares). Its ETF equiv. is VOO. I'm confused on which to keep long-term. They both have the same expense ratio – horse hair Sep 28 '18 at 22:41
  • @horsehair It really makes very little difference. I believe you can have Vanguard convert Admiral Shares to the equivalent ETF, though not the other way around. But you won't really gain anything by doing this, unless you want to actively trade it. – Craig W Sep 28 '18 at 22:53
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    Also, not sure about other services but at Vanguard you can only set up scheduled transfers to mutual funds. – Kevin Sep 28 '18 at 23:04
  • At many brokers, you can also buy and sell mutual funds without commissions. – chrylis Sep 29 '18 at 3:15
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    Re "orders for fractional shares", I suspect most of us don't even think about shares of mutual funds. Instead, we invest or withdraw $X at a time. – jamesqf Sep 29 '18 at 4:34

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