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VFIAX vs VFINX: Which Is Really Better?

In this article, we are going to explore the difference between VFIAX vs VFINX.  Choosing between two similar funds can be difficult, but this comparison will make it easy for you to decide which one is right for you.

I’ll also show you how to start taking advantage of these funds right away so you can maximize your investment returns!



The primary difference between Vanguard’s 500 Index Fund Admiral Shares (VFIAX) and Vanguard’s 500 Index Fund Investor Shares (VFINX) is the minimum initial investment.  They also have a different expense ratio because of their different classification.

Vanguard Classification

VFIAX = Admiral Fund

VFINX = Investor Fund


Both VFIAX and VFINX aim to track the S&P 500 Index, which makes them a great core equity holding in a portfolio.

VFIAX vs VFINX Graphic


VFIAX Overview

  • Fund Inception: 2000
  • 10-Year Performance 11.66%
  • Aims To Track The S&P 500
  • Expense Ratio: 0.04%
  • Number Of Stocks: 509
  • Top 10 Holdings: 26.50%
  • Yield 2.21%


Vanguard 500 Index Fund Admiral Shares (VFIAX) provides investors with exposure to 500 of the largest companies in the U.S.  This accounts for about three-quarters of the United States stock market’s value.

VFIAX is also the admiral version of the Vanguard S&P 500 ETF (VOO).  VFIAX was created in 2000 and currently has an expense ratio of only 0.04%.


According To Vanguard:

The average expense ratio of similar funds is 0.93%.  That is 23 times cheaper than similar funds in the market!


Super low expense ratios and strong diversification are what makes Vanguard funds like VFIAX very attractive for long term investors.

These are the top 10 holdings for VFIAX:

VFIAX Holdings

VFIAX is largely made up of Microsoft, Apple, Amazon, Alphabet, and Facebook but also offers exposure to over 500 other stocks.


VFINX Overview

(Closed To New Investors)

  • Fund Inception: 1976
  • 10-Year Performance 11.66%
  • Aims To Track The S&P 500
  • Expense Ratio: 0.14%
  • Number Of Stocks: 509
  • Top 10 Holdings: 26.50%
  • Yield 2.21%


Vanguard 500 Index Fund Investor Shares (VFINX) is the non-admiral version of the very popular index fund, VFIAX.  VFINX provides investors with the same market exposure as its admiral version VFIAX but at a higher expense ratio of 0.14%.  The equivalent ETF is again Vanguard’s S&P 500 ETF (VOO).

Since VFIAX and VFINX seek to track the same index and hold the same amount of stocks, it’s not surprising that their performance is nearly identical.

Here is how their performance compares over the last 10 years:

VFIAX vs VFINX Performance


VFINX Closed To New Investors

Recently Vanguard closed VFINX to new investors but to clarify, the fund is still active for those who invested previously.  This just means new investors cannot purchase VFINX anymore.

Instead, Vanguard is directing new investors to Vanguard S&P 500 ETF (VOO) or Vanguard 500 Index Fund Admiral Shares (VFIAX).


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Minimum Investment

All of Vanguard’s admiral funds have a minimum investment threshold.  This minimum used to be $10,000 but its been recently reduced it $3,000.  Once the $3,000 minimum threshold is met, there is no minimum investment thereafter.

Admiral shares always carry a lower expense ratio compared to their alternative investor share funds.  Even small differences in expense ratios can make a big difference in the total long-term returns of a portfolio.

Investor shares are usually a more accessible option for newer investors because they do not require a minimum investment.  Therefore, if you can afford to invest in admiral shares, it’s usually the better option. 

Since VFIAX is an admiral share index fund it has that $3,000 minimum initial investment.  VFINX is an Investor Shares Fund, which means there is no minimum to invest.  The only issue is the fund is now closed to all new investors.

New investors looking for a no-minimum alternative can purchase the Exchange-Traded Fund (ETF) version of VFINX, which is Vanguard S&P 500 ETF (VOO).  There is no minimum requirement to purchase VOO and can be bought commission-free with Vanguard.


Buying Fractional Shares

Another way to take full advantage of your investment money is to invest every single dollar by purchasing fractional shares of these Exchange-Traded Funds (ETFs).  For example, if you have $200 to invest and an ETF like VOO costs $250, you would have to wait until you save another $50 to then purchase one full share.

However, recently I’ve discovered you can purchase fractional shares of ETFs with no commissions using a platform called M1 Finance. (Get $30 When You Use This Link)

So now you don’t have to leave your money sitting idle in your account.  You can invest the money you want right away and take advantage of all the market gains.

Buying fractional shares allows you to maximize your investment and is especially beneficial for higher-priced funds like VOO, which has a current price as of June 30, 2020, of $277.

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Which is Better VFIAX vs VFINX?

VFIAX and VFINX are very similar investments.  Since VFIAX is an admiral share fund, it offers significantly more advantages.

I would choose to transfer my VFINX investments to VFIAX because of the lower expense ratio.  There is also no minimum investment requirement once you surpass an account balance of $3,000.

So with VFIAX, you get all the benefits of VFINX, but at a lower cost.

My winner is VFIAX!

Since VFIAX is an admiral share fund, I prefer it over VFINX.  For new investors, VFIAX is the only option left out of the two funds.


VFIAX vs VFINX for Financial Independence

Both VFIAX or VFINX can get you to Financial Independence Retire Early (FIRE).  Since they track the same index, they both have a similar return on investment.  However, even small differences in expense ratios can make a big difference over the long term.

If you already have investments in VFINX, I would consider switching it to VFIAX or VOO.  As long as it doesn’t create a taxable event.  By switching, you get the same portfolio performance for a lower expense ratio. 

That’s a no brainer!

After keeping investing fees to a minimum, you can work on increasing your savings rate and prioritizing your investments

Then, you will be well on your way to Financial Independence and Early Retirement!


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This information is my opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.

This Post Has 2 Comments

  1. Richard Hooley

    If I go thru my local broker do I pay an additional cost to the fund

    1. Mr Inspire To FIRE

      Hi Richard…

      You would only pay additional costs if your broker charges you fees. You can buy and sell these vanguard funds for free using the vanguard brokerage. That would be a great option since we know fees eat into your returns.

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