This is a thorough comparison of VIGAX vs VTSAX and the conclusion of which admiral fund is better for you. Exploring the difference between the Vanguard Total Stock Market Index Fund (VTSAX) and the Vanguard Growth Index Fund Admiral Shares (VIGAX) will provide us more clarity when investing.
VTSAX vs VIGAX
The primary difference between VTSAX vs VIGAX is the type of stocks they invest in. VIGAX invests in stocks of large U.S companies in areas like technology that tend to grow quicker than the overall market. So VIGAX aims for high growth companies while VTSAX aims for a more total stock market approach.
- Tracks CRSP US Total Market Index
- $3,000 Minimum Initial Investment
- 0.04% Expense Ratio
- 3535 Holdings
- Tracks CRSP US Large Cap Growth Index
- $3,000 Minimum Initial Investment
- 0.05% Expense Ratio
- 277 Holdings
- Fund Inception: 2000
- 10-Year Performance 12.37%
- Expense Ratio: 0.05%
- Number Of Stocks: 277
- Top 10 Holdings: 43.9%
- Yield 0.93%
Vanguard Growth Index Fund Admiral Shares (VIGAX) is the admiral version of the Vanguard Growth ETF (VUG).
The fund, as of March 31st, 2020, has $88.9 billion in total net assets.
VIGAX is largely made up of Microsoft, Apple, Amazon, Alphabet, and Facebook, but also provides exposure to over 200 stocks.
- Fund Inception: 1992
- 10-Year Performance 10.15%
- Expense Ratio: 0.04%
- Number Of Stocks: 3535
- Top 10 Holdings: 18.9%
- Yield 1.88%
Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) provides investors with exposure to the entire U.S. equity market. The U.S equity market includes small, mid, and large-cap growth and value stocks.
VTSAX was created in 1992, it currently has an expense ratio of 0.04% and offers exposure to over 3500 stocks.
VTSAX is largely made up of Microsoft, Apple, Amazon, and Google but also provides exposure to over 3500 stocks.
VIGAX and VTSAX Similarities
Although VIGAX and VTSAX are not the same types of funds, they have similarities. They are both Vanguard Admiral Index Funds. Their expense ratio is almost identical (0.04% vs 0.05%) and they both have a minimum initial investment of $3,000.
Similarities between VIGAX and VTSAX:
- Vanguard Admiral Funds
- Low Expense Ratios
- Moderate – Aggressive Funds (Risk Level 4)
- Minimum Investment
VIGAX and VTSAX Differences
VTSAX and VIGAX primarily differ in that the VIGAX fund is more focused on growth companies in the U.S. VIGAX also provide much less diversity with only 277 holdings compared to 3535 holdings in VTSAX. These differences are because they intend to track different indexes.
Lastly, VTSAX has double the yield of VIGAX (1.88% vs 0.93%). Since VIGAX has a low yield of only 0.93% it makes sense to own VIGAX in taxable accounts to minimize taxes.
Differences between VIGAX and VTSAX:
- Tracking Different Indexes
- Portfolio Composition
- Diversification (Holdings)
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VIGAX vs VTSAX Performance
VTSAX and VIGAX have different performance returns over the last 10 years. VIGAX aims to have more growth but also takes more risk. Although they are both categorized as a 4 out of 5 for risk level, VIGAX has a higher risk profile. This is because it has significantly fewer stock holdings (277) and less balance in allocation (43.9% in 10 holdings).
Here is their performance side by side over the last 10 years:
VIGAX returned an additional 2.22% for the added risk and focus on growth.
$3,000 Minimum Investment
VTSAX and VIGAX both have an initial minimum investment of $3,000 since they are classified as admiral funds. Vanguard admiral funds used to have a $10,000 minimum but recently that has been reduced to $3,000. Once the $3,000 minimum threshold is met, there is no minimum investment thereafter.
Which is Better VTSAX or VIGAX?
The answer depends on your goals and risk tolerance. To make it easier to decide I’ll lay out the advantages of both of them.
- More Diversification
- Balanced Allocation
- Higher Yield/Dividend
- Better Performance History
- Lower Yield/Dividend
- Higher Growth
My Winner: VTSAX (Balanced Portfolio)
I would choose VTSAX because I prefer having a more balanced portfolio.
You might have noticed Yield/Dividend was an advantage for both. This is because it depends on your goals, if you prefer a lower yield to minimize tax then VIGAX is a great option. Alternatively, if you want a fund that pays a healthier dividend then VTSAX might be a better option.
It’s important to choose the fund that best fits your investment goals.
VTSAX or VIGAX for Financial Independence
Both VTSAX and VIGAX can get you to Financial Independence Retire Early (FIRE). They both have a similar return on investment and have rock bottom expense ratios (0.05% & 0.04%). So, either option is a great investment for financial independence.
After keeping 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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