{"id":17,"date":"2007-03-13T11:45:49","date_gmt":"2007-03-13T16:45:49","guid":{"rendered":"https:\/\/stockherd.com\/blog\/?p=17"},"modified":"2007-07-08T21:07:43","modified_gmt":"2007-07-09T02:07:43","slug":"not-all-etfs-are-the-same","status":"publish","type":"post","link":"https:\/\/stockherd.com\/blog\/?p=17","title":{"rendered":"Not all ETFs are the same"},"content":{"rendered":"<p>In a recent <a href=\"http:\/\/johncbogle.com\/wordpress\/wp-content\/uploads\/2007\/02\/WSJ_2-07.pdf\">letter to the editor<\/a> of the Wall Street Journal, John Bogle cautions that of the 690 exchange traded funds (ETFs) in existence today, only 12 represent broad market segments, such as the S&amp;P 500, the Dow Jones Wilshire Total (U.S.) Stock Market Index, and the Morgan Stanley EAFE (Europe, Australia and Far East) Index of non-U.S. stocks.<\/p>\n<p>However, he goes on to comment:  ETFs, simply put, are index funds that can be traded in the financial markets. In fairness, if they are not traded, they can often be the equal of the classic index funds.<\/p>\n<p><!--more--> ETFs that represent broad market indices offer several advantages to the small investor.  First, they can be traded like stocks, there is no minimum purchase.  When the corresponding index fund is purchased outside of an IRA,  there is usually a minimum ($3,000 for many of the Vanguard funds).   Second, the ETFs typically have a slightly lower expense ratio.  For example, the Vanguard Total Stock Market Index Fund Investor Shares (<a href=\"https:\/\/flagship.vanguard.com\/VGApp\/hnw\/FundsSnapshot?FundId=0085&amp;FundIntExt=INT\">VTSMX<\/a>) is a mutual fund with an expense ratio of 0.19%.  The <span class=\"a-head\">Vanguard Total Stock Market ETF<\/span><!--End CBD--><!--CBD: HeadTag-->  <span class=\"symbol\">(<a href=\"https:\/\/flagship.vanguard.com\/VGApp\/hnw\/FundsSnapshot?FundId=0970&amp;FundIntExt=INT\">VTI<\/a>) <\/span>is the corresponding exchange traded fund and has an expense ratio of 0.07%.  For a $10,000 investment, the 0.12% difference in expenses would result in $12 in buying the ETF.   This enough to offset the commission, assuming it is purchased through a discount broker.<\/p>\n<p>Learn more about index fund investing at the <a href=\"http:\/\/www.vanguard.com\/bogle_site\/bogle_home.html\">Bogle Financial Markets Research Center<\/a> and <a href=\"http:\/\/johncbogle.com\/wordpress\/\">The Bogle eBlog<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In a recent letter to the editor of the Wall Street Journal, John Bogle cautions that of the 690 exchange traded funds (ETFs) in existence today, only 12 represent broad market segments, such as the S&amp;P 500, the Dow Jones Wilshire Total (U.S.) Stock Market Index, and the Morgan Stanley EAFE (Europe, Australia and Far [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[4],"tags":[],"class_list":["post-17","post","type-post","status-publish","format-standard","hentry","category-etfs"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/stockherd.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/17","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/stockherd.com\/blog\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stockherd.com\/blog\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stockherd.com\/blog\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/stockherd.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=17"}],"version-history":[{"count":0,"href":"https:\/\/stockherd.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/17\/revisions"}],"wp:attachment":[{"href":"https:\/\/stockherd.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=17"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stockherd.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=17"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stockherd.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=17"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}