Mid-cap index funds

[chang]

VIMAX follows the CRSP US Mid Cap Index ("targets inclusion of the U.S. companies that fall between the top 70%-85% of investable market capitalization"). FSMDX follows the Russell Mid-Cap Index ("is an unmanaged index that measures the performance of the 800 smallest companies in the Russell 1000 Index, which represent approximately 26% of the total market capitalization of the Russell 1000 Index.")

The VG fund owns 383 stocks; the Fidelity fund owns 829 stocks. Notwithstanding that, the two funds' perform very much alike. Returns vary a little bit; some years one fund is ahead, some years the other. On the whole, the Vanguard fund seems to do a teeny bit better.

Both funds are dirt cheap, although Fidelity (0.025%) has a slight edge over VG (0.05%). Vanguard incentivizes you to own the ETF class (VO) by making it slightly cheaper (0.04%).

Anyone own one of these, or think there is any reason to prefer one?

[steelpony10]

chang ,

     After researching all the pertinent indexes we prefer the CRSP U.S. index method. VUG, VOT, VTI for us.

[yogibearbull]

CRSP indexes (used by Vanguard) have a better strategy for index rebalancing and additions/deletions. It does it gradually in multiple steps. Russell does rebalancing in one step on a preannounced day and that makes front-running possible.

Russell indexes have no other criteria besides size (i.e. no selectivity) and include companies that are good and bad.

I prefer ANY other index over Russell's.

[win1177]

Dec 30, 2021 8:26:44 GMT chang said:

VIMAX follows the CRSP US Mid Cap Index ("targets inclusion of the U.S. companies that fall between the top 70%-85% of investable market capitalization"). FSMDX follows the Russell Mid-Cap Index ("is an unmanaged index that measures the performance of the 800 smallest companies in the Russell 1000 Index, which represent approximately 26% of the total market capitalization of the Russell 1000 Index.")

The VG fund owns 383 stocks; the Fidelity fund owns 829 stocks. Notwithstanding that, the two funds' perform very much alike. Returns vary a little bit; some years one fund is ahead, some years the other. On the whole, the Vanguard fund seems to do a teeny bit better.

Both funds are dirt cheap, although Fidelity (0.025%) has a slight edge over VG (0.05%). Vanguard incentivizes you to own the ETF class (VO) by making it slightly cheaper (0.04%).

Anyone own one of these, or think there is any reason to prefer one?

I’ve owned VIMAX for years and been VERY happy with it. Have a huge unrealized capital gain, so have resisted changing to the ETF (VO). Great mid cap fund! Covers the small- mid cap landscape, very inexpensive. If I had to do it over, I would have gone with the ETF due to slightly lower costs, but happy with the index fund. 

Win

[fishingrod]

win1177 ,

You can do a conversion at Vanguard from VIMAX to the corresponding ETF VO without any tax consequences. Again, You can do this conversion without any tax.

One can only do this one way, not from ETF to corresponding index fund.

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"Can I convert my conventional Vanguard mutual fund shares to Vanguard ETF Shares?

Yes. Most funds that offer ETF Shares will allow you to convert from conventional shares of the same fund to ETF Shares. (Four of our bond ETFs—Total Bond Market, Short-Term Bond, Intermediate-Term Bond, and Long-Term Bond—don't allow for conversions.)

Conversions are allowed from both Investor and Admiral™ Shares and are tax-free if you own your mutual fund and ETF Shares through Vanguard.

Keep in mind that you can't convert ETF Shares back to conventional shares. If you decide in the future to sell your Vanguard ETF Shares and repurchase conventional shares, that transaction could be taxable.

If you have a brokerage account at Vanguard, there's no charge to convert conventional shares to ETF Shares. If you have questions, contact us.

If you own your Vanguard mutual fund shares through another broker, keep in mind that some brokers may not be able to convert fractional shares, which could result in a modest taxable gain for you. Other brokers may also charge a fee for a conversion. Contact your broker for more information."