Have been looking into index funds and also in following you noted your recommendation of VSTAX. When looking into this fund I noticed “admiral shares”. What is that specially and does that change the fund in anyway?
Thank you for your help!
Have been looking into index funds and also in following you noted your recommendation of VSTAX. When looking into this fund I noticed “admiral shares”. What is that specially and does that change the fund in anyway?
Thank you for your help!
Hey Court!
Vanguard sometimes offers the exact same index fund via different “share classes”. For example:
I believe the reason they do that is to reward investors who put in a larger minimum balance, or large institutional investors with a lower expense ratio. (From their perspective, it’s probably easier to manage one account with $1M than 1,000 accounts with $1,000 each, you know)
At any rate, it’s not something you really need to worry or care about other than being aware of the expense ratio and shooting to invest in funds with a low expense ratio (<0.2% is good, so VTSAX at 0.04% is great!)
I think in the specific example above, the decided to lower the minimum on VTSAX to $3,000 and close VTSMX to new investors, basically giving everyone the benefit of the admiral shares.