Which Mutual Fund for an UTMA account in Vanguard

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#1

Hello everyone,

I need to hear your opinions on the following:

  • I just opened an UTMA for each of my 2 kids (5yo and 1.5 yo)
  • I deposited $1k each, most of it was from birthday / xmas / grand parents , I just rounded it up
  • Only Mutual Funds are available, no ETFs :frowning: , I guess because it’s a custodial account, not sure
  • Since it’s only $1k in the account, I can only select a TDIF with the latest being 2065
  • The 2065 TDIF has a 0.15% expense ratio
  • I don’t forsee there being many deposites aside form us directly, not sure still how much yearly

Now, since the above is what I would consider the best option , I was wondering if I should just deposit an extra $2k on each account and then just buy VTSAX ( minimum $3K and expense ratio of 0.04% ) .

So now I need to decide either the TDIF or the VTSAX for the account, what do you suggest?

Thanks in Advance!

#2

I honestly have no idea what to suggest because this seems to be 100% a personal decision since upping to VTSAX will require an extra $4K investment on your part. Personally (this isn’t advice) I’d go with the TDIF. If you ever want to make the change later you can always sell your holdings and buy VTSAX (though you’ll pay a little tax).

You and I keep thinking there’s a better alternative or a secret investment better than TDIFs, when in reality I don’t think there are! Jeremy would probably agree haha. But again, this sounds like a personal decision, hard to advise since it goes beyond expense ratios and minimums.

#3

I’ll cover this in tonight’s office hours (2/24/2021) with the recording available afterwards on the course site!

If you’re not signed up for office hours, you can sign up here.

#4

Just wanted to update, that I was able to figure out that I could buy ETF’s , but not from the normal Vanguard purchase page, it’s a more modern looking than the normal pages. Anyways, I’m re-watching the PFC recording to decide on what to do.

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#5

VT, FTW… it makes me put 20 characters.