Excluding the trading commissions to get into SPY versus nothing for getting into the Vanguard 500 index fund (VFINX), is there any reason NOT to go with SPY over the Vanugard s&p 500 index tracking fund? SPY has slightly lower fees & it has the ability to get out at any point during the day which could be very useful in crisis times rather than having to get out at the end of the day with Vanguard. Thanks in advance for any thought you may have of the pros & cons of one over the other.
SPY is going to have tracking error at times, while the Vanguard fund will always trade at NAV. So, if you were to try and sell SPY during a sharp sell-off like we have seen lately, you may have to sell for a few percentage points below the NAV price. This works in opposite also, when the market is ripping you may be able to sell the SPY for a percentage point or two above the NAV price. Over long periods the tracking error should work itself out. I'm sure there are charts that show the difference between SPY's NAV and trading price - just do a search. As the previous poster said, go with the lowest fee option.
Does anyone know of a site that shows the live (or at least EndOfDay) NAV for SPY? I've been searching but haven't found one.
Does anyone know of a site that shows the live (or at least EndOfDay) NAV for SPY? I've been searching but haven't found one.
At first glance, I would go with SPY. I have a friend who has a 401k and wanted to sell a Vanguard fund (don't remember the fund name off hand) and they had a rule that if you sold the fund you could not buy it back for 90 days. Apparently, Vanguard is trying to discourage short-term trading and encourage long-term investing. I would check the prospectus for any short-term trading restrictions or penalties.
What are you wanting out of the trade? Are you looking for long term growth with less expenses than most funds offer? I use equities, options, and ETF's in my hedged income portfolio. However, there are some no-laod funds I'll add with a 3-5year+ time horizon. It's up to you on what your goals are, as it's your money...
Using MSN Moneys' advanced charting set to "Investment Growth" SPY outperforms VFINX for 1, 3, 5, 10 and 15 year returns. Returns do NOT include commissions/fees. Your results may differ depending on holding time/commissions/fees/timing.