Link is to the Bogleheads forum post where someone posted a link back in August. Before now, you had to call in to request the change, and it could take a few days, but now it’s online and allegedly is done the next day.
I don’t know when they added this, but I think it was sometime this year because I remember considering it last EOY (that’s when I usually rebalance).
Here is a direct link, or you can get there on the website: Transact > Buy & Sell > Convert Vanguard mutual funds to ETFs. You can select either a number of shares or a percent of the total position.
As to why you may want to do this, here are a few reasons:
- converting shares classes isn’t a taxable event (but you can’t go ETF -> mutual fund)
- ETFs have a slighly lower ER (0.01-0.02% in most cases, so not huge)
- easier if you want to ACATS transfer shares to a different brokerage
- if you have a mix of ETFs and mutual funds, rebalancing between ETFs is easier, so moving a portion of your mutual funds to ETFs may be worthwhile
Have you taken advantage of Vanguard’s mutual fund -> ETF conversion? Do you think you’ll use this new online tool?
I’m planning on doing this sometime before EOY. I recently bought some small-value ETFs (AVUV and AVDV) in my tax-advantaged accounts and am considering expanding my small-value tilt, and selling mutual funds and waiting until the next day to buy ETFs is a bit of a hassle. I’m also considering moving my taxable assets to Fidelity because they have YTD tax figures, which I haven’t been able to find in Vanguard, and I like to estimate my taxes around EOY to decide on any tax moves I want to do (I often do a Roth conversion around EOY from my old 401k rollover).
I’m going to keep a portion in the mutual fund for automatic investments, but I’ll probably convert the bulk of it.