Alternative to VTI - Bogleheads.org (2024)

VTI is listed as one of the most tax efficient diversified ETFs. There are others too:

https://www.morningstar.com/funds/25-to ... tual-funds

Tracker968 wrote: ↑Sun Jan 07, 2024 8:30 pmI am holding VTI in my taxable account and of course it throws off dividends (1.4% I think).

Almost all those dividends are "qualified" which helps make VTI very tax efficient.

Tracker968 wrote: ↑Sun Jan 07, 2024 8:30 pmI am holding VTI in my taxable account and of course it throws off dividends (1.4% I think).
I recently saw a thread where someone recommended holding BRK instead to avoid that.
That got me wondering, is there another ETF that would be diversified but would minimize any income?

Getting out of VTI will cost capital gains taxes. If 1.4% is causing you problems maintaining your income level below a threshold, selling a bunch of VTI to buy something else seems like it would make it worse.

Edit: fixed typo

UpperNwGuy wrote: ↑Mon Jan 08, 2024 10:26 amGood alternatives to VTI are ITOT and SCHB. Both are total US market funds like VTI, but they use different indices.

I like and use ITOT but it's dividends (which is what OP is looking to reduce) are virtually the same as VTI. I would guess that SCHB is no different.

BolderBoy wrote: ↑Mon Jan 08, 2024 10:22 am

Tracker968 wrote: ↑Sun Jan 07, 2024 8:30 pmI am holding VTI in my taxable account and of course it throws off dividends (1.4% I think).

Almost all those dividends are "qualified" which helps make VTI very tax efficient.

Bingo. My other thought is, how many millions of dollars of VTI are you holding in taxable where this would even be a problem? 3 million of VTI throws off ~42,000/year worth of divs. I'd like to have that "problem".

SmileyFace wrote: ↑Mon Jan 08, 2024 12:56 pm

UpperNwGuy wrote: ↑Mon Jan 08, 2024 10:26 amGood alternatives to VTI are ITOT and SCHB. Both are total US market funds like VTI, but they use different indices.

I like and use ITOT but it's dividends (which is what OP is looking to reduce) are virtually the same as VTI. I would guess that SCHB is no different.

Right, any broad index fund (total stock market or S&P 500) is going to have basically the same dividends. The underlying stocks are effectively the same, so the dividends are effectively the same. The fund has to pay out the dividends, it's legally required as I understand.

Possible solutions are to split growth and value, or buy an active fund that specifically manages for taxes. Either approach also brings its own costs and downsides, though, and the tax saving is fairly small in percentage terms.

er999 wrote: ↑Sun Jan 07, 2024 8:45 pmYou could hold VUG (vanguard growth) in taxable and VTV (value) in tax deferred. Together they should be similar to VTI and VUG has 0.6% dividend. I haven’t investigated too closely as I didn’t figure my taxable would get that large that an extra $1-2k in dividends would make a difference.

This is what we do with SPYG and SPYV, except the SPYV part is in Roth (tax-free) instead of tax-deferred. When we get to ultra minimalist simplification phase, will probably just shift all to VTI, depending on accumulated gains in our positions.

I think the lowest income total market fund is IWV - iShares Russell 3000. Had 12% less income in 2022 and 15% last year. It's had less income every year since 2006.

https://www.portfoliovisualizer.com/bac ... KFN1r0VwTO