I'm trying to choose between 2 Vanguard International Index funds. VFWIX is the FTSE all world ex US and VGTSX is the total international index. Why the .25 purchase fee for the VFWIX? What is the main difference between the two? Anybody?

My guess on the fee is that it's because it's brand new. Keeps people from jumping in and out. I'd bet it goes away at some point or gets reduced. That's the pattern they follow with new funds.

Here is a side-by-side comparison. The biggest difference between them is that VGTSX is a fund of funds comprising Europe, Pacific (asia/australia/nz)) and Emerging Markets. The other is just a straight stock fund and covers everything. The VFWIX is probably more diverse with the biggest difference being that it invests in Canada.

Yeah, they seem pretty comparable. The former is one of Vanguard's bread and butter. The latter is pretty new. If you want to get nit-picky, compare the specific holdings on the Vanguard site.

The .25% charge is paid directly to the fund. My (partial) understanding is that since EVERYONE pays that, the benefits are shared and so you should sort of break even. It's not a load.

Yes, this is true. I think it's probably also there to help cover transaction costs during the initial build-up of assets so they can keep the expenses low. Once it levels off and is established for a while I bet it goes away.

Primary difference between Total Stock Market and World ex-US -- Total Stock Market is a fund of funds and cannot pass through foreign tax credits. Hence, hold World Ex-US for taxable versus Total Stock Market (lower expenses) for retirement accounts. Go the ETF route to avoid the 0.25% buy/sell fee. (Although it doesn't matter too much for long-term buy+hold since the fee goes into the fund and increases the NAV.)

And World ex-US also holds Canada but nobody here cares about that little corner of the world.

[quote="MossySF"]Go the ETF route to avoid the 0.25% buy/sell fee. (Although it doesn't matter too much for long-term buy+hold since the fee goes into the fund and increases the NAV.)

[quote]

Thanks for all the explanations.

Can you explain this part?

[quote="sandycheeks"][quote="MossySF"]Go the ETF route to avoid the 0.25% buy/sell fee. (Although it doesn't matter too much for long-term buy+hold since the fee goes into the fund and increases the NAV.)

[quote]

Thanks for all the explanations.

Can you explain this part?[/quote

If you buy the ETF you don't have to pay the .25% sales fee. But, you do have to pay transaction fees through your broker. So, assuming that your broker charges $7/purchase you'd have to buy at least $3000/transaction to get a better deal with the ETF.

That 0.25% fee goes into the account of the fund instead of into the pocket of the brokerage, so while the 0.25% leaves your account, it enters in the total value of the fund so really you haven't lost anything technically.