VFIAX vs VFINX: Which Is Really Better?

In this article, we are going to explore the difference between VFIAX vs VFINX.

Choosing between two similar funds can be difficult, but this comparison will make it easy for you to decide which is right.

I'll also show you how to take advantage of these funds immediately so you can maximize your investment returns!

VFIAX vs VFINX Graphic



The primary difference between Vanguard's 500 Index Fund Admiral Shares (VFIAX) and Vanguard's 500 Index Fund Investor Shares (VFINX) is the minimum initial investment.

They also have different expense ratios because of their different classification.

Vanguard Classification

VFIAX = Admiral Fund

VFINX = Investor Fund

Both VFIAX and VFINX aim to track the S&P 500 Index, which makes them a great core equity holding in a portfolio.


VFIAX Overview

  • Fund Inception: 2000
  • 10-Year Performance 11.66%
  • Aims To Track The S&P 500
  • Expense Ratio: 0.04%
  • Number Of Stocks: 509
  • Top 10 Holdings: 26.50%
  • Yield 2.21%

Vanguard 500 Index Fund Admiral Shares (VFIAX) provides investors exposure to 500 of the largest companies in the U.S.

This accounts for about three-quarters of the United States stock market’s value.

VFIAX is the admiral version of the Vanguard S&P 500 ETF (VOO)VFIAX was created in 2000 and has an expense ratio of only 0.04%.

According To Vanguard:

The average expense ratio of similar funds is 0.93%.  That is 23 times cheaper than similar funds in the market!

Super low expense ratios and strong diversification are what make Vanguard funds like VFIAX very attractive for long-term investors.

These are the top 10 holdings for VFIAX:

VFIAX Top Holdings

VFIAX is primarily made up of Microsoft, Apple, Amazon, Alphabet, and Berkshire but also offers exposure to over 500 other stocks.


VFINX Overview

(Closed To New Investors)

  • Fund Inception: 1976
  • 10-Year Performance 11.66%
  • Aims To Track The S&P 500
  • Expense Ratio: 0.14%
  • Number Of Stocks: 509
  • Top 10 Holdings: 26.50%
  • Yield 2.21%

Vanguard 500 Index Fund Investor Shares (VFINX) is the non-admiral version of the top-rated index fund, VFIAX.  VFINX provides investors the same market exposure as its admiral version, VFIAX but at a higher expense ratio of 0.14%.

The equivalent ETF is again Vanguard's S&P 500 ETF (VOO).

Since VFIAX and VFINX seek to track the same index and hold the same amount of stocks, it's not surprising that their performance is nearly identical.

Here is how their performance compares over the last 10 years:

VFIAX vs VFINX Performance


VFINX Closed To New Investors

Recently Vanguard closed VFINX to new investors but to clarify, the fund is still active for those who invested previously.

This means new investors cannot purchase VFINX anymore.

Instead, Vanguard directs new investors to Vanguard S&P 500 ETF (VOO) or Vanguard 500 Index Fund Admiral Shares (VFIAX).


Minimum Investment

All of Vanguard's admiral funds have a minimum investment threshold.  This minimum used to be $10,000 but was recently reduced to $3,000.

Once the $3,000 minimum threshold is met, there is no minimum investment thereafter.

Admiral shares always carry a lower expense ratio than alternative investor share funds.  Even small differences in expense ratios can make a big difference in the total long-term returns of a portfolio.

Investor shares are usually a more accessible option for newer investors because they do not require a minimum investment.  Therefore, it's usually the better option if you can afford to invest in admiral shares. 

Since VFIAX is an admiral share index fund, it has that $3,000 minimum initial investment.

VFINX is an Investor Shares Fund, which means there is no minimum to invest.  The only issue is the fund is now closed to all new investors.

New investors looking for a no-minimum alternative can purchase the Exchange-Traded Fund (ETF) version of VFINX, Vanguard S&P 500 ETF (VOO).

There is no minimum requirement to purchase VOO, and it can be bought commission-free with Vanguard.


Buying Fractional Shares

Another way to take full advantage of your investment money is to invest every dollar by purchasing fractional shares of these Exchange-Traded Funds (ETFs).

For example, if you have $200 to invest and an ETF like VOO costs $250, you would have to wait until you save another $50 to purchase one full share.

However, recently I've discovered you can purchase fractional shares of ETFs with no commissions using a platform called M1 Finance. ***(Get $50 When You Use This Link)***

So now you don't have to leave your money idle in your account.

You can immediately invest the money you want and take advantage of all the market gains.

Buying fractional shares allows you to maximize your investment and is especially beneficial for higher-priced funds like VOO.


Which is Better VFIAX vs VFINX?

VFIAX and VFINX are very similar investments.  Since VFIAX is an admiral share fund, it offers significantly more advantages.

I would transfer my VFINX investments to VFIAX because of the lower expense ratio.

There is also no minimum investment requirement once you surpass an account balance of $3,000.

So with VFIAX, you get all the benefits of VFINX, but at a lower cost.

My winner is VFIAX!

Since VFIAX is an admiral share fund, I prefer it over VFINX.  VFIAX is the only option left out of the two funds for new investors.

Similar Funds:


VFIAX vs VFINX for Financial Independence

VFIAX and VFINX can get you to Financial Independence Retire Early (FIRE).  Since they track the same index, they both have a similar return on investment.

However, even small differences in expense ratios can make a big difference over the long term.

If you already have investments in VFINX, I would consider switching to VFIAX or VOO.

As long as it doesn't create a taxable event.

You get the same portfolio performance for a lower expense ratio by switching. 

That's a no-brainer!

After keeping investing fees to a minimum, you can work on increasing your savings rate and prioritizing your investments

Then, you will be well on your way to Financial Independence and Early Retirement!