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Post by Deleted on May 2, 2022 22:33:38 GMT
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Post by Chahta on May 3, 2022 1:13:01 GMT
Or pick funds that pay very few CGs and no divs. I use AKREX. Very low turnover. |
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Post by roi2020 on May 3, 2022 6:12:40 GMT
Broad-based equity index funds generally are very tax efficient.
Also, many of Vanguard's ETFs were created as a separate share class of the company's mutual funds. After-tax returns for these corresponding share classes are, for all intents and purposes, essentially the same.
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Post by Deleted on May 3, 2022 12:26:46 GMT
I don't consider Vanguard Target Date funds as actively managed. The large capital gains distribution was due to Vanguard's decision to allow some 401K plans to sell investor shares of the funds in order to buy institutional shares of the funds.
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Post by chang on May 3, 2022 12:35:17 GMT
I don't consider Vanguard Target Date funds as actively managed. The large capital gains distribution was due to Vanguard's decision to allow some 401K plans to sell investor shares of the funds in order to buy institutional shares of the funds. Aren’t share class conversions non-taxable events? |
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Post by Deleted on May 3, 2022 12:52:12 GMT
I don't consider Vanguard Target Date funds as actively managed. The large capital gains distribution was due to Vanguard's decision to allow some 401K plans to sell investor shares of the funds in order to buy institutional shares of the funds. Aren’t share class conversions non-taxable events? Those who did not sell their shares in taxable accounts were hit. Because of their large positions., the taxes due are onerous especially when investors don't expect them or prepared for them. |
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Post by Deleted on May 3, 2022 12:53:49 GMT
I don't consider Vanguard Target Date funds as actively managed. The large capital gains distribution was due to Vanguard's decision to allow some 401K plans to sell investor shares of the funds in order to buy institutional shares of the funds. Aren’t share class conversions non-taxable events? Investor to Admiral or ETF are non-taxable conversions. Institutional was not. I don't know if that is to specific to the Target Date funds or if applies to all Vanguard funds. |
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Post by chang on May 3, 2022 13:03:52 GMT
Aren’t share class conversions non-taxable events? Investor to Admiral or ETF are non-taxable conversions. Institutional was not. I don't know if that is to specific to the Target Date funds or if applies to all Vanguard funds. That is interesting - and unexpected. |
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Post by fishingrod on May 3, 2022 13:05:10 GMT
"In December 2020, Vanguard lowered its minimum for institutional investors to $5 million. "That change sparked a selloff in the retail target funds as smaller retirement plans sold assets in order to shift money into lower-cost institutional funds, according to the lawsuit. Vanguard’s retail funds sold as much as 15% of their assets to raise cash to redeem shares, and in doing so realized capital gains which were distributed to the funds’ remaining investors as required by law, according to the lawsuit." Vanguard had other options to avoid this outcome, such as lowering the retail fund fees for plans that had at least $5 million invested or merging the two funds together, according to the lawsuit. Ultimately, Vanguard did the latter, merging the funds together in September 2021."
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Post by Deleted on May 3, 2022 13:21:33 GMT
VWALX had a huge Capital Gains distribution for 2021. I had carryover capital losses to neutralize the taxes due, but I have the opinion now that it is not a good idea to invest large sums in one one fund, stock or bond in a taxable account.
Most here and elsewhere are likely investing in non-taxable accounts, so they don't realize the consequences associated with taxable investing.
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Post by fritzo489 on May 3, 2022 13:25:16 GMT
My only regret, CG was reinvested. Now wish I had the CG added to settlement fund. I'm guessing about 6% saving "if" I reinvested today !
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Post by Deleted on May 3, 2022 13:46:46 GMT
My only regret, CG was reinvested. Now wish I had the CG added to settlement fund. I'm guessing about 6% saving "if" I reinvested today ! A broker years ago advised me to take taxable account mutual fund dividends in cash rather than shares. I used a drip dividend reinvestment approach with individual stocks. Last year I stopped reinvesting distributions in my RIRA. |
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Post by anitya on May 3, 2022 20:50:13 GMT
"I have the opinion now that it is not a good idea to invest large sums in one one fund, stock or bond in a taxable account."
I am guessing your comment is about funds, rather than single stocks or bonds. Based on that, you can invest 100% of your equity investment in S&P 500 index ETF, QQQ, and other cap weighted index ETFs in a taxable account. Try to keep Vanguard ETFs that are a separate class of their OEFs (even if index funds) out of your taxable account. My largest Vanguard ETFs are VHT, VIG, and VIGI and all in taxable accounts but I stopped adding to them sometime ago - tax surprises on them is inevitable. If avoiding surprises is a necessity, I think it is important not to have pre-conceived ideas or beliefs of safety.
I do not own any Equity (or allocation) mutual funds (even index funds) in a taxable account.
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Post by roi2020 on May 4, 2022 2:10:29 GMT
"I have the opinion now that it is not a good idea to invest large sums in one one fund, stock or bond in a taxable account." I am guessing your comment is about funds, rather than single stocks or bonds. Based on that, you can invest 100% of your equity investment in S&P 500 index ETF, QQQ, and other cap weighted index ETFs in a taxable account. Try to keep Vanguard ETFs that are a separate class of their OEFs (even if index funds) out of your taxable account. My largest Vanguard ETFs are VHT, VIG, and VIGI and all in taxable accounts but I stopped adding to them sometime ago - tax surprises on them is inevitable. If avoiding surprises is a necessity, I think it is important not to have pre-conceived ideas or beliefs of safety. I do not own any Equity (or allocation) mutual funds (even index funds) in a taxable account. , Why are tax surprises inevitable for VHT, VIG, VIGI and possibly other Vanguard ETFs? Thanks! |
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Post by anitya on May 4, 2022 7:48:52 GMT
"I have the opinion now that it is not a good idea to invest large sums in one one fund, stock or bond in a taxable account." I am guessing your comment is about funds, rather than single stocks or bonds. Based on that, you can invest 100% of your equity investment in S&P 500 index ETF, QQQ, and other cap weighted index ETFs in a taxable account. Try to keep Vanguard ETFs that are a separate class of their OEFs (even if index funds) out of your taxable account. My largest Vanguard ETFs are VHT, VIG, and VIGI and all in taxable accounts but I stopped adding to them sometime ago - tax surprises on them is inevitable. If avoiding surprises is a necessity, I think it is important not to have pre-conceived ideas or beliefs of safety. I do not own any Equity (or allocation) mutual funds (even index funds) in a taxable account. , Why are tax surprises inevitable for VHT, VIG, VIGI and possibly other Vanguard ETFs? Thanks! Do you currently own them? |
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Post by roi2020 on May 4, 2022 16:25:02 GMT
anitya , Why are tax surprises inevitable for VHT, VIG, VIGI and possibly other Vanguard ETFs? Thanks! Do you currently own them? No, I do not currently own them. |
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