Best vanguard funds for taxable account bogleheads. I couldn't find a great muni bond etf or mutual fund.
Best vanguard funds for taxable account bogleheads Vanguard's website has a pretty good tool to make this allocation decision. retired@50 Posts: 15774 Joined: Tue Oct 01 2022 2:11 pm What is your favorite international Vanguard fund for a taxable account? DPEMD: I selected Vanguard Total International ↳ The Bogleheads® Wiki: a collaborative work of the Bogleheads community; ↳ If you ever need to move an IRA or HSA to a new broker, you can just sell your assets in the old account, move the cash to the new account, then purchase new funds in the new account. [1] Major brokerages such as Fidelity, Schwab and Vanguard offer access to all ETFs without fees or investment minimums, resulting in a wide variety of choices for investors. First, traditional wisdom is that you should avoid mutual funds in a taxable account, because they generate capital gains during the year; those capital gains are taxable. You'd be better off with two funds in a taxable account to receive the foreign tax credit in the foreign fund. ETFs or Vanguard mutual funds with an ETF share class, where the gains might fit into the 0% federal LTCG bracket when stacked on top of ordinary income). The fund has been recommended for the following situations: Thus the top effective marginal tax rate is 23. I prefer Total Market for broader coverage, but the difference is so small it is hard to see with the naked eye. The Vanguard Growth Index Fund is a very suitable candidate for placement in taxable accounts. For example: - Fidelity's S&P 500 fund FXAIX. General recommendations. org At many fund firms an exchange traded stock index ETF is a little more tax-efficient than a regular mutual fund. Rowe Price VA Tax-Free Bond and a Vanguard Admiral fund of comparable risk is more than the state tax on the Vanguard fund. The Vanguard LifeStrategy funds are lifecycle offerings, providing investors with a variety of highly diversified all-in-one portfolios. I would favor it, but it hardly matters. 8% on Treasuries. In the taxable account I suggest using Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) ER 0. Because I am at Fidelity, I can't buy Vanguard life-strategy mutual funds w/out paying fees. Hold VTEB or something similar in the taxable account (despite the likely lower return due to my tax rate). While the choices for mutual funds depend on the brokerage you use, most modern brokerages offer access to low-cost index mutual funds, and commission-free access to all ETFs. His work has nasrullah wrote: Fri Aug 18, 2023 2:18 pm 95% of my portfolio is in taxable accounts. Would adding the value index be a terrible idea in a taxable account? Top. You might also want to hold municipal bonds in your taxable account, rather than taxable bonds in your IRA and 401(k). Vanguard Total Stock Market Index Fund (VTSAX) is a very diversified, very tax-efficient fund, an excellent choice for a taxable account. Since this particular purpose is to augment annual (keyword being annual here) income for family expenses, trips, home-improvements and whathaveyous for an extended duration, I would say a long-term perpetual bond ladder such as a bond fund fits the mix. It’s in the low 6 figures and currently consists of 90% VTSAX and 10% VTIAX. I would not use a mutual fund in a taxable account (other than Vanguard mutual funds with an ETF share class that get the benefits of the ETF tax preference). The best funds to hold in a taxable account are generally:-US Total Stock Market fund or S&P 500 fund. I’m happy with both current funds and only really interested in Vanguard. e. The typical large-blend fund in Morningstar’s database posted an annualized return of 11. Use a large/broad market index other than the S&P 500 in your taxable account, such as Total Stock Market. If you marginal tax rate is high enough, a muni bond fund like Vanguard Intermediate-term Tax Exempt (VWITX) is reasonable, assuming you accept the risks that come with munis. Take a look at; VWIUX Vanguard Intermediate-Term Tax-Exempt Fund Admiral Shares ($50k min), 30 day SEC yield 4. Specifically, we're looking for ETFs with tax-efficient structure, passive management, low Step 3: Placing international stock funds in the taxable account. The products are structured as funds-of-funds, charging only weighted averages of the expense If your taxable account has a fund that is less than ideal but remains a suitable holding, you might want to take dividends in cash from that fund. The tax efficient funds are Total US Market (30%), US SCV (10%), and Total Intl Market (30%). You will most likely never get a capital gains $=WxTxI wrote: Wed Jun 24, 2020 3:26 pm I searched around a bit and found some recommendations for tax efficient ETF's and Mutual Funds for use in a Taxable account. If you want a single stock fund in your taxable account, Vanguard Total World Stock is the natural choice. Otherwise, you will not receive it because less the 50% of the global equity index fund (VT) is in foreign stocks. His work has since inspired others to get the most out of their long-term investments. If you are in the 25% or lower tax bracket, the Vanguard Prime MM is generally the best Bogleheads are passive investors who follow Jack Bogle's simple but powerful message to diversify with low-cost index funds and let compounding grow wealth. I was unable to find a list, just different recommendations. a mutual fund, in a taxable account (Fidelity). Top. It should be easy to find the ticket & that of the corresponding value stock index fund. Wiki article "Tax-efficient fund placement". His work has since inspired others to get the most out of their long-term stock and bond investments by indexing. In Vanguard has a growth stock index funds that John Bogle designed largely for this purpose. IMO: In a taxable account at Fidelity for best tax-efficiency use stock index ETFs such as: (1) Vanguard Total Stock Market ETF (VTI) ER 0. -Total International Stock Fund But, as has been noted, it makes no sense to talk about your taxable account in isolation. ) You did not make a mistake. I just want to set it and forget it. If I was to hold a bond fund in tax free, what is the recommendation. "Everything should be as simple as it is, but not simpler. whodidntante Posts: 13859 Joined: Fri Jan 22, 2016 4:11 am Location ↳ The Bogleheads® Wiki: a Bogleheads are passive investors who follow Jack Bogle's simple but powerful message to diversify and let compounding grow wealth. I want to find some funds or ETF’s that would work well in a taxable account. SPY is another good option. They are 1. The Best Vanguard Dividend Funds – 4 Popular ETFs; The 5 Best Tech ETFs; The 7 Best Small Cap Value ETFs; The 6 Best ETFs for Taxable Accounts; The 5 Best Emerging Markets ETFs (1 Note that the Vanguard active tax-exempt bond funds are permitted to invest up to 20% of their portfolios in private-activity bonds. As pointed out in the next reply, VUSXX is not entirely tax free due to some investment of the fund in agreements that are taxable. Filing status and annual taxable income - 2025 Bogleheads are passive investors who follow Jack Bogle's simple but powerful message to diversify with low-cost index funds and let compounding grow wealth. Bogleheads are passive investors who follow Jack Bogle's simple but powerful message to diversify with low-cost index funds and let compounding grow wealth. A small portion is $5000 in VGHCX and $4000 in Pfizer. [1] When choosing between mutual funds, the expense ratio (ER) is an important consideration. I’m going to hold 6-7 more years. 42% expense difference between T. Historically, the best brokerages had the worst funds and the best fund manager had the worst brokerage (I’m looking at you Vanguard. Vanguard’s $5. Everyone's situation is different. 4. I’m looking for one more and and thinking either VOO and/ or VFIAX in taxable accounts. 2. If you expect to stay in the 12% bracket, or in that general range, then you can safely use a regular taxable bond fund (like FXNAX) in your taxable account. I have this brokerage as an overflow since I am maxing my tax advantaged accounts. ) ETF's can be slightly more tax efficient than mutual funds as they are less likely to distribute capital gains, however, Fidelity index mutual stock funds are still extremely tax efficient and very infrequently distribute capital CaptainJ wrote: Sun Feb 02, 2020 1:26 am I currently have some investments in an actively managed mutual fund with Fidelity, and I would like to transfer them into a total market index fund. Wondering if anyone has a recommendation for a small or mid cap fund as well. In a best case scenario you would have enough tax-deferred investment space (Traditional IRA and 401K type accounts) to hold your desired allocation of bonds/fixed-income and enough Roth and taxable space to hold your desired Hubris wrote: Thu Dec 28, 2023 2:11 am Hi all, I’m trying to figure out if there is a clearly optimal choice for our bond holdings in a taxable account. 09%ER This account is currently 4. The primary reason is because they are more "portable". - I use ETFs, meaning I don't restrict myself to only Fidelity branded mutual funds or ETFs in my Fidelity account. One suggestion is to use a "non- substantially identical" fund in taxable. Both are very tax-efficient. From there, depending on the brokerage you're using, you can narrow down your choices based on what funds are available without any transaction fees (e. I am in the 50% tax bracket (highest fed and highest state - CA). I hold the Zero funds in my IRA and then I hold a broad market ETF (ITOT) in my taxable account. how to divide cash amongst bond funds in a taxable account, I believe, has a less-clear Hold the bond fund in a tax-advantaged account. " - Albert Einstein | Wiki article link: Bogleheads® investment philosophy Bogleheads are passive investors who follow Jack Bogle's simple but powerful message to diversify with low-cost index funds and let compounding grow wealth. In addition, American's fund isn't really tax-managed; it holds American's municipal-bond funds (which are good for taxable accounts) and its actively managed US and foreign stock funds (which aren't). Over the last 12 months I’ve started to put together a 3 fund portfolio in my taxable Vanguard account. Currently gaining 10% with the fund and really like it, however, I am unsure if I'm 20+ years out from retirement. For example, if you have Vanguard 500 Index Fund with a large amount of unrealized capital gains, and your asset allocation calls for Vanguard Total Stock Market Index Fund for domestic stocks, you Bogleheads are passive investors who follow Jack Bogle's simple but powerful message to diversify with low-cost index funds and let compounding grow wealth. I have $100K to invest from selling my company's RSUs. All three say SpecID on the cost basis. Here is what I'm thinking: STEP 1. Same thing applies to the Vanguard S&P 500 index fund -- VFIAX and VOO. I tried to put together a summary that captures the differences between the funds with respect to a 100k investment in a taxable account below. Jack founded Vanguard and pioneered indexed mutual funds. $=WxTxI wrote: Wed Jun 24, 2020 3:26 pm I searched around a bit and found some recommendations for tax efficient ETF's and Mutual Funds for use in a Taxable account. Thanks! Craig If your taxable account is quite large and your tax bracket high, it would be worth considering paying 0. VTMSX seems like a solid option. Meanwhile, the median tax-cost ratio of that same group of funds Taxable account - Bogleheads wiki. The However, your goal isn't to minimize taxes; it is to optimize after-tax returns. bogleheads. 05% and Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) ER 0. I currently have a Vanguard fund open already, so I'd be most inclined to use something in that family. 7 trillion in mutual fund assets under management gives the firm about a 23% Bogleheads are passive investors who follow Jack Bogle's simple but powerful message to diversify with low-cost index funds and let compounding grow wealth. The Vanguard Value Index Fund is a suitable candidate for placement in taxable accounts. Most (but not all) Vanguard mutual funds have the same tax efficiency as their ETFs. ETFs or Vanguard mutual funds with an ETF share class, if the latter are available without transaction fees), and different funds than in your Vanguard has a growth stock index funds that John Bogle designed largely for this purpose. Short-term MMs look good now, but if rates do go back to zero again, that $100K produces a Bogleheads are passive investors who follow Jack Bogle's simple but powerful message to diversify with low-cost index funds and let compounding grow wealth. Vanguard Tax-Managed Capital Appreciation Fund is no longer worthwhile For the OP, Vanguard doesn't offer a WI tax-exempt fund, so it's probably best to use taxable bonds in the 25% bracket. In my taxable account i would like to do 90% SCHB (Schwab Total Stock Market ETF) and 10% SCHZ (Schwab Total Bond ETF). retired@50 wrote: Wed Sep 15, 2021 12:12 am Welcome to the forum. my stock allocation is 65% domestic/US and 25% international exposure. What bond fund is best in taxable might go back and forth in the 24% bracket. Vanguard's high yield My rule of thumb is that 25% is the break-even rate: munis and taxable bonds of comparable risk should have the same yield at a 25% tax rate. Bogle Center for Financial Literacy has written an article about tax-efficient investing. Either will likely be fine for you. If you sold the Vanguard fund to buy the Fidelity fund you would include capital gains taxes in the taxable account. Move any bond holdings to the retirement account (despite leaving my taxable account with greater variance). 5% and those are almost entirely qualified dividends. nasrullah wrote: Fri Aug 18, 2023 2:18 pm 95% of my portfolio is in taxable accounts. For taxable accounts, stock index funds like VOO are very tax efficient, so that's a good start. I’ve developed 12 Vanguard portfolios—six Unlike other investment fund companies, Vanguard is owned by, and run entirely for the benefit of, its investors. Buy the tax-efficient funds in the taxable account in proportion to their weights. Example: Vanguard Total Stock Market Index Fund VTSAX is the Admiral share class, and VTI is the ETF share class. So Vanguard S&P 500 ETF VOO is a good choice. Partly as a result, Vanguard has very low costs (see Vanguard FAQ). I'm not entirely sure what the difference between VTSAX and VTI/VOO is and the same with the international and bond portions. Here I took some popular funds and attempted to rank them for the best one-fund portfolios to use in a (non-taxable) retirement account: whether in a retirement account or a taxable account, goes into this single fund. After a few recommendations and reading several posts on this wonderful site, I’m What is your favorite international Vanguard fund for a taxable account? Top. Want to know what's the best for them - CD, Treasury or MM Boglehead investment philosophy: https://www. So is Vanguard's Large Cap Index ETF VV. Many/some prefer VTI (Vanguard Total Stock Market Index Fund ETF) + VXUS (Vanguard Total International Stock Index Fund) for tax reasons. 03%, or iShares Jack founded Vanguard and pioneered indexed mutual funds. com is accurate, VTMSX (tax managed small cap) is reasonably valuey and more tax efficient than VTI, or the others for that matter. in my 401K I have Total US (VTSAX), Total International (VTIAX), and Total Bond (VBTLX) index funds with Dividends set to reinvest I traded out of that and took a big tax hit in the process, and now use more tax efficient funds in my taxable account such as vanguard tax managed capital appreciation. I’m open to other small value funds, I like Vanguard funds, but am open to other options. Vanguard is mission-driven to ensure that every product and service we offer can contribute to our clients’ investment success. 00 Vanguard Total International Stock Index Fund (VTIAX) or VXUS Vanguard Total Bond Market Fund (VBTLX) or BND I prefer to be aggressive, so something like a 60% VTI/30% VXUS/10% BND or another combination. 3. If you want to claim the Foreign Tax Credit (see note below*), then hold the international fund in a taxable brokerage account, otherwise hold it in a tax-advantaged account (IRA/401k What would be your top selections of funds for investing in taxable accounts? (Emergency is maxed, Roth IRAs are maxed via backdoor, 401k is maxed and HSA is maxed). I also want to have automatic investments set up, so I would My Vanguard municipal bond fund, which was in taxable to avoid having to pay taxes surprised me last year by distributing a significant taxable capital gain. 47% yield, the T. Last edited by stan1 on Sat Sep 11, 2021 3:39 am, edited 1 time in total. Now suppose my tax-sheltered accounts are currently maxed out for the year, and I am ready to contribute $1,000 to my taxable account. For various personal reasons, I would prefer to keep my account with Fidelity rather than switching over to Vanguard. I have a solo 401K, Roth IRA, and a taxable account with Vanguard with AA of 90:10 Stock:Bond. In a recent discussion with one of Vanguard's reps, they suggested that the positions I hold in VDIGX, Div. I've already maxed out a Roth IRA, 403b, and 457 with 2055 TRD funds. Family member has 300K to invest in a Taxable account. The fund represents a commonly recommended and held investment allocation used by institutional investors consisting of 60% equity Option B) Hold a bond fund in taxable. BND also holds treasuries and maybe other tax exempt bonds. Bogleheads® España; ↳ Spain; ↳ I have already maxed out our IRAs and the 401(k) and I have some money in my taxable brokerage account. I’m a high earner and therefore am inclined to follow advice like this: “Many Bogleheads use Vanguard MM to hold their emergency fund. It is sometimes possible to get tax credit for foreign taxes paid from international stock funds, but you lose this opportunity in tax-advantaged accounts. In contrast, if you have a value fund in your tax-deferred account, it might make sense to have a growth fund in your taxable account to increase diversification. I also want to have automatic investments set up, so I would This applies to their funds that have both mutual fund & ETF shares, which is most of their large index funds. Find the lowest dividend international fund. I'd go with whatever you use in tax-deferred, like a Total Bond Market fund. Conversely, if you hold a Vanguard ETF at Vanguard and later switch to Fidelity then it can transfer in kind, incur no fees to trade going forward and you wouldn’t have to sell it to buy Fidelity’s ETF so no capital gains tax. (this set up also avoids potential wash sales) Now Vanguard has their unique process to minimize capital gains in mutual funds but we are talking about TDFs in general, not just Vanguard and even outside of the Vanguard's unusual 2020 distribution, the 2021 distribution is still much higher than a portfolio of individual Vanguard ETFs, even given the unique mutual fund process. Hello, I'm currently maxing out my 401 K with a target date index fund and have started investing in VT in my taxable brokerage. Equity income were not tax efficient and well suited for the taxable account You can separate the best brokerage from the best fund manager. 39%, and the tax cost would be break-even. Note the list order only applies to taxable accounts. In that link, the graphic shows that Value index funds are There has been several posts about best funds to use in taxable account. What do you think about taxable brokerage account with VTI and a Vanguard Bond Index? Or, would you recommend something like VTSAX? Because I'm 20+ years out, I'm thinking a 90/10 split (90 = stocks). The two best funds for taxable are total stock index and total international stock index. At Vanguard an ETF is just another asset class retiredjg wrote: Mon Mar 20, 2023 12:46 pm Vanguard Tax Managed Balanced fund is the only balanced fund I would consider for a taxable account in the 35% tax bracket. From reading previous threads, many people feel IJS (and VIOV?) is reasonable for a taxable account. 8% on ordinary investment income. A good fund for taxable accounts is one you will almost certainly keep forever and will certainly be tax efficient, such as a total stock index fund. My first thought was to use Vanguard's Tax Managed Balanced Fund (VTMFX). I prefer ETFs in taxable accounts. 5x levered with 90% stocks and 60% intermediate treasury futures which don’t spit off taxable yields like a Bogleheads are passive investors who follow Jack Bogle's simple but powerful message to diversify with low-cost index funds and let compounding grow wealth. Vanguard Tax-Managed Small-Cap Fund is worth holding if your taxable account needs a separate small cap fund; it is less expensive than the corresponding ETF, and provides stronger small-cap exposure and almost no cost compared to Small-Cap Index. Hold a taxable bond fun in the taxable account despite having to pay taxes. The Good Morning Fellow Bogleheads, I currently have a emergency fund at Vanguard taxable account in the VTMFX Tax-Managed Balanced Fund Admiral 0. necroman wrote: Wed Mar 24, 2021 3:06 am Greetings, If I wanted to have a bond fund in a taxable account, and I'm in the 24% tax bracket, which one would work best?I'm currently using VTEAX because I was interested in the tax exempt status, but would the Total Bond Fund work as well? Also, is there a risk in having too much in bond fund holdings in a taxable account? Correct. The duration point jebmke makes above is a good one. to select what I thought were the best bond fund candidates (more after-tax income than TBM/CDs, before/after SS) for my use. Bogleheads Wiki wrote:I Bonds have two components that make up their composite rate Vanguard is good for your taxable account. I usually get good suggestions here. For those of us who do not have tax-advantaged accounts and must invest 100% in taxable, the best funds are Total Stock, Total International, and, depending on your tax bracket, either Total Bond (lower tax brackets) or Intermediate-Term Tax-Exempt (higher tax brackets). I've decided to give Fidelity a shot and see how it goes. Exchange-traded funds (ETFs) have become increasingly popular due to their low barrier to entry. The best fund to use will depend on your income, your tax bracket, your goals, your asset allocation, and what you already have in your other accounts, and what you do not already have in your other accounts. The bond fund is tracking prices correctly. Is there a general principle about which Index funds are best for taxable accounts for medium (3-10 years) to long term (eternity) investments at Vanguard? This is for my ETFs are particularly attractive for tax-efficient investing in a taxable brokerage account, but not all ETFs are created equally. Thus, you could hold: G fund in TSP I bonds in a taxable account at treasury direct Int'l stock in a taxable account 1. This applies to their funds that have both mutual fund & ETF shares, which is most of their large index funds. 11%. , you can buy Vanguard ETFs at Fidelity for free, but Vanguard Mutual Funds typically carry a fee of like $75; you would need a Vanguard account to buy their Mutual Funds without a fee). Hold I bonds in the taxable account. Since you seem to be highly flexible on the allocation (you say 50/50 to 80/20 is acceptable), why don't you simply have a two fund solution of Vanguard Total World Stock Market (VT/VTWSX) [if you want only US, then use Vanguard Total Stock Market VTSMX) and Vanguard Intermediate Term Tax Exempt Now Vanguard has their unique process to minimize capital gains in mutual funds but we are talking about TDFs in general, not just Vanguard and even outside of the Vanguard's unusual 2020 distribution, the 2021 distribution is still much higher than a portfolio of individual Vanguard ETFs, even given the unique mutual fund process. 03%, or iShares That's because they're just different share classes of the same underlying fund. ) Now you can get the best of both worlds. In order to maintain my AA I have a large bond position in taxable that I have to keep. 60% in VTSAX or VTI (ETF) 40% in VTIAX or VXUS (ETF) Rick Ferri If the funds reside in a taxable account the most tax efficient use of the funds is to generate long-term capital gains. In my IRA I have FSKAX, Fidelity total stock market. 05% as of 10/19/2023, Average duration 5. What are your go-to bond funds for taxable accounts? I moved and no longer have state income taxes and I should be able to keep inside of the 22-24% tax brackets going forward. Good to go using Vanguard mutual funds with an ETF share class in taxable. weltschmerz wrote: Wed Feb 14, 2018 7:05 pm I also concur that the active management of VFIUX could give that fund better returns, but the capital gains that the fund managers create seem to make that fund less suitable for a taxable account than the others. Below is an overview of taxable accounts: when to use one, how investments are taxed, and tax-minimization strategies/tips. If you're always in a low tax bracket, the cost of tax-inefficiency is very low. , interest rate risk) are two other key considerations I make before pulling the trigger. Bogleheads, which one would you choose for a taxable account, the cheaper mutual fund or the slightly more expensive (but perhaps more tax-efficient) ETF? Thanks. I have currently VTI and VTSAX. 95% over the decade ended January 2024. The logical choice, then, is to buy ETFs, which are very tax efficient. Agreed. My opinion is that it is unlikely that any of the funds you wrote about will turn out to be the best fund for your taxable account. g. jmillot wrote: Fri Oct 28, 2022 2:04 pm I want to invest some money in a taxable account and I don't want to deal with rebalancing etc. Bogleheads has a number of and medium and higher income CaptainJ wrote: Sun Feb 02, 2020 1:26 am I currently have some investments in an actively managed mutual fund with Fidelity, and I would like to transfer them into a total market index fund. Note that the Vanguard active tax-exempt bond funds are permitted to invest up to 20% of their portfolios in private-activity bonds. However VSGAX is also very tax efficient—although w an obvious growth tilt. This makes VTI a good choice for a taxable account; you would prefer to have international stocks, with their higher dividend yields and more non-qualified dividends, in an IRA. Most important factors for a taxable international holding of course are: 1. I would not use tax advantaged space for money you might have to use. I know Bogleheads do not like sector bets but as a physician I am willing to switch the VGHCX and Pfizer to VHT if more tax efficient since I'm otherwise very well diversified. These are important quotes: "An investor in the highest tax bracket who owned an average-performing large-blend fund and held it for a decade in a taxable account would Bassman wrote: Fri Aug 09, 2019 12:59 pm Part of my retirement investing will be in a taxable account with Fidelity. I I love the Zero funds! But only in tax advantaged accounts. If you did that, you could be both tax-efficient and avoid behavioral mistakes. I quickly thought of the vanguard tax managed balanced fund (it is a vanguard account) and they do still have high tax rates. the former combination is best for taxable accounts. It isn't worth using a VA-specific bond fund, as these funds are too expensive; the 0. I follow the general idea of a 3 fund portfolio. Last edited by smooth_rough on Wed Nov 23, 2022 3:48 pm, edited 1 time in total. On Vanguard's mutual fund profiles, look at the top for a statement that the fund is also available in etc shares & check the distribution history The good news is that it’s possible to mimic the tax-sheltered compounding you get with a retirement account inside of a taxable brokerage account. Why is that a problem? Well, it's not necessarily a problem -- it depends in part on your tax bracket. . But most/all non Bogleheads: Christine Benz, Morningstar's Director of Personal Finance, and a Director of The John C. [2] This article provides a comparison of core index ETFs for Boglehead-style investing. So: S&P 500 in any and all tax deferred accounts TLH between funds like VTI, VV, ITOT, SCHB in taxable. Tax loss harvest with another large broad based market such Vanguard Large Cap. So if you were 90% stock 10% bonds and had a roth and a taxable of equivalent value you might do 90% stocks 10% bonds in each account, which would be at a slight disadvantage to 100% stocks in the roth and 80% stocks 20% bonds in the taxable. In my other tax deferred accounts, HSA and SEP-IRA with other brokers, I have VTI. Those funds are also well suited to any type of account. When discussing this issue with a friend who uses municipal bonds in her taxable account, she settled on a combination of the Vanguard Limited-Term Tax-Exempt fund (VMLTX or VMLUX Admiral) and the Vanguard Intermediate Term Tax-Exempt fund (VWITX or VWIUX Admiral). Favor funds without capital gains distributions (i. Vanguard for mutual funds in a taxable investment account. I'm trying to be mindful of tax implications to help minimize that impact. VTI/VTSAX Vanguard Total Stock Market Index fund would be OK to be 100% of your joint taxable account especially if you did not desire any international funds. And when the Thanks to their reputation for low costs and high quality, Vanguard mutual funds are widely popular. Best Vanguard Fund or ETF to hold in taxable brokerage account . It is simple, very low cost, diversified among 500 different companies, and has a long track record of exceptional returns The Vanguard Balanced Index Fund is a questionable candidate for placement in taxable accounts. You have many very tax efficient options in your Fidelity taxable. At its current 2. Here I review it and specify the best Vanguard ETFs for it in [year]. Ouch again. lane7068 wrote: Sun Feb 23, 2020 1:41 pm Good day all, I've just opened a taxable account at Vanguard since I can now max out my TSP and Vanguard Roth IRA. Ferdinand2014 wrote: Wed Apr 13, 2022 12:41 am 1. Consider adding bonds and international stock in a tax-deferred account like a traditional IRA or a 401k plan at work. Vanguard's fund holds stocks from an index, and manages them further to minimize capital gains and dividends. 1 years Use a large/broad market index other than the S&P 500 in your taxable account, such as Total Stock Market. Index mutual funds have less turnover than actively managed funds, but are still tax-inefficient. Traditional 401k or traditional IRA is best if available Hold the international fund in a taxable brokerage account so you can claim the foreign tax credit every year Back-fill the rest of the available investment space (in any of the accounts) with a stock fund (Total US stock or S&P 500) I-Bonds are still the best bonds for a taxable account, because of the state tax exemption and federal tax deferral. My I’ve developed 12 Vanguard portfolios—six for retirees and six for retirement savers—that aim to limit taxable income and capital gains distributions even when held in a taxable brokerage The Bogleheads 3 Fund Portfolio is arguably the most popular lazy portfolio out there. And some people like to just maintain their asset allocation at the same levels among all accounts. But I also have the ability to buy more of a fund from T. That being said, I'm mainly looking for a few recommendations for tax-efficient mutual funds and/or ETF's for our taxable account. In addition, John Bogle has stated that Vanguard created style index funds with tax consequences as the paramount factor that should guide If you select Specific ID on the Vanguard Brokerage account, periodically validate that they're actually doing it correctly. Currently index funds and exchange-traded funds linked to AMT-free bond indexes are available. On Vanguard's mutual fund profiles, look at the top for a statement that the fund is also available in etc shares & check the distribution history Holding in a taxable account would be the main reason to be in VUSXX. If fundfactors. I’m looking for a small cap fund to improve diversification. I have 50% of my savings in stock market. From Vanguard's What we offer web page: . I have over 650K in taxable in Vanguard Total Stock Market and Vanguard Total international Stock Market mutual funds. Taxation of REIT Bogleheads are passive investors who follow Jack Bogle's simple but powerful message to diversify with low-cost index funds and let compounding grow wealth. tax-exempt bond funds in a taxable account. For example, Admiral shares of Vanguard High-Yield Tax-Exempt yield 1. (i. Thus, if you are in the 32% federal bracket, you should almost always prefer munis even if there is no low-cost bond fund for your state; with 8% state tax, you would pay 8% on out-of-state munis but 35. Calculated returns data uses this three-fund portfolio for taxable accounts google drive spreadsheet. The Bogleheads 3 Fund Portfolio is arguably the most popular lazy portfolio out there. Greetings Fellow Bogleheads, My taxable account is currently large cap weighted w Vanguard tax-managed capital appreciation. It seems like in order of most tax efficient it is: VTI ITOT VTSAX FSKAX Anyways if anyone has a link or can provide a list thanks in advance. 8% on qualified dividends and long-term gains, 40. I'm planning to keep my bond % in my taxable the same as in my target date fund but am not sure how to select a good bond fund for a taxable account. Rowe Price fund isn't worthwhile. If you want to move your taxable brokerage Bogleheads are passive investors who follow Jack Bogle's simple but powerful message to diversify with low-cost index funds and let compounding grow wealth. If that leaves additional fixed income allocation in a taxable account, then you can look at the after-tax yield of muni's, treasuries, and TIPS and see if the additional risk of muni's is compensated in your situation. Overweighting growth stocks increases the risk of your portfolio, for no clear benefit. Rowe Price (closed to new investors) which has been a a total market fund is a good holding in a taxable account. SCHB and VTI are also good ETFs for a taxable account. You will most likely never get a capital gains . My understanding is that Bogle intended investors to put the growth fund in a taxable account and an equal amount of the value fund in a tax-advantaged account. Hi folks! I’m trying to figure out which fund to choose for our emergency money within our taxable account. So, my This article provides a comparison of core mutual funds for use in Boglehead-style investing. We both fully-fund our ROTH's at Vanguard and while I like Vanguard, I'm less than impressed with their interface. I went with a 3-fund portfolio with muni bonds, VTI, and VXUS after I watched a youtuber state go with ETF's over Index in a taxable account since they are supposed to be even more tax efficient. I hold tax-exempt muni bond funds in my Vanguard taxable account. Same exact tax efficiency for those funds. then a Vanguard fund of comparable risk would yield 4. I have three funds in my taxable Vanguard account. The fund is recommended for portfolios that employ a value tilt, such as the Schultheis "Coffeehouse" portfolio illustrated in Figure 1. Growth and VEIRX, Equity income were not tax efficient and well suited for the taxable account. I've heard about VTI being really good Because I am at Fidelity, I can't buy Vanguard life-strategy mutual funds w/out paying fees. Likewise for taxable account, what is the recommendation for bond ETF. stan1 Posts: 16051 I have Taxable accounts at Vanguard & Fidelity and I like both. I want to invest in a taxable account since my wife and I have already been maxing out our 401ks/Roth IRA for years, and, at 35 years of age, we have a significant amount for retirement in taxed advantage accounts. If all My new Vanguard taxable accounts: two Vanguard stock mutual funds consisting of US market index and International market index Vanguard Roth IRA: switch to same as above - two stock mutual funds consisting of US market index and International market index OneAmerica (current work 401(k)) - two Vanguard bond index funds - US and International Hello, I’m new to the Boglehead community and new to investing in taxable accounts. 3% to Vanguard to manage the taxable account and then put one of the all-in-one funds into the other accounts. I have a fairly well-diversified portfolio of Vanguard funds. One possibility to reduce taxes would be to hold Treasury bonds in taxable (which are exempt from state tax, and also save on federal taxes with their lower yields), and more corporate bonds in an IRA, for an overall Main accounts: Cash - $43,875; 401k\IRA - VTSAX (Vanguard Total Stock Market) - $20,619; Roth IRA - VTIAX (Vanguard Total Internation Stock Market) -$18,994. An ETF like VTI is potentially a teeny bit more tax efficient and is also portable between brokerages. Our IRA’s are completely in TIPS (combo of medium & long duration), and we still need to hold quite a bit of medium term fixed income in our taxable account to achieve our target allocation. retiringwhen Posts: 5260 Joined: Sat Jul 08, 2017 3:09 pm Are there any other funds (Vanguard or otherwise) VVIAX is considered "efficient" by the Boglehead wiki article on Tax Efficient Fund Placement. The criticisms of balanced funds in taxable are valid in my view. I suggest using Vanguard Total Stock Market Index Fund (VTSAX Bogleheads are passive investors who follow Jack Bogle's simple but powerful message to diversify with low-cost index funds and let compounding grow wealth. Tax-inefficient assets, best held in tax-advantaged space like an IRA, would be things like high-dividend-yield stocks or funds, REITs, metals (taxed as collectibles), and actively managed funds. Last I heard it was around 70% state tax free. I have vanguard and fidelity. This is the best Vanguard balanced fund for a taxable account. The emergency fund is ~$100k. an S&P 500 fund. It only yields around 1. I think the NTSX/I/E funds are good multi-asset funds for taxable accounts. I’m comfortable with either 15-20% fixed income. 92%, which is more than most of Vanguard's bond funds, but that is because of the risk involved; this fund holds a bit of junk, a lot of bonds rated A and BBB, and a lot of callable bonds which will lose more than indicated by the fund's 6-year duration if rates rise. This is not a taxable event. Do any of you guys hold this in your taxable accounts, and do you have any opinions on the fund either way? I can't get to moderate risk in one fund without bonds. ↳ The Bogleheads® Wiki: a collaborative work of the Bogleheads community; ↳ Canada - finiki (wiki) Bogleheads are passive investors who follow Jack Bogle's simple but powerful message to diversify with low-cost index funds and let compounding grow wealth. I couldn't find a great muni bond etf or mutual fund. 5x levered with 90% stocks and 60% intermediate treasury futures which don’t spit off taxable yields like a Later on down the road i plan on taking a lump sum pension and rolling that into a Traditional IRA to avoid taxation and then fund that account with SWAGX (Schwab Total Bond Index Fund). Of course, tax efficiency and duration (i. For this purpose, it is the right single fund assuming that its allocation of 49% stock is appropriate. 4% state income tax. Since this account is taxable and I am usually in the 24% sometimes in the 32% federal tax bracket and a 4. So when you look at any fund or ETF you are thinking of buying, go to its information page and find out what its distributions have been over the last couple years. Rowe Price (closed to new investors) which has been a Also consider how much fixed income is in deferred accounts compared to taxable account. Hold your bonds in your traditional retirement accounts. Working with some funds for a family member for a taxable account where per their age and general risk tolerance, they were wanted something more along the lines of 60/40 or 50/50 Stocks vs bonds. 5% of my total saving, which I plan to use for retirement if I never have to use it. Dividends and capital Claudia Whitten wrote: Tue Apr 02, 2024 12:28 pm I'm lured by the simplicity of VT (Vanguard Total World Stock Index Fund ETF) as a one-fund solution in taxable. Tax-equivalency is a key consideration when choosing between taxable vs. The equity funds are still tracking like they're average cost. Addendum . What are you thoughts on investing in tax managed funds such as VTCLX, VTMSX in a taxable account? It seems like returns over time are better in these compared to VTMSX and VSMAX (though not exactly equivalent) However there are no ETF equivalents for the tax managed, which means you are effectively stuck with vanguard and can't port easily In a taxable account, any "income" fund (defined as a fund that distributes income in the form of dividends and/or capital gains) is going to create taxable income because it's a taxable account. Full You could also do S&P 500, 400, and 600 funds if you want to separate large cap, mid cap, and small cap allocations (I prefer S&P, but really just avoid the Russell indexes in Is there a good fund or etf I should move my money into? I am considering VT or VTSAX. cnuynw pmm dnpdz akxjboioz rvya doxlx wmctq bvxjty rglazk rcebyfk