Why is my vanguard target fund down today?

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Nasman
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Why is my vanguard target fund down today?

Post by Nasman » Tue Dec 29, 2015 6:08 pm

According to Vanguard the market did great today, but my target fund is down about 3%. Any one else experience this today? This is the Vandars retirement target 2045 fund.
Last edited by Nasman on Tue Dec 29, 2015 6:16 pm, edited 1 time in total.

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ScooterBob
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Re: Why is my vanguard target fund down today?

Post by ScooterBob » Tue Dec 29, 2015 6:13 pm

It probably paid its year end dividends and gains... Nothing to worry about.

Bob

2retire
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Re: Why is my vanguard target fund down today?

Post by 2retire » Tue Dec 29, 2015 6:14 pm


Silence Dogood
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Re: Why is my vanguard target fund down today?

Post by Silence Dogood » Tue Dec 29, 2015 6:22 pm

The Vanguard Target Retirement 2045 Fund is down by 1.21% (not 3%).

This is because the fund paid a distribution (see the wiki article linked above).

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cfs
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Re: Why is my vanguard target fund down today?

Post by cfs » Tue Dec 29, 2015 6:26 pm

Good to know by Vanguard Investors

For the rest of us, most Recent Distributions
https://investor.vanguard.com/mutual-fu ... b=overview

For those investing in Managed Payout Fund
https://personal.vanguard.com/us/insigh ... und-122015
~ Member of the Active Retired Force since 2014 ~

wihakowi
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Re: Why is my vanguard target fund down today?

Post by wihakowi » Tue Dec 29, 2015 10:20 pm

I got the same shock today. My VTXVX (2015) fund is down 6.22% !! Hope the distribution is a whopper - it's never had a year-end dist of anywhere near that! 2014 was about 2.5%

Not really been thrilled with it over the past few years in many regards. Maybe the "Target Date Fund" naysayers are correct?!

dbr
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Re: Why is my vanguard target fund down today?

Post by dbr » Wed Dec 30, 2015 10:44 am

wihakowi wrote:I got the same shock today. My VTXVX (2015) fund is down 6.22% !! Hope the distribution is a whopper - it's never had a year-end dist of anywhere near that! 2014 was about 2.5%

Not really been thrilled with it over the past few years in many regards. Maybe the "Target Date Fund" naysayers are correct?!
Can you be more specific about why you are not thrilled? I am a bit of a TD fund naysayer, but most likely the reasons are not what is concerning you.
If you are holding the fund in a tax deferred account you can automatically reinvest the distribution and the whole thing is a non-event. If you are holding this fund in a taxable account, then big distributions have a tax cost. That may be a reason not to hold such a fund in a taxable account, but that is not something that is an objection to such funds but rather to where the investor has chosen to hold the fund.

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linenfort
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Re: Why is my vanguard target fund down today?

Post by linenfort » Wed Dec 30, 2015 11:22 am

wihakowi wrote:I got the same shock today. My VTXVX (2015) fund is down 6.22% !! Hope the distribution is a whopper
...
Looks like a normal year-end distribution: $0.299.
2%?
Is it too early for an all-bond-portfolio thread?

letsgobobby
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Re: Why is my vanguard target fund down today?

Post by letsgobobby » Wed Dec 30, 2015 11:28 am

That being said, if OP's numbers are correct, why was it down at all? If there was a 2% dividend and a 3% market price decline, that still implies a 1% decline in a market where equities were up 1% around the world.

jebmke
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Re: Why is my vanguard target fund down today?

Post by jebmke » Wed Dec 30, 2015 11:35 am

linenfort wrote:
wihakowi wrote:I got the same shock today. My VTXVX (2015) fund is down 6.22% !! Hope the distribution is a whopper
...
Looks like a normal year-end distribution: $0.299.
2%?
plus CG distributions of ~.70
When you discover that you are riding a dead horse, the best strategy is to dismount.

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linenfort
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Re: Why is my vanguard target fund down today?

Post by linenfort » Wed Dec 30, 2015 11:37 am

jebmke wrote:
linenfort wrote:
wihakowi wrote:I got the same shock today. My VTXVX (2015) fund is down 6.22% !! Hope the distribution is a whopper
...
Looks like a normal year-end distribution: $0.299.
2%?
plus CG distributions of ~.70
Totaling 6.9%? More than the fund went down.
Hopefully that qualifies as a whopper.
Is it too early for an all-bond-portfolio thread?

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Artsdoctor
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Re: Why is my vanguard target fund down today?

Post by Artsdoctor » Wed Dec 30, 2015 1:19 pm

wihakowi wrote:I got the same shock today. My VTXVX (2015) fund is down 6.22% !! Hope the distribution is a whopper - it's never had a year-end dist of anywhere near that! 2014 was about 2.5%

Not really been thrilled with it over the past few years in many regards. Maybe the "Target Date Fund" naysayers are correct?!
wihakowi wrote:I got the same shock today. My VTXVX (2015) fund is down 6.22% !! Hope the distribution is a whopper - it's never had a year-end dist of anywhere near that! 2014 was about 2.5%

Not really been thrilled with it over the past few years in many regards. Maybe the "Target Date Fund" naysayers are correct?!
Wihakowi,

That was a huge distribution (dividends, ST cap gain, LT cap gain). If you're holding this in a tax-advantaged account, it doesn't matter. However, if you're holding this fund in your taxable, you'd have to consider it extremely tax-inefficient and decided whether you want to continue holding it there.

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Kevin M
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Re: Why is my vanguard target fund down today?

Post by Kevin M » Wed Dec 30, 2015 2:14 pm

wihakowi wrote:I got the same shock today. My VTXVX (2015) fund is down 6.22% !! Hope the distribution is a whopper - it's never had a year-end dist of anywhere near that! 2014 was about 2.5%
Here are distributions for 2015 and 2014:

Code: Select all

Dividend     $0.29900  12/28/2015  12/29/2015  12/30/2015  $14.33  —  2.16%  B
ST Cap Gain  $0.00900  12/28/2015  12/29/2015  12/30/2015  $14.33  —  —
LT Cap Gain  $0.68800  12/28/2015  12/29/2015  12/30/2015  $14.33  —  —
Dividend     $0.28400  12/26/2014  12/29/2014  12/30/2014  $15.38  —  —
ST Cap Gain  $0.02500  12/26/2014  12/29/2014  12/30/2014  $15.38  —  —
LT Cap Gain  $0.14300  12/26/2014  12/29/2014  12/30/2014  $15.38  
So we see a much larger long-term cap gain for 2015, which explains the big difference.
wihakowi wrote: Not really been thrilled with it over the past few years in many regards. Maybe the "Target Date Fund" naysayers are correct?!
It is what you'd expect from a total market fund that is about 50% stocks and 50% bonds, with about 40% of stocks in international. If you're not happy with it, then perhaps you should revisit your asset allocation to determine if it meets your needs and desires.

Personally, I would replace most of the bond funds held by this TR fund with CDs purchased directly from banks or credit unions (so no international bonds, and no total bond market), but other than that, I'd be happy owning this fund if I wanted a split of about 50/50 stocks/bonds, and didn't want to tilt away from market weightings.

As noted by others, I might prefer to hold the individual components for better tax efficient asset location.

Kevin
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dbr
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Re: Why is my vanguard target fund down today?

Post by dbr » Wed Dec 30, 2015 3:54 pm

I guess that brings up one form of naysaying: When one has a TR fund it may be more difficult to understand why it has the performance it has, leading to fear, uncertainty, and doubt.

jebmke
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Re: Why is my vanguard target fund down today?

Post by jebmke » Wed Dec 30, 2015 4:13 pm

linenfort wrote:
jebmke wrote:
linenfort wrote:
wihakowi wrote:I got the same shock today. My VTXVX (2015) fund is down 6.22% !! Hope the distribution is a whopper
...
Looks like a normal year-end distribution: $0.299.
2%?
plus CG distributions of ~.70
Totaling 6.9%? More than the fund went down.
Hopefully that qualifies as a whopper.
Total distribution ~$1.00 on a NAV of ~$15.00 (pre-dist)
When you discover that you are riding a dead horse, the best strategy is to dismount.

2retire
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Re: Why is my vanguard target fund down today?

Post by 2retire » Wed Dec 30, 2015 4:47 pm

This was definitely an odd year for the Vanguard Target Date funds. I'm in the 2030 fund and it normally has next to no capital gains distributions every year. This year, the capital gains distribution was were two thirds of the dividend payment. I wasn't expecting that tax bill.

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powermega
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Re: Why is my vanguard target fund down today?

Post by powermega » Wed Dec 30, 2015 4:51 pm

I am a huge fan of the Vanguard Target Date Funds, and those funds, or its components, make up over 80% of our entire portfolio. That said, I don't think they belong in a taxable investment account. Better to buy the individual components and use a tax-free fund in place of the TBM and TIBM funds.
Even a stopped clock is right twice a day.

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arcticpineapplecorp.
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Re: Why is my vanguard target fund down today?

Post by arcticpineapplecorp. » Wed Dec 30, 2015 8:50 pm

Nasman wrote:According to Vanguard the market did great today, but my target fund is down about 3%. Any one else experience this today? This is the Vandars retirement target 2045 fund.
Great responses everyone! Here's one more that I didn't see mentioned yet:

Nasman,if you're in a fund that has a goal of retirement in 2045, then what does it matter what happened in the fund today (or any day for that matter, between now and 2045)??

In other words, why are you so closely watching the daily performance of your 2045 fund, even though you're not planning on using this money for another 30 years??

Also, did you mean to write Vanguard instead of Vandars? I guess as long as it's not a Vandal retirement fund, you're good.
"Invest we must." -- Jack Bogle | “The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.” -- William Bernstein

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linenfort
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Re: Why is my vanguard target fund down today?

Post by linenfort » Wed Dec 30, 2015 8:59 pm

arcticpineapplecorp. wrote: Nasman,if you're in a fund that has a goal of retirement in 2045, then what does it matter what happened in the fund today (or any day for that matter, between now and 2045)??

In other words, why are you so closely watching the daily performance of your 2045 fund, even though you're not planning on using this money for another 30 years??
Probably the single most important point to be made in this thread. (above)
Also, did you mean to write Vanguard instead of Vandars? I guess as long as it's not a Vandal retirement fund, you're good.
Wikipedia says that Vandar was a Jedi master of Yoda's species.
Ok, it was wookiepedia, but it really does say that.
Is it too early for an all-bond-portfolio thread?

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