Why is my vanguard target fund down today?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
Nasman
Posts: 32
Joined: Tue Sep 29, 2015 1:46 pm

Why is my vanguard target fund down today?

Post by Nasman »

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 5:16 pm, edited 1 time in total.
ScooterBob
Posts: 367
Joined: Sun Feb 15, 2015 12:21 pm

Re: Why is my vanguard target fund down today?

Post by ScooterBob »

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

Bob
2retire
Posts: 400
Joined: Wed Jun 13, 2012 9:00 am

Re: Why is my vanguard target fund down today?

Post by 2retire »

Silence Dogood
Posts: 1660
Joined: Tue Feb 01, 2011 8:22 pm

Re: Why is my vanguard target fund down today?

Post by Silence Dogood »

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).
User avatar
cfs
Posts: 4154
Joined: Fri Feb 23, 2007 12:22 am
Location: ~ Mi Propio Camino ~

Re: Why is my vanguard target fund down today?

Post by cfs »

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
Posts: 1
Joined: Tue Dec 29, 2015 9:07 pm

Re: Why is my vanguard target fund down today?

Post by wihakowi »

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
Posts: 46137
Joined: Sun Mar 04, 2007 8:50 am

Re: Why is my vanguard target fund down today?

Post by dbr »

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.
linenfort
Posts: 2241
Joined: Sat Sep 22, 2007 9:22 am
Location: #96151D

Re: Why is my vanguard target fund down today?

Post by linenfort »

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%?
letsgobobby
Posts: 12073
Joined: Fri Sep 18, 2009 1:10 am

Re: Why is my vanguard target fund down today?

Post by letsgobobby »

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
Posts: 25271
Joined: Thu Apr 05, 2007 2:44 pm
Location: Delmarva Peninsula

Re: Why is my vanguard target fund down today?

Post by jebmke »

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
Stay hydrated; don't sweat the small stuff
linenfort
Posts: 2241
Joined: Sat Sep 22, 2007 9:22 am
Location: #96151D

Re: Why is my vanguard target fund down today?

Post by linenfort »

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.
User avatar
Artsdoctor
Posts: 6017
Joined: Thu Jun 28, 2012 3:09 pm
Location: Los Angeles, CA

Re: Why is my vanguard target fund down today?

Post by Artsdoctor »

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.
User avatar
Kevin M
Posts: 15750
Joined: Mon Jun 29, 2009 3:24 pm
Contact:

Re: Why is my vanguard target fund down today?

Post by Kevin M »

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
If I make a calculation error, #Cruncher probably will let me know.
dbr
Posts: 46137
Joined: Sun Mar 04, 2007 8:50 am

Re: Why is my vanguard target fund down today?

Post by dbr »

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
Posts: 25271
Joined: Thu Apr 05, 2007 2:44 pm
Location: Delmarva Peninsula

Re: Why is my vanguard target fund down today?

Post by jebmke »

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)
Stay hydrated; don't sweat the small stuff
2retire
Posts: 400
Joined: Wed Jun 13, 2012 9:00 am

Re: Why is my vanguard target fund down today?

Post by 2retire »

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.
User avatar
powermega
Posts: 1199
Joined: Fri May 16, 2014 12:07 am
Location: Colorado

Re: Why is my vanguard target fund down today?

Post by powermega »

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.
User avatar
arcticpineapplecorp.
Posts: 15014
Joined: Tue Mar 06, 2012 8:22 pm

Re: Why is my vanguard target fund down today?

Post by arcticpineapplecorp. »

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.
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions | Wiki
linenfort
Posts: 2241
Joined: Sat Sep 22, 2007 9:22 am
Location: #96151D

Re: Why is my vanguard target fund down today?

Post by linenfort »

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.
Post Reply