Which of these funds are best/worse for taxable space?

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Sandtrap
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Which of these funds are best/worse for taxable space?

Post by Sandtrap » Fri Oct 06, 2017 10:38 am

Can anyone please help me get an overall grasp of what funds are best or worse in taxable space?
Thanks so much.
Here goes:

In general. . .
Which of these funds are best for taxable space?

Which are the worse?

In what order on the list?

Which funds are generally the best compromise between taxable space and overall (past) performance?

Is there any fund on the list that absolutely should not be in taxable space?'

If anyone can reorder or number the list that would be helpful, from best to worse. Tickers are fine if it's easier.

Other suggestions helpful if you have time?

Thanks everyone for your help. :D
j


VBIAX Vanguard Balanced Index

VASIX Vanguard LifeStrategy Income Fund

VWIAX Vanguard Wellesley Income fund

VTMFX Vanguard Tax Managed Balanced Fund

VSIAX Vanguard Small Cap Value Index Fund

VFSUX Vanguard Short Term Investment Grade Fund

VIGAX Vanguard Growth Index Fund

VTSAX Vanguard Total Stock Market Index Fund

VBTLX Vanguard Total Bond Market Index Fund
Last edited by Sandtrap on Fri Oct 06, 2017 11:00 am, edited 1 time in total.
Not a financial expert - just a retired businessman hacking out of a sand trap -- again.

KlangFool
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Re: Which of these funds are best/worse for taxable space?

Post by KlangFool » Fri Oct 06, 2017 10:43 am

viewtopic.php?t=208818

OP,

Please read the above thread and get the spreadsheet. Put in your marginal tax rate and so on. Then, you will get the exact number. For the fund and the ETF not on the list, ask nicely and our moderator could add the fund/ETF to the spreadsheet.

KlangFool

KlangFool
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Re: Which of these funds are best/worse for taxable space?

Post by KlangFool » Fri Oct 06, 2017 10:47 am

OP,

If I want to guess, the Total stock market would be the most tax efficient. Follow by small-cap value index.

KlangFool

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Sandtrap
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Re: Which of these funds are best/worse for taxable space?

Post by Sandtrap » Fri Oct 06, 2017 10:53 am

KlangFool wrote:
Fri Oct 06, 2017 10:43 am
viewtopic.php?t=208818

OP,

Please read the above thread and get the spreadsheet. Put in your marginal tax rate and so on. Then, you will get the exact number. For the fund and the ETF not on the list, ask nicely and our moderator could add the fund/ETF to the spreadsheet.

KlangFool
Okay.
I will start working on it. Looks complex.
Appreciate the help.
j
Not a financial expert - just a retired businessman hacking out of a sand trap -- again.

KlangFool
Posts: 6717
Joined: Sat Oct 11, 2008 12:35 pm

Re: Which of these funds are best/worse for taxable space?

Post by KlangFool » Fri Oct 06, 2017 10:55 am

Sandtrap wrote:
Fri Oct 06, 2017 10:53 am
KlangFool wrote:
Fri Oct 06, 2017 10:43 am
viewtopic.php?t=208818

OP,

Please read the above thread and get the spreadsheet. Put in your marginal tax rate and so on. Then, you will get the exact number. For the fund and the ETF not on the list, ask nicely and our moderator could add the fund/ETF to the spreadsheet.

KlangFool
Okay.
I will start working on it. Looks complex.
Appreciate the help.
j
Just post your question on that thread for any help that you need to fill in the spreadsheet.

KlangFool

rkhusky
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Re: Which of these funds are best/worse for taxable space?

Post by rkhusky » Fri Oct 06, 2017 10:55 am

VTMFX Vanguard Tax Managed Balanced Fund
VIGAX Vanguard Growth Index Fund
VTSAX Vanguard Total Stock Market Index Fund

The above are likely better. Growth funds generally have lower dividends than value funds.

WIAX Vanguard Wellesley Income fund is probably not good, being an active fund with 60% in bonds.

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Sandtrap
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Re: Which of these funds are best/worse for taxable space?

Post by Sandtrap » Fri Oct 06, 2017 11:03 am

rkhusky wrote:
Fri Oct 06, 2017 10:55 am
VTMFX Vanguard Tax Managed Balanced Fund
VIGAX Vanguard Growth Index Fund
VTSAX Vanguard Total Stock Market Index Fund

The above are likely better. Growth funds generally have lower dividends than value funds.

WIAX Vanguard Wellesley Income fund is probably not good, being an active fund with 60% in bonds.
Thanks, "rkhusky".
(noob question ahead. . . . )
Are bonds the least efficient (not incl muni/etc.) compared to equity fund??
thanks again.
j
Not a financial expert - just a retired businessman hacking out of a sand trap -- again.

rkhusky
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Re: Which of these funds are best/worse for taxable space?

Post by rkhusky » Fri Oct 06, 2017 11:05 am

Sandtrap wrote:
Fri Oct 06, 2017 11:03 am
rkhusky wrote:
Fri Oct 06, 2017 10:55 am
VTMFX Vanguard Tax Managed Balanced Fund
VIGAX Vanguard Growth Index Fund
VTSAX Vanguard Total Stock Market Index Fund

The above are likely better. Growth funds generally have lower dividends than value funds.

WIAX Vanguard Wellesley Income fund is probably not good, being an active fund with 60% in bonds.
Thanks, "rkhusky".
Are bonds the least efficient (not incl muni/etc.) ??
thanks again.
j
Generally, yes. But see this page for more info: https://www.bogleheads.org/wiki/Tax-eff ... _placement

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grabiner
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Re: Which of these funds are best/worse for taxable space?

Post by grabiner » Fri Oct 06, 2017 6:29 pm

Sandtrap wrote:
Fri Oct 06, 2017 10:38 am
VBIAX Vanguard Balanced Index

VASIX Vanguard LifeStrategy Income Fund
These two are fundamentally as tax-efficient as the stock and bond indexes they contain. The stock indexes are tax-efficient; the bond indexes less so, but would be OK in a 25% tax bracket. However, they lock you into an allocation. If you have a balanced fund and want to sell bonds, or hold bonds in a different account, or hold a different type of bonds, you need to sell stocks at the same time. Therefore, it is better to hold individual stock and bond funds.
VWIAX Vanguard Wellesley Income fund
This is tax-inefficient. It holds higher-yielding corporate bonds, and sells stocks for capital gains. It is a fine fund but should be in an IRA.
VTMFX Vanguard Tax Managed Balanced Fund
This is very tax-efficient, but I still don't like it in a taxable account for the same reason as the other balanced funds. It is better to hold Tax-Managed Capital Appreciation and Intermediate-Term Tax-Exempt (or a muni fund for your state) separately.
It is also only appropriate in high tax brackets.
VSIAX Vanguard Small Cap Value Index Fund
With the development of an ETF class, and relatively low yields on small-cap stocks, this is reasonably tax-efficient, although other stock funds would be more tax-efficient.
VFSUX Vanguard Short Term Investment Grade Fund
This is reasonably tax-efficient because of the low yields on short-term bonds. In a 28% or higher bracket, use Limited-Term Tax-Exempt instead for your short-term bond holdings if you hold bonds in your taxable account.
VIGAX Vanguard Growth Index Fund
Extremely tax-efficient, but I don't usually recommend this fund because it doesn't fit well into most portfolios. If you have a value fund in your IRA or 401(k) and want to balance it out with a growth fund in your taxable account, then Growth Index is a good choice.
VTSAX Vanguard Total Stock Market Index Fund
This is usually the best single fund for a taxable account, with low tax costs, and also extremely low expenses, which are just as important.
VBTLX Vanguard Total Bond Market Index Fund
It's usually better to hold intermediate-term bonds in a tax-deferred account if possible. If you must hold them in taxable, and are in a 28% or higher bracket, use Intermediate-Term Tax-Exempt, or a 50/50 split of Limited-Term Tax-Exempt and a long-term fund from your state.
David Grabiner

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Sandtrap
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Re: Which of these funds are best/worse for taxable space?

Post by Sandtrap » Fri Oct 06, 2017 9:37 pm

Thanks "grabiner".
really appreciate the help. :D
j
Not a financial expert - just a retired businessman hacking out of a sand trap -- again.

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