Mutual Fund Exchanges & Time Out of the Market

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Que1999
Posts: 175
Joined: Mon May 30, 2016 10:27 am

Mutual Fund Exchanges & Time Out of the Market

Post by Que1999 »

Is there any time out of the market with a mutual fund exchange? When looking to stay fully invested, I would guess this would be a good way to harvest losses/gains with the least amount of time out of the market...?
000
Posts: 2100
Joined: Thu Jul 23, 2020 12:04 am

Re: Mutual Fund Exchanges & Time Out of the Market

Post by 000 »

No time out of the market if exchanging from one Vanguard mutual fund to another Vanguard mutual fund.
MrJedi
Posts: 329
Joined: Wed May 06, 2020 11:42 am

Re: Mutual Fund Exchanges & Time Out of the Market

Post by MrJedi »

Same fund family exchange (Vanguard to Vanguard, Fidelity to Fidelity, etc.), No.

If you are going across fund families, like Fidelity fund to Vanguard fund, then you'll be out of market for 1 day to allow for the cash to settle and then transfer to the new fund manager.

For example if you hold FSKAX at Vanguard and then exchange it for VTSAX, you need to sell FSKAX, and then cash must settle and VTSAX would be purchased the next day.

If you hold VFIAX at Vanguard, you can do a same day exchange to VTSAX without being out of market, as you don't need to wait for cash to settle during the exchange/sell as both funds are at Vanguard the fund manager (not to be confused by Vanguard the broker) already.
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