Questions on VTIAX (Total International) yield.

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1210sda
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Questions on VTIAX (Total International) yield.

Post by 1210sda »

1. Does anyone know why VTIAX doesn't show a 30 day (or whatever) yield under "Price and Yield" of the Summary page?? (on Vanguard website).

2.The Lifestrategy funds do show a 30 day SEC yield. Do they include the dividends from VTIAX? Or, is that the yield without VTIAX?
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1210sda
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Re: Questions on VTIAX (Total International) yield.

Post by 1210sda »

Sunday Bump. :happy
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grabiner
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Re: Questions on VTIAX (Total International) yield.

Post by grabiner »

Vanguard doesn't publish an SEC yield for any of its international funds; I don't know the reason for this.

The LifeStrategy and Target Retirement funds presumably use the dividend yields from the underlying funds. (This shows up for other funds as well; the SEC yield for Vanguard Total Corporate Bond ETF is higher than the SEC yields for the three ETFs it holds, because its SEC yield is based on the dividend yield of the other ETFs, rather than the yield-to-maturity which those ETFs use to compute their SEC yields.)
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Re: Questions on VTIAX (Total International) yield.

Post by 1210sda »

Thank you, David.

I tried to "force" the yield, but I'm not confident of the results.

I allocated $10,000 to the underlying funds in VSMGX (Life Strategy Moderate Growth) according to their current weights.

Total Stock $3,600 30 day SEC Yield 1.57% Dividends = $56.52
Total Bond $2,800 30 day SEC Yield 1.16% Dividends = $32.48
Total Intnl Bond $1,200 30 day SEC Yield 0.26% Dividends = $3.12

Sub Totals (w/o VTIAX) $7,600 Dividends = $92.12

VSMGX $10,000 30 day SEC yield 1.97% Dividends = $197.00

Therefore, the difference between $197.00 and $92.12 is $104.88. Dividing the $104.88 into VTIAX's asset allocation (24% or $2,400) = 4.37% as the yield for VTIAX.

Seems rather high, but I can't see how else to calculate this.

Perhaps someone else has another view on this.
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Re: Questions on VTIAX (Total International) yield.

Post by grabiner »

1210sda wrote: Sun Oct 18, 2020 11:38 am Thank you, David.

I tried to "force" the yield, but I'm not confident of the results.

I allocated $10,000 to the underlying funds in VSMGX (Life Strategy Moderate Growth) according to their current weights.

Total Stock $3,600 30 day SEC Yield 1.57% Dividends = $56.52
Total Bond $2,800 30 day SEC Yield 1.16% Dividends = $32.48
Total Intnl Bond $1,200 30 day SEC Yield 0.26% Dividends = $3.12

Sub Totals (w/o VTIAX) $7,600 Dividends = $92.12

VSMGX $10,000 30 day SEC yield 1.97% Dividends = $197.00

Therefore, the difference between $197.00 and $92.12 is $104.88. Dividing the $104.88 into VTIAX's asset allocation (24% or $2,400) = 4.37% as the yield for VTIAX.

Seems rather high, but I can't see how else to calculate this.
I believe that the bond fund yields used in calculating the SEC yield of a fund-of-funds are the distribution yields, not the SEC yields. That is, the fund-of-funds treats its underlying holdings as stocks, regardless of what they actually are. This would explain why LifeStrategy Moderate Growth has a higher dividend yield than Balanced Index or Wellington; those two funds hold bonds directly.

This is definitely the case for Vanguard Total Corporate Bond ETF; as I noted above, it holds three other ETFs and reports a higher SEC yield than any of the three.
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Re: Questions on VTIAX (Total International) yield.

Post by Northern Flicker »

Vanguard used to publish SEC yields for non-US stock funds-- not sure why they stopped. In the past, VTIAX typically had a published yield that was 1bp higher than IXUS (iShares total int'l), perhaps reflecting that VTIAX paid slightly less foreign tax. In those years, the ER of IXUS was 1bp lower than VTIAX, and currently it is 2bp lower.

Thus, I would consider the current published SEC yield of IXUS to be a good estimate for the SEC yield of VTIAX.
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Re: Questions on VTIAX (Total International) yield.

Post by 1210sda »

Northern Flicker wrote: Sun Oct 18, 2020 4:59 pm Vanguard used to publish SEC yields for non-US stock funds-- not sure why they stopped. In the past, VTIAX typically had a published yield that was 1bp higher than IXUS (iShares total int'l), perhaps reflecting that VTIAX paid slightly less foreign tax. In those years, the ER of IXUS was 1bp lower than VTIAX, and currently it is 2bp lower.

Thus, I would consider the current published SEC yield of IXUS to be a good estimate for the SEC yield of VTIAX.
Thanks, Northern Flicker.

I looked at various sources for IXUS dividend yield. They seem to average around 2.5%.

If this is correct, then the stated yield for VSMGX is too high at 1.97%. By adding the weighted dividend yields of the four underlying funds, the yield for VSMGX is more like 1.5%

Doesn't provide me with a lot of confidence. Guess I'll just have to wait till the December distribution to get an accurate figure.

Thanks also to David Grabiner for his post.
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Re: Questions on VTIAX (Total International) yield.

Post by Leif »

Morningstar is reporting 3.26% SEC Yield for IXUS. Interestingly, iShares is reporting 2.22% as of Sept 30. They both agree on 2.60% TTM yield.
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