VCADX PLUS?

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bard
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Joined: Fri Jul 27, 2012 2:57 am

VCADX PLUS?

Post by bard »

I have 20% of my total portfolio in VCADX. Any suggestions for additional tax exempt funds to park my cash in? Outside of its long term CA muni fund, which I don't want, Vanguard doesn't seem to have other CA choices . Thank you.
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oldcomputerguy
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Re: VCADX PLUS?

Post by oldcomputerguy »

bard, welcome to Bogleheads. For the members' reference, VCADX is Vanguard California Intermediate-Term Tax-Exempt Fund Admiral Shares.
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retired@50
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Re: VCADX PLUS?

Post by retired@50 »

bard wrote: Sat Nov 21, 2020 2:42 pm I have 20% of my total portfolio in VCADX. Any suggestions for additional tax exempt funds to park my cash in? Outside of its long term CA muni fund, which I don't want, Vanguard doesn't seem to have other CA choices . Thank you.
The current yield is pitiful (.01%), but it's another tax exempt choice...

California money market fund at Vanguard.

https://investor.vanguard.com/mutual-fu ... file/VCTXX

Regards,
This is one person's opinion. Nothing more.
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Electron
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Re: VCADX PLUS?

Post by Electron »

Lower risk alternatives could include Vanguard Limited Term Tax-Exempt and Vanguard Short Term Tax-Exempt. Portfolio Visualizer is a good tool for these comparisons.

https://www.portfoliovisualizer.com/bac ... ion3_3=100

Vanguard California Long Term Tax-Exempt does not appear that much riskier than Vanguard California Intermediate Term Tax-Exempt. Take a look at the Standard Deviation and Maximum Drawdown for each fund. I hold both of these funds with a greater balance in the long term fund.

Note also the difference in income shown in the bar chart at the bottom.

https://www.portfoliovisualizer.com/bac ... ion2_2=100
Electron
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grabiner
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Re: VCADX PLUS?

Post by grabiner »

My usual recommendation for CA investors in high tax brackets is a 50/50 split between Vanguard CA Long-Term Tax-Exempt and Vanguard Limited-Term Tax-Exempt. This gets you an overall intermediate duration, with only half your bonds in CA, but more than half your bond interest exempt from CA tax.

In the 22% or 24% bracket, out-of-state munis probably aren't worthwhile, so you could hold the non-CA half of your bond allocation in Treasuries or TIPS for the CA state tax exemption.
Wiki David Grabiner
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