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What ETF to use to harvest VXUS losses?

Posted: Sat Aug 29, 2015 2:41 pm
by nptit
This will be my first time tax loss harvesting.
To confirm my strategy will be:
Sell my entire position in VXUS and buy VEU then wait 30 days and swap back.
When is the right time to swap back? If VEU rises and I swap i'll just have the losses offset by the gains. The ideal situation seems to be to swap back and hope the 30 days is flat or down resulting in little or negative taxes on the swap back.
Also is VEU the ETF one should choose when tax loss harvesting VXUS?

Re: What ETF to use to harvest VXUS losses?

Posted: Sat Aug 29, 2015 2:55 pm
by retiredjg
Your alternate fund should be one you are willing to live with. You may not get the opportunity to swap back.

Re: What ETF to use to harvest VXUS losses?

Posted: Sat Aug 29, 2015 2:56 pm
by iceport
There's no way of knowing the "right time" to swap back in advance. As a matter of fact, the opportunity might be a long time coming — or it might never come. So it's important that the replacement fund be one that you are willing to hold indefinitely.

VEU/VXUS make an excellent TLH pair, because they are so very similar. So it would be fine to hold VEU as an indefinite substitute for VXUS. If the loss of small caps is that big a deal (and it's debatable whether the percentage of small caps in VXUS is enough to make a real difference) you could add something like VSS, if you need to, down the road.

Re: What ETF to use to harvest VXUS losses?

Posted: Sat Aug 29, 2015 3:15 pm
by baw703916
retiredjg wrote:Your alternate fund should be one you are willing to live with. You may not get the opportunity to swap back.
What's your recommendation?

Re: What ETF to use to harvest VXUS losses?

Posted: Sat Aug 29, 2015 5:19 pm
by retiredjg
I don't usually make a recommend for TLH partners, but I don't see a problem with Total International Stock vs All World except US myself.

If I were doing to do it, I'd probably also buy the All World except US small cap fund as well - so as not to miss out on the small caps in case I have to hold it several years.