Vanguard Year-End distribution estimates

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delamer
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Vanguard Preliminary Estimates for Capital Gains

Post by delamer » Fri Nov 02, 2018 3:53 pm

On November 12, Vanguard is going to release preliminary estimates for 2018 year-end capital gains for their mutual funds/ETFs.

I realize this is a very broad question, but does anyone have a feel for the accuracy of these estimates in past years relative to the actual distributions?

In other words, how much can I rely on these estimates for tax and budget planning for the year? Have they tended to be quite accurate — say within a few percent? Can the accuracy vary widely by the particular product?

Any insight would be appreciated.

Gill
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Re: Vanguard Preliminary Estimates for Capital Gains

Post by Gill » Fri Nov 02, 2018 3:54 pm

My experience, a least on the funds I hold, has been that the estimates are quite accurate.
Gill

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Re: Vanguard Preliminary Estimates for Capital Gains

Post by OnTrack2020 » Fri Nov 02, 2018 5:12 pm

Gill wrote:
Fri Nov 02, 2018 3:54 pm
My experience, a least on the funds I hold, has been that the estimates are quite accurate.
Gill
This.

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Artsdoctor
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Re: Vanguard Preliminary Estimates for Capital Gains

Post by Artsdoctor » Fri Nov 02, 2018 5:47 pm

I think that "quite accurate" is a subjective term. I'd have to go back and do the calculations but the amount they estimate in November is usually lower than what's paid in December. The December distribution might be 5-10% higher, depending on the fund. And remember that if you're dealing with international funds, they will add the foreign tax to what you've been seeing throughout the year when you get your 1099.

So depending on what sort of figures you're talking about in absolute numbers, the estimate in November could be $100 off or several thousand.

rkhusky
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Re: Vanguard Preliminary Estimates for Capital Gains

Post by rkhusky » Fri Nov 02, 2018 9:20 pm

The 2017 numbers are still on the web site:
https://advisors.vanguard.com/VGApp/iip ... pGains2017
https://institutional.vanguard.com/iam/pdf/STBAYED.pdf
https://advisors.vanguard.com/VGApp/iip ... tributions

For example, Wellington Admiral

Code: Select all

                        Income            Short Cap Gain            Long Cap Gain
Nov estimate               -                               $2.79
Dec estimate             $0.46                   $0.35                       $2.59
Actual                   $0.48620               $0.3478                      $2.5672

delamer
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Re: Vanguard Preliminary Estimates for Capital Gains

Post by delamer » Mon Nov 12, 2018 11:49 am

The 2018 preliminary estimates have been posted on the Vanguard website:

https://advisors.vanguard.com/iwe/pdf/P ... 102018.pdf

EDIT: Here is a note Vanguard posted with additional information:

“Note: Funds not listed did not expect, as of October 31, 2018, to distribute capital gains in December. Also, we do not anticipate any Vanguard ETFs® will distribute capital gains.”

b0B
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Vanguard 2018 Preliminary capital gains estimates.

Post by b0B » Mon Nov 12, 2018 2:32 pm

Mark your calendar for year-end fund distributions
https://investornews.vanguard/mark-your ... butions-3/

Preliminary capital gains estimates
https://investornews.vanguard/upcoming- ... formation/

-------------------------------------------------------------------------------------------
ETA:
PDF list
http://vanguard.com/pdf/RET908704_112018.pdf

Also it says "Note: Funds not listed did not expect, as of October 31, 2018, to distribute capital gains in December. Also, we don’t anticipate any Vanguard ETFs will distribute capital gains."
Last edited by b0B on Mon Nov 12, 2018 4:05 pm, edited 1 time in total.

PFInterest
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Re: Vanguard 2018 Preliminary capital gains estimates.

Post by PFInterest » Mon Nov 12, 2018 2:59 pm

even with a month out warning, there will be still many posts of "why did my fund suddenly lose value"

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Re: Vanguard 2018 Preliminary capital gains estimates.

Post by ReformedSpender » Mon Nov 12, 2018 3:04 pm

Thank you!

:beer
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Re: Vanguard 2018 Preliminary capital gains estimates.

Post by Whakamole » Mon Nov 12, 2018 3:17 pm

Assuming the rate is the same for non-institutional, 2.11% for Total Market seems high.

b0B
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Re: Vanguard 2018 Preliminary capital gains estimates.

Post by b0B » Mon Nov 12, 2018 3:57 pm

Whakamole wrote:
Mon Nov 12, 2018 3:17 pm
Assuming the rate is the same for non-institutional, 2.11% for Total Market seems high.
Interesting. Those listed with 2.11% CGD are

Institutional Total Stock Market Index Institutional VITNX

Institutional Total Stock Market Index Institutional Plus VITPX


The usual funds, e.g.
Vanguard Total Stock Market Index Fund Admiral Shares VTSAX
are not on the list, meaning they don't anticipate CGD for it.

The only explanation I can think of is that VITNX and VITPX are share classes of one fund, whereas VTSAX, VTSMX, VTI are share classes of a different fund (even though they follow exactly the same index). Maybe being linked to the ETF really works.

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SquawkIdent
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Re: Vanguard 2018 Preliminary capital gains estimates.

Post by SquawkIdent » Mon Nov 12, 2018 4:12 pm

Thank you.

student
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Re: Vanguard 2018 Preliminary capital gains estimates.

Post by student » Mon Nov 12, 2018 4:40 pm

b0B wrote:
Mon Nov 12, 2018 3:57 pm
Whakamole wrote:
Mon Nov 12, 2018 3:17 pm
Assuming the rate is the same for non-institutional, 2.11% for Total Market seems high.
Interesting. Those listed with 2.11% CGD are

Institutional Total Stock Market Index Institutional VITNX

Institutional Total Stock Market Index Institutional Plus VITPX


The usual funds, e.g.
Vanguard Total Stock Market Index Fund Admiral Shares VTSAX
are not on the list, meaning they don't anticipate CGD for it.

The only explanation I can think of is that VITNX and VITPX are share classes of one fund, whereas VTSAX, VTSMX, VTI are share classes of a different fund (even though they follow exactly the same index). Maybe being linked to the ETF really works.
Maybe it does work. Fidelity version has an estimated distribution of 0.44% of NAV. https://www.fidelity.com/mutual-funds/i ... n/year-end $0.35 out of about $79.

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Re: Vanguard 2018 Preliminary capital gains estimates.

Post by jsmoove123 » Mon Nov 12, 2018 4:50 pm

So is the conclusion that the institutional TSM funds VITNX and VITPX do not benefit from Vanguard's special ETF/share class patent? For the vast majority of people I presume it doesn't matter since if they had some of those institutional shares, they'd be held in 401ks rather than taxable accounts.

b0B
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Re: Vanguard 2018 Preliminary capital gains estimates.

Post by b0B » Mon Nov 12, 2018 5:19 pm

jsmoove123 wrote:
Mon Nov 12, 2018 4:50 pm
So is the conclusion that the institutional TSM funds VITNX and VITPX do not benefit from Vanguard's special ETF/share class patent? For the vast majority of people I presume it doesn't matter since if they had some of those institutional shares, they'd be held in 401ks rather than taxable accounts.
I was guessing this. Maybe someone knows for sure.

rkhusky
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Re: Vanguard 2018 Preliminary capital gains estimates.

Post by rkhusky » Mon Nov 12, 2018 8:41 pm

Looks like the CG winner is Mid Cap Growth with a 12.67% cap gain rate. Wouldn't want that in my taxable account.

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Re: Vanguard Preliminary Estimates for Capital Gains

Post by grabiner » Mon Nov 12, 2018 10:36 pm

delamer wrote:
Mon Nov 12, 2018 11:49 am
The 2018 preliminary estimates have been posted on the Vanguard website:

https://advisors.vanguard.com/iwe/pdf/P ... 102018.pdf
An interesting note: the LifeStrategy and Target Retirement funds are all distributing capital gains, because the rising market has forced them to sell stocks to rebalance, and the sales apparently exceed the new investments. (This is not a disadvantage of these funds in a taxable account; if you held the individual funds, you would have to sell to rebalance if the needed rebalancing exceeded your own dividends and new investments.)

In previous years, only the post-retirement Target Retirement funds have distributed capital gains; these funds get very little in new investments (since they are intended for investors who have just retired), and they decrease their stock allocation annually. The largest distribution is in TR 2015, and TR 2020 also has a large distribution; the rest are small.

The big distributions are from the actively-managed stock and balanced funds, which is a reminder that there is a big cost for holding such funds as Capital Opportunity, Health Care, and Wellington in a taxable account; all three are much better in IRAs.
Even the low-turnover PRIMECAP and PRIMECAP Core are each distributing 6%. (With both funds normally around 10% turnover, a 6% capital gain implies that most of their sales are long-term holdings with very large gains.)
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Re: Vanguard 2018 Preliminary capital gains estimates.

Post by brokendirtdart » Mon Nov 12, 2018 10:40 pm

A shame I wasn't smarter when I was choosing funds and fund placement way back when. Capital Opportunity (VHCAX) will be a bit painful, and I'm sure Primecap's Aggressive Growth (POAGX) will be the same. :oops:

RickBoglehead
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Vanguard Year-End distribution estimates

Post by RickBoglehead » Tue Nov 13, 2018 9:14 am

Vanguard has posted their year end estimates as of 10/31/18. https://advisors.vanguard.com/VGApp/iip ... pitalGains

Actual estimates are here: https://advisors.vanguard.com/iwe/pdf/P ... 102018.pdf

Modifications / fine-tuning will be posted on December 10th, as well as etimates for dividends and interest.
https://advisors.vanguard.com/VGApp/iip ... utions2018

PFInterest
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Re: Vanguard Year-End distribution estimates

Post by PFInterest » Tue Nov 13, 2018 9:27 am

i think this popped up already.

Silk McCue
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Re: Vanguard Year-End distribution estimates

Post by Silk McCue » Tue Nov 13, 2018 9:29 am

PFInterest wrote:
Tue Nov 13, 2018 9:27 am
i think this popped up already.
Twice actually.

Cheers

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Re: Vanguard 2018 Preliminary capital gains estimates.

Post by SlowMovingInvestor » Tue Nov 13, 2018 9:40 am

brokendirtdart wrote:
Mon Nov 12, 2018 10:40 pm
A shame I wasn't smarter when I was choosing funds and fund placement way back when. Capital Opportunity (VHCAX) will be a bit painful, and I'm sure Primecap's Aggressive Growth (POAGX) will be the same. :oops:
I was thinking the same thing. VHCAX and Vanguard Health Care just hand out big CGs every year :(.

OTOH, VHCAX has done well, so it's not the worst problem in the world to have.

RickBoglehead
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Re: Vanguard Year-End distribution estimates

Post by RickBoglehead » Tue Nov 13, 2018 10:35 am

Sorry. Searched but didn't see it.

BigJohn
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Re: Vanguard Preliminary Estimates for Capital Gains

Post by BigJohn » Tue Nov 13, 2018 2:55 pm

Anyone understand why Institutional Total Sock is distributing some significant gains while apparently Adm/Inv/ETF shares are not. Are the Institutional shares not part of the shareclass grouping that allows them to take advantage of the ETF capabilities?

delamer
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Re: Vanguard Preliminary Estimates for Capital Gains

Post by delamer » Tue Nov 13, 2018 2:59 pm

BigJohn wrote:
Tue Nov 13, 2018 2:55 pm
Anyone understand why Institutional Total Sock is distributing some significant gains while apparently Adm/Inv/ETF shares are not. Are the Institutional shares not part of the shareclass grouping that allows them to take advantage of the ETF capabilities?
Is it only available in tax-advantaged plans?

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Re: Vanguard Preliminary Estimates for Capital Gains

Post by Artsdoctor » Tue Nov 13, 2018 3:41 pm

BigJohn wrote:
Tue Nov 13, 2018 2:55 pm
Anyone understand why Institutional Total Sock is distributing some significant gains while apparently Adm/Inv/ETF shares are not. Are the Institutional shares not part of the shareclass grouping that allows them to take advantage of the ETF capabilities?
I thought the same thing as well. I've never held the institutional share class so I can't say I have personal experience with it. However, if you take a look at the Distribution tabs for both the Institutional Plus share class and the Admiral class, you'll see a difference in the Realized/Unrealized Gain section of the page. The Institutional Plus shares have a realized capital gain of $1.26 per share (or 1.95%) whereas the Admiral shares have a realized loss of $0.11 (or -0.15%).

Why this has occurred is not apparent to me. The Institutional Plus shares had short- and long-term capital gain distributions in March of this year and in December of last year as well.

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Artsdoctor
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Re: Vanguard Preliminary Estimates for Capital Gains

Post by Artsdoctor » Tue Nov 13, 2018 3:47 pm

grabiner wrote:
Mon Nov 12, 2018 10:36 pm
delamer wrote:
Mon Nov 12, 2018 11:49 am
The 2018 preliminary estimates have been posted on the Vanguard website:

https://advisors.vanguard.com/iwe/pdf/P ... 102018.pdf
An interesting note: the LifeStrategy and Target Retirement funds are all distributing capital gains, because the rising market has forced them to sell stocks to rebalance, and the sales apparently exceed the new investments. (This is not a disadvantage of these funds in a taxable account; if you held the individual funds, you would have to sell to rebalance if the needed rebalancing exceeded your own dividends and new investments.)

In previous years, only the post-retirement Target Retirement funds have distributed capital gains; these funds get very little in new investments (since they are intended for investors who have just retired), and they decrease their stock allocation annually. The largest distribution is in TR 2015, and TR 2020 also has a large distribution; the rest are small.

The big distributions are from the actively-managed stock and balanced funds, which is a reminder that there is a big cost for holding such funds as Capital Opportunity, Health Care, and Wellington in a taxable account; all three are much better in IRAs.
Even the low-turnover PRIMECAP and PRIMECAP Core are each distributing 6%. (With both funds normally around 10% turnover, a 6% capital gain implies that most of their sales are long-term holdings with very large gains.)
The LifeStrategy funds have distributed both short- and long-term capital gains in the past as well. I used to hold these funds in my HSA so I was aware of this, but the amounts were relatively small (and one can offset the long-term capital gain distribution against any long-term losses as well). However, I remember those distributions as being unpredictable.

Unless you're in a low marginal tax bracket, I still don't think LifeStrategy funds are tax-efficient and should usually be held in tax-advantaged accounts.

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Re: Vanguard Preliminary Estimates for Capital Gains

Post by artking99 » Tue Nov 13, 2018 4:12 pm

Why did VHCOX has such high capital gain distribution, 8.96%? It is the highest among all six funds managed by PRIMECAP. The most similar POGRX has estimate only about 2% cap gain distribution. Even the most aggressive POAGX has only 6% distribution. It has been like this for the past couple years also. Is this kind of fishy?

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Re: Vanguard Year-End distribution estimates

Post by LadyGeek » Tue Nov 13, 2018 4:29 pm

I merged threads by b0B and RickBoglehead into here. The combined thread is in the Investing - Theory, News & General forum (news).

To new investors - Please see: Why did my fund unexpectedly drop in value
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Re: Vanguard Preliminary Estimates for Capital Gains

Post by Silk McCue » Tue Nov 13, 2018 4:43 pm

artking99 wrote:
Tue Nov 13, 2018 4:12 pm
Why did VHCOX has such high capital gain distribution, 8.96%? It is the highest among all six funds managed by PRIMECAP. The most similar POGRX has estimate only about 2% cap gain distribution. Even the most aggressive POAGX has only 6% distribution. It has been like this for the past couple years also. Is this kind of fishy?
It sounds to me like they are buying and selling stuff. Does that sound fishy to you for a fund named "Vanguard Capital Opportunity Fund"?

Why does it matter if their results are different than other PRIMECAP managed funds? Do they have the same objectives, the same managers, are the supposed to have similar results?

Do you hold this fund in your portfolio?

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Re: Vanguard Year-End distribution estimates

Post by InvestorNewb » Tue Nov 13, 2018 7:07 pm

Where are the estimates for the ETFs posted?
My Portfolio: VTI [US], VXUS [Int'l], VNQ [REIT], VCN [Canada] (largest to smallest)

b0B
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Re: Vanguard Year-End distribution estimates

Post by b0B » Tue Nov 13, 2018 7:36 pm

InvestorNewb wrote:
Tue Nov 13, 2018 7:07 pm
Where are the estimates for the ETFs posted?
They are all there! :wink:

delamer
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Re: Vanguard Year-End distribution estimates

Post by delamer » Tue Nov 13, 2018 7:38 pm

InvestorNewb wrote:
Tue Nov 13, 2018 7:07 pm
Where are the estimates for the ETFs posted?
You missed the note from Vanguard in my previous post:

“Also, we don’t anticipate any Vanguard ETFs will distribute capital gains."

b0B
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Re: Vanguard Year-End distribution estimates

Post by b0B » Tue Nov 13, 2018 7:40 pm


drzzzzz
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Re: Vanguard Year-End distribution estimates

Post by drzzzzz » Tue Nov 13, 2018 9:13 pm

The capital opportuniy VHCAX capital gains distribution is high enough that I decided to try to simplify and make my portfolio more tax efficient since I really don't want to pay taxes on the 8.96% that they anticipate distributing - going to open up a donor advised fund with the shares, but at Fidelity, not Vanguard.

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