Tax consequences of holding AVGV/AVGE in a taxable account

[hiddenpower]

[Moved into a new thread from: 2022 tax costs for value ETFs --admin LadyGeek]

Here is 2022 data on the components of the tax cost of value factor ETFs, and of Vanguard's popular non-factor alternatives (both value and blend), as guidance for which ETFs should be held in a taxable account. I posted similar data for the last two years as 2021 tax costs for value ETFs and [2020] Tax costs for US and international value ETFs.

In 2022, emerging markets yields were three times US stock yields. Thus emerging markets were poor choices for a taxable account, whether you are a factor investor or not. Most developed-markets ETFs were somewhat less tax-efficient than the US counterparts. However, VSS had an extremely large foreign tax credit, which made it very tax-efficient (unless you run into a foreign tax credit limitation on Form 1116). If you hold both blend and factor funds, the blend funds were more tax-efficient in 2022, with the possible exception of emerging markets (AVES is in its first year and emerging markets were anomalous in 2022).

There is data for a few pairs of ETFs competing in the same segment. For US value, the tax differences are very small, and part of the dividend yield difference is the result of Vanguard having lower expenses (0.13%) than Avantis (0.20% for a 50/50 split) than DFA (0.29%); taxes shouldn't affect your choice of fund. For international large-cap value, IVLU and AVIV have very different profiles but similar costs; AVIV, with a lower dividend yield but less foreign tax, is more tax-efficient if you pay a high tax rate on qualified dividends (living in a high-tax state, or paying 23.8% rather than 15% federal because of high income). In an IRA, prefer AVIV because there is less lost foreign tax. DFIV has an even higher yield, and the estimated foreign tax is lower, so it is an inferior choice for a taxable account.

For each fund, the dividend yield is computed as the taxable dividend divided by the 12/30/22 share price. Note that this will be more than the distribution yield for international funds, because of the foreign tax credit.

To compute your own tax cost, take

Dividend yield * [(Qualified percentage*QDI tax rate)+((1-Qualified percentage)*normal tax rate)-FTC]

For example, a fund with 70% qualified dividends and 8% foreign tax has a tax cost in a 24% bracket of (.7*.15+.3*.24-.08)=9.7% of its dividend yield, or 0.19% if the dividend yield is 2.00% (and the distribution yield is 1.84%).

Code: Select all

Ticker  Name                                   Yield   FTC     Qualified
VTI     Vanguard Total Stock Market            1.66%   0       94%
VB      Vanguard Small-Cap                     1.54%   0       78%
VBR     Vanguard Small-Cap Value               2.03%   0       82%
AVLV    Avantis US Large-Cap Value             2.00%   0       100%        
VFVA    Vanguard Factor Value                  2.21%   0       100%
DFUV    DFA US Marketwide Value                1.74%   0       100%
AVUV    Avantis US Small-Cap Value             1.74%   0       100%

VXUS    Vanguard Total International           3.34%   7.85%   74%
VSS     Vanguard FTSE Ex-US Small-Cap          2.71%   15.48%  73%
IVLU    iShares MSCI Factor Value (large-cap)  3.91%   8.21%   100%
AVIV    Avantis International Large-Cap Value  2.97%   4.52%   89%
DFIV    DFA International Value                4.30%*  6.19%*  100%
AVDV    Avantis International Small-Cap Value  3.41%   6.95%   75%

VWO     Vanguard Emerging Markets              4.49%   8.47%   24%
AVES    Avantis Emerging Markets Value         4.07%   9.12%   55%
* - not published by fund provider; estimated from last annual report

DFA does not publish the foreign tax credit amount directly. The foreign tax from DFIV is estimated from the annual report, which gives the foreign tax as a percentage of income in the fiscal year ended 10/31/22; the dividend yield is obtained from the distribution yield by dividing by (1-6.19%). DFA also has value ETFs for US small-cap, US large-cap, and emerging markets with less than one year of data; these may be included next year.

Data sources:
Avantis: ETF Tax Information (XLS) (currently, the "Tax Distribution Information" is for 2021)

DFA: Tax Sheet (In the Document Center, click on the Tax Sheet for any ETF) and DFIV Annual Report

iShares: 2022 Distribution Summary Information

Vanguard: Vanguard funds that are eligible for the foreign tax credit (PDF) and Vanguard funds that distributed qualified dividend income. Note that Vanguard's reported foreign tax percentage is the percentage of the distribution amount, while the number in the table above is the percentage of the total dividend. For example, if a fund has a $100 dividend and $10 is withheld as foreign tax, the table would show 10/100=10%, while Vanguard would report 10/90=11.11%.

(Edited to correct AVUV and VWO yields)
(Later edit to add DFIV)

Probably a naive question but want to get it out there. You showed AVDV currently has 3.41% yield, 6.95% FTC, 75% QDI. I'm considering funds like AVGV/AVGE in a taxable and am evaluating international consequences. I just found old BH posts that mentioned there is a $20k limit for FTC. Is this $20k just based on the QDI (75% in this case), or would it be based on whatever the actual foreign amount paid is (6.95%), i.e. the former would trigger at $782k ($20,000/(.0341*.75))? I'm surprised to see the FTC is so small (6.95%). My outward guess was that the entire dividend would be withheld for the most part.

Once the $20k figure is breached or once you make it to 32% tax bracket, is it only the excess that gets the downward adjustment or is it the entire yielded amount?

[grabiner]

Probably a naive question but want to get it out there. You showed AVDV currently has 3.41% yield, 6.95% FTC, 75% QDI. I'm considering funds like AVGV/AVGE in a taxable and am evaluating international consequences. I just found old BH posts that mentioned there is a $20k limit for FTC.

$20K is not a limit for the foreign tax credit. If your foreign qualified dividends and long-term gains exceed $20K (which would require about $1M in foreign stock in your taxable account), then you have to make an adjustment on Form 1116. Qualified dividends and long-term gains taxed at 0% are not counted at all, those taxed at 15% get counted at 15/37 of their value, and those taxed at 20% get counted at 20/37 of their value. (US-source dividends and gains make the same adjustment; see the instructions for Line 1 and Line 18 of Form 1116.) This might cause your foreign tax credit to be limited, particularly since the fair adjustment would be 15/24 if you are in the 24% bracket.

You also have to make this adjustment if you are in the 32% bracket, but if you are in that bracket and your foreign tax is a typical 8% of the foreign dividends, your tax is likely to be high enough that you will get the full credit.

(Note that "foreign source long-term gains" are those gains taxed by the foreign country, which the fund might report if it realizes any capital gains. If you have your own capital gain from selling a foreign fund, that is US source because the fund is in the US and there is no foreign tax on it.)

[hiddenpower]

$20K is not a limit for the foreign tax credit. If your foreign qualified dividends and long-term gains exceed $20K (which would require about $1M in foreign stock in your taxable account), then you have to make an adjustment on Form 1116. Qualified dividends and long-term gains taxed at 0% are not counted at all, those taxed at 15% get counted at 15/37 of their value, and those taxed at 20% get counted at 20/37 of their value. (US-source dividends and gains make the same adjustment; see the instructions for Line 1 and Line 18 of Form 1116.) This might cause your foreign tax credit to be limited, particularly since the fair adjustment would be 15/24 if you are in the 24% bracket.

$1.765M portoflio (60 US / 40 Ex-US)
That's $1,050,000 in the US side, and $700,000 in the Ex-US side.
2% yield on US is $21k dividends, and 3% yield on Ex-US is $21k dividends.
So in this case the 0% would get filled with the US dividends no? And then the Ex-US side would get adjusted down.

Add on 30 years of compounding, and also income, and it seems like the Ex-US side takes a major hit.

Is there a point where holding Ex-US doesn't make sense in taxable? I see 6.95% FTC for AVDV, so from my understanding, that is the max credit you can get from the QDI.I guess that's not even that much in the grand scheme anyway.

You also have to make this adjustment if you are in the 32% bracket, but if you are in that bracket and your foreign tax is a typical 8% of the foreign dividends, your tax is likely to be high enough that you will get the full credit.

(Note that "foreign source long-term gains" are those gains taxed by the foreign country, which the fund might report if it realizes any capital gains. If you have your own capital gain from selling a foreign fund, that is US source because the fund is in the US and there is no foreign tax on it.)

How does the bolded section work out? It sounds like the adjustment would happen in this case, so you couldn't claim the full credit.

Thanks for shining light on the above. International is such a nauseating topic to ponder over; I appreciate the help understanding this.

[grabiner]

You also have to make this adjustment if you are in the 32% bracket, but if you are in that bracket and your foreign tax is a typical 8% of the foreign dividends, your tax is likely to be high enough that you will get the full credit.

(Note that "foreign source long-term gains" are those gains taxed by the foreign country, which the fund might report if it realizes any capital gains. If you have your own capital gain from selling a foreign fund, that is US source because the fund is in the US and there is no foreign tax on it.)

How does the bolded section work out? It sounds like the adjustment would happen in this case, so you couldn't claim the full credit.

Thanks for shining light on the above. International is such a nauseating topic to ponder over; I appreciate the help understanding this.

The adjustment does not limit you from taking the full credit; it just affects how the credit is computed.

Your tax credit is the lower of the actual foreign tax paid, or the fraction of your tax equal to the fraction of your taxable income which is foreign. If your total tax is $20K, and your taxable income is $150K of which $15K is foreign, then you get the full foreign tax as a credit if that tax is no more than $2K. Equivalently, in this example, your tax is 13.3% of your taxable income, so your foreign tax credit is limited to 13.3% of your foreign taxable income.

The adjustment requires you to count qualified dividends as 15/37 of their value when you compute your taxable income, both foreign income (adjust on Line 1a of Form 1116) and total income (adjust on Line 18 of Form 1116); see the Form 1116 instructions. This usually reduces the fraction of your taxable income which is foreign. But if you are in the 32% bracket, you likely pay tax of about 20% of your taxable income, so even if you have to adjust, you will usually get the full credit.

[hiddenpower]

You also have to make this adjustment if you are in the 32% bracket, but if you are in that bracket and your foreign tax is a typical 8% of the foreign dividends, your tax is likely to be high enough that you will get the full credit.

(Note that "foreign source long-term gains" are those gains taxed by the foreign country, which the fund might report if it realizes any capital gains. If you have your own capital gain from selling a foreign fund, that is US source because the fund is in the US and there is no foreign tax on it.)

How does the bolded section work out? It sounds like the adjustment would happen in this case, so you couldn't claim the full credit.

Thanks for shining light on the above. International is such a nauseating topic to ponder over; I appreciate the help understanding this.

The adjustment does not limit you from taking the full credit; it just affects how the credit is computed.

Your tax credit is the lower of the actual foreign tax paid, or the fraction of your tax equal to the fraction of your taxable income which is foreign. If your total tax is $20K, and your taxable income is $150K of which $15K is foreign, then you get the full foreign tax as a credit if that tax is no more than $2K. Equivalently, in this example, your tax is 13.3% of your taxable income, so your foreign tax credit is limited to 13.3% of your foreign taxable income.

The adjustment requires you to count qualified dividends as 15/37 of their value when you compute your taxable income, both foreign income (adjust on Line 1a of Form 1116) and total income (adjust on Line 18 of Form 1116); see the Form 1116 instructions. This usually reduces the fraction of your taxable income which is foreign. But if you are in the 32% bracket, you likely pay tax of about 20% of your taxable income, so even if you have to adjust, you will usually get the full credit.

Not following your example at all to be honest. $15k in foreign income? You're saying you can get the full credit if >$20k in foreign dividends? But wouldn't you be capped at getting the full adjusted credit? Purely because you've exceeded the $20k limit.

Let's simplify it. Suppose you have no income. $1,050,000 VTI (DIV: $21k), and $700,000 VXUS (DIV: $21k).
In this case, your US taxes will push you up to the 15% bracket and a smidge of VXUS should now be adjusted.
Keep pumping the numbers higher and all of VXUS should be adjusted.
You'll get either a credit for the adjusted VXUS FTC (and some may have to carry-over).

That's all there is too it right? You'll never get the full FTC here as the portfolio grows, only the full adjusted.

[grabiner]

You also have to make this adjustment if you are in the 32% bracket, but if you are in that bracket and your foreign tax is a typical 8% of the foreign dividends, your tax is likely to be high enough that you will get the full credit.

(Note that "foreign source long-term gains" are those gains taxed by the foreign country, which the fund might report if it realizes any capital gains. If you have your own capital gain from selling a foreign fund, that is US source because the fund is in the US and there is no foreign tax on it.)

How does the bolded section work out? It sounds like the adjustment would happen in this case, so you couldn't claim the full credit.

Thanks for shining light on the above. International is such a nauseating topic to ponder over; I appreciate the help understanding this.

The adjustment does not limit you from taking the full credit; it just affects how the credit is computed.

Your tax credit is the lower of the actual foreign tax paid, or the fraction of your tax equal to the fraction of your taxable income which is foreign. If your total tax is $20K, and your taxable income is $150K of which $15K is foreign, then you get the full foreign tax as a credit if that tax is no more than $2K. Equivalently, in this example, your tax is 13.3% of your taxable income, so your foreign tax credit is limited to 13.3% of your foreign taxable income.

The adjustment requires you to count qualified dividends as 15/37 of their value when you compute your taxable income, both foreign income (adjust on Line 1a of Form 1116) and total income (adjust on Line 18 of Form 1116); see the Form 1116 instructions. This usually reduces the fraction of your taxable income which is foreign. But if you are in the 32% bracket, you likely pay tax of about 20% of your taxable income, so even if you have to adjust, you will usually get the full credit.

Not following your example at all to be honest. $15k in foreign income? You're saying you can get the full credit if >$20k in foreign dividends? But wouldn't you be capped at getting the full adjusted credit? Purely because you've exceeded the $20k limit.

Let's simplify it. Suppose you have no income. $1,050,000 VTI (DIV: $21k), and $700,000 VXUS (DIV: $21k).
In this case, your US taxes will push you up to the 15% bracket and a smidge of VXUS should now be adjusted.
Keep pumping the numbers higher and all of VXUS should be adjusted.
You'll get either a credit for the adjusted VXUS FTC (and some may have to carry-over).

That's all there is too it right? You'll never get the full FTC here as the portfolio grows, only the full adjusted.

In your example, you would not get the full credit, but that is only partly because of the adjustment. You missed the standard deviation in the example, and with the standard deviation, your tax would be zero, so there would be no credit. But if you raise the dividends to $30K in each fund so that you have a small tax bill, you would still not get the full credit even without the adjustment.

Here is how Form 1116 works.

Let T be your total tax, and F your foreign tax.
Divide your income into US and foreign. If you must adjust, then qualified dividends and long-term gains taxed at 0% are not counted at all, those taxed at 15% are multiplied by 15/37, and those taxed at 20% are multiplied by 20/37. You now have your total and foreign gross income for the purpose of Form 1116.
Deductions not related to either US or foreign income, such as the standard deduction, are now subtracted proportionally; if 10% of your income is foreign, then 90% of the standard deduction is subtracted from US income and 10% from foreign income.
Deductions which are related to one class of income, such as self-employment tax on salary earned in the US, are subtracted only from that category.
You now have A, your total adjusted taxable income, and B, your foreign adjusted taxable income.
The credit is the lower of F and T*(B/A).

Thus, if F is at most T*(B/A), you do get the full credit, whether you adjusted or not.

Another way to look at this is that you get the full credit if F/B is at most T/A; that is, if the foreign average tax rate on the adjusted foreign taxable income is less than the IRS average tax rate on the adjusted taxable income. If T/A is high (which will happen if you are in a high tax bracket), you are likely to get the full foreign tax credit even if adjustments decreased B.

[Walkure]

Just to be clear on this, the assumption is that 100% of ordinary dividends in AVDV are foreign source income, correct?

[grabiner]

Just to be clear on this, the assumption is that 100% of ordinary dividends in AVDV are foreign source income, correct?

The calculation of the limit for the foreign tax is based on the foreign-source income distributed by the fund.

However, US-source dividends from a fund usually won't affect whether you can take the full foreign tax. The dividends which are not foreign are also not subject to foreign tax, so a fund with non-foreign dividends would not be any more likely to subject you to the limit.

For example, suppose that Fund A has 100% foreign dividends, Fund B has 100% US dividends, and Fund C has 80% foreign dividends. If your tax is 10% of your total income, and you have $8K of foreign income, then your foreign tax credit is limited to $800 (approximately; the actual calculation on Form 1116 is more complicated). If you have $8K in dividends from Fund A, and $2K from Fund B, you will get the full foreign tax credit as long as Fund A has no more than 10% of its dividends withheld as foreign tax. If you instead of $10K from Fund C, you will get the full foreign tax credit as long as Fund C has no more than 8% of its dividends withheld as foreign tax, which is equivalent to having 10% of its foreign dividends withheld.

Foreign funds can have non-foreign dividends either because they hold some US cash for liquidity, or because they have short-term US-source capital gains which are taxed as dividends.

[polldav]

Foreign Tax Credit Advice

Thanks for the explanation, 1116 has always been the only tax form I can never quite fully understand.

One thing I have always wondered that you might know - if I had a large taxable portfolio (maybe $5 million?) but no other income of any kind, do you think the FTC would be limited at some point depending on how much foreign ETF exposure I had? For example if I had no income except dividends from $3 million VOO and $2 million VXUS.

I've been trying to figure it out myself and made a spreadsheet trying to replicate the form, but I couldn't find any hypothetical scenario where I wouldn't get the full credit. But I assume there must be SOME scenario where it gets reduced, or what's the point of all the complexity.

[grabiner]

Foreign Tax Credit Advice

Thanks for the explanation, 1116 has always been the only tax form I can never quite fully understand.

One thing I have always wondered that you might know - if I had a large taxable portfolio (maybe $5 million?) but no other income of any kind, do you think the FTC would be limited at some point depending on how much foreign ETF exposure I had? For example if I had no income except dividends from $3 million VOO and $2 million VXUS.

I've been trying to figure it out myself and made a spreadsheet trying to replicate the form, but I couldn't find any hypothetical scenario where I wouldn't get the full credit. But I assume there must be SOME scenario where it gets reduced, or what's the point of all the complexity.

The purpose of the complexity is not primarily for mutual fund investors, but for others who pay much higher foreign tax. If you work in a foreign country which taxes your salary at 30%, or sold foreign property with the capital gain taxed at 30%, you will not be able to take the full credit. And the adjustment matters here because the foreign capital gain taxed at 30% was probably taxed at 15% on US tax, while the foreign salary was taxed at your full US tax rate.

For investors, you are more likely to have your credit reduced for low incomes, not high incomes, because the credit is limited to a percentage of your foreign taxable income equal to the percentage of your US taxable income you pay in tax. And the adjustment matters more if you have mostly US-source taxable income rather than foreign-source taxable income.

In your example, you would have income of $120K, including $100K in qualified dividends (assuming 2% US and 3% foreign yield, with foreign dividends 2/3 qualified). If you are married and over 65, your standard deduction is $30,700, which eliminates all the non-qualified dividends, so your taxable income is $89,300, all qualified dividends. Qualified dividends are taxed at 15% only over $89,250, so your total tax is $8, and your foreign tax credit would certainly be limited, whether you adjust or not. (The adjustment actually helps you here. Without the adjustment, your foreign tax credit would be limited to $4 because half your income is foreign. But since almost all your US income is taxed at 0%, the adjustment makes almost all your taxable income foreign and you can take a credit for the full $8.)

Now suppose that you also have $40K in other taxable income, say 85% of your Social Security or RMDs from your IRA. You have $29,300 of taxable ordinary income, with $22K taxed at 10% and $7300 taxed at 12%, and $30,050 of your qualified dividends are taxed at 15%, for a total tax of $7584. Without the adjustment rule, $60K of your $160K gross income is foreign, so the foreign tax credit would be limited to $2844. A typical foreign tax on this $60K would be $4800, so you would still be limited.

The adjustment reduces things further, although I'm not sure how the IRS treats your foreign dividends if some of your qualified dividends are taxed at 0% and some at 15%. I will assume that they are prorated. In the example above, you have $100K in qualified dividends, of which $69,950 are not taxed and $30,050 are taxed at 15%. Thus you adjust by counting .3005 of your qualified dividends at 15/37 of their value, and ignoring the rest, so you multiply by .12183. Your total income is treated as $60,000 ordinary income and $12,183 adjusted qualified dividends, for a total of $72,183. Your foreign income is $20,000 non-qualified dividends and $6,091 adjusted qualified dividends, for a total of $26,091. The limitation is thus 26091/72183=.3615 of your tax, rather than 60,000/16,000=.375. The foreign tax credit would be limited to $2742.

The reason the adjustment has little effect here is that you have similar fractions of US and foreign income which are from qualified dividends.

[polldav]

For investors, you are more likely to have your credit reduced for low incomes, not high incomes, because the credit is limited to a percentage of your foreign taxable income equal to the percentage of your US taxable income you pay in tax. And the adjustment matters more if you have mostly US-source taxable income rather than foreign-source taxable income.

Thanks for the detailed explanation, I was able to match my sheet to your exact numbers pre-adjustment which helps. Seems very hard to forecast this in advance because it relies on basically all of the most complex parts of a full tax return. I think if I want to play around with it I will have to try and integrate it into my existing tax spreadsheet - I was hoping I could just have a separate sheet to see what might happen in very low income years, because I didn't want to build myself an inefficient tax portfolio that would miss out on the FTC for a decade if I decide to retire at 50.

Sounds like even in a $0 federal tax year, I could roll over enough traditional IRA/401K money to a Roth to fill out the 10% and 12% brackets and due to the FTC phasing in as my federal taxes go up, those brackets would be effectively smaller. Hard to say how much exactly without quite a bit of Excel work at this point I think.

[Walkure]

Foreign funds can have non-foreign dividends either because they hold some US cash for liquidity, or because they have short-term US-source capital gains which are taxed as dividends.

I get that they can have non-foreign income, I just don't see that information in your table or any of the published excel sheets.

[hiddenpower]

expenses get deducted from non-qualified dividends first.

Found this comment in an old thread. Is this true for funds of funds as well? In that case if the overall ER of avgv/avge is paid from AVES nonqualified dividends, then that's a plus.

[grabiner]

expenses get deducted from non-qualified dividends first.

Found this comment in an old thread. Is this true for funds of funds as well? In that case if the overall ER of avgv/avge is paid from AVES nonqualified dividends, then that's a plus.

I don't think this was even correct when I wrote it. In particular, if a fund has multiple share classes, they all have the same qualified dividend percentage.

My guess is that I was trying to find an explanation for funds having 100% qualified dividends, and thought that expenses might contribute to that. However, what actually happens is that the IRS allows a fund with more than 95% qualified dividends to report 100%.

[RosieQ]

In terms of actual dividends is it possible that AVGE is more tax efficient than previously thought? I was expecting over 2% dividends though Y charts has current calculated yield at 0.73% compared to 2.07% for VT.

AVGE: https://ycharts.com/companies/AVGE/dividend_yield
VT: https://ycharts.com/companies/VT/dividend_yield

[8000m]

In terms of actual dividends is it possible that AVGE is more tax efficient than previously thought?

AVGE: https://ycharts.com/companies/AVGE/dividend_yield
VT: https://ycharts.com/companies/VT/dividend_yield

From a tax efficiency perspective, you should be receiving the Foreign Tax Credit from AVGE as well.

[Katietsu]

In terms of actual dividends is it possible that AVGE is more tax efficient than previously thought? I was expecting over 2% dividends though Y charts has current calculated yield at 0.73% compared to 2.07% for VT.

AVGE: https://ycharts.com/companies/AVGE/dividend_yield
VT: https://ycharts.com/companies/VT/dividend_yield

Could this just be because AVGE has an inception date of 9/29/2022 and Y charts seemed to make no adjustment for the short time frame?

[RosieQ]

In terms of actual dividends is it possible that AVGE is more tax efficient than previously thought? I was expecting over 2% dividends though Y charts has current calculated yield at 0.73% compared to 2.07% for VT.

AVGE: https://ycharts.com/companies/AVGE/dividend_yield
VT: https://ycharts.com/companies/VT/dividend_yield

Could this just be because AVGE has an inception date of 9/29/2022 and Y charts seemed to make no adjustment for the short time frame?

Most likely though Y charts is usually pretty sophisticated so I would have hoped for more accuracy. Perhaps best to first look at the direct competitor from DFA Global equities fund DGEIX which has a dividend at 1.81%. That seems more accurate. I can’t seem to get Y charts to pull up DGEIX history so here is Schwab data:

https://www.schwab.wallst.com/Prospect/ ... mbol=DGEIX

[Katietsu]

In terms of actual dividends is it possible that AVGE is more tax efficient than previously thought? I was expecting over 2% dividends though Y charts has current calculated yield at 0.73% compared to 2.07% for VT.

AVGE: https://ycharts.com/companies/AVGE/dividend_yield
VT: https://ycharts.com/companies/VT/dividend_yield

Could this just be because AVGE has an inception date of 9/29/2022 and Y charts seemed to make no adjustment for the short time frame?

Most likely though Y charts is usually pretty sophisticated so I would have hoped for more accuracy. Perhaps best to first look at the direct competitor from DFA Global equities fund DGEIX which has a dividend at 1.81%. That seems more accurate. I can’t seem to get Y charts to pull up DGEIX history so here is Schwab data:

https://www.schwab.wallst.com/Prospect/ ... mbol=DGEIX

AVGE paid a $0.41 dividend in December. Adjusted for the current price, this represents the 0.72% Y charts currently shows. ETrade gets a bit better with estimated yield. The list it as 1.45%. AVGE has a semi annual distribution schedule listed on the Avantis site. So ETrade presumably multiples the December dividend by two and adjusted for share price. Of course, given the 9/29 inception date and looking at the dividend yields of the component funds, this is still too low. It looks like it will be higher than that shown for DGEIX. It is surprising and disappointing that a fund of funds, albeit new, is not being shown with a better estimated yield.

[RosieQ]

Looks like AVGE dividend updated to 1.57% now https://ycharts.com/companies/AVGE/dividend_yield
VT at 1.97%
VTI at 1.47% VXUS 2.83% so 70/30 would be 1.878%

In other words, could it be that AVGE is MORE tax efficient because of the fund of funds and rebalancing compared to even the plain vanilla 70/30 VTI/VXUS? It is looking better and better for an all in one hold for taxable account too

[hiddenpower]

Looks like AVGE dividend updated to 1.57% now https://ycharts.com/companies/AVGE/dividend_yield
VT at 1.97%
VTI at 1.47% VXUS 2.83% so 70/30 would be 1.878%

In other words, could it be that AVGE is MORE tax efficient because of the fund of funds and rebalancing compared to even the plain vanilla 70/30 VTI/VXUS? It is looking better and better for an all in one hold for taxable account too

NGL somewhat surprising.

[RosieQ]

I’ve also been intrigued lately by Schwab intelligent portfolio. They use some of their value/small cap Fundamental funds which have some similarities to avantis. Also slightly higher fees. For around 0.2% fee you get a bit of small cap value tilt (but really mild) and also get tax loss harvesting for further post tax fee of likely 0 given that mild advantage. Could be a good all in one easy alternative.