fund equivalent to the EAFE index - avoid wash sale?

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btownguy
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fund equivalent to the EAFE index - avoid wash sale?

Post by btownguy » Wed Dec 16, 2009 2:31 pm

I'm gearing up to harvest some tax losses. I have a large position in FSIVX - a Fidelity fund that tracks the MCSI-EAFE index (.07% ER). What should I look to exchange this for that would allow me to avoid a wash sale? I can sell and buy in a single transaction.

livesoft
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Post by livesoft » Wed Dec 16, 2009 2:46 pm

VFWIX or VEU
I think VEA and EFA are probably too close for even me.

See also the developed foreign markets discussion at www.altruistfa.com/dfavanguard.htm

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HueyLD
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Post by HueyLD » Wed Dec 16, 2009 2:52 pm

You can purchase VEU with the proceed. VEU has all EAFE countries plus our wonderful neighbor of Canada and emerging markets. As of 11/30/2009, the EAFE had 35% in VPL stocks and 65% in VGK stocks.

On the same date, the VEU had 26% in VPL stocks, 48% in VGK stocks, 6% in EWC stocks and 20% in emerging markets. (Corrected to incorporate EM % that I forgot the first time)
Last edited by HueyLD on Wed Dec 16, 2009 6:27 pm, edited 1 time in total.

btownguy
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Post by btownguy » Wed Dec 16, 2009 2:56 pm

VEU is the same one I was coming up with in my analysis as well. The ER for VEU is 0.25% and the ER for FSIVX is 0.17% I forgot they increased it just a bit this year. The transaction fee should be negligible given the size of this particular transaction. Looks like we have a winner.

ruud
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Post by ruud » Wed Dec 16, 2009 3:17 pm

keep in mind that VEU contains emerging markets, which the EAFE index doesn't contain, afaik.

--ruud
"A good plan, violently executed now, is better than a perfect plan next week."

btownguy
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Post by btownguy » Wed Dec 16, 2009 3:20 pm

Yes, it will tilt my overall equity portfolio towards EM slightly in the same way that my FSTVX (total US stock market) tilts me a bit towards small cap. VEU is market-cap weighted though, yes? So EM should be a small portion of VEU?

ruud
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Post by ruud » Wed Dec 16, 2009 3:30 pm

looks like VEU has about 24% emerging markets in it: https://personal.vanguard.com/us/funds/ ... IntExt=INT
"A good plan, violently executed now, is better than a perfect plan next week."

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SpringMan
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Post by SpringMan » Wed Dec 16, 2009 9:33 pm

If you are just going into the new position for 31 days and then go back into FSIVX, you could use one of Fidelity's active international funds like FDIVX or FIGRX. The expense ratios are higher but just for 31 days. There is a 30 day redemption fee of 1% but you will hold it longer. That way you avoid a brokerage fee.
Best Wishes, SpringMan

btownguy
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Post by btownguy » Thu Dec 17, 2009 10:16 am

SpringMan wrote:If you are just going into the new position for 31 days and then go back into FSIVX, you could use one of Fidelity's active international funds like FDIVX or FIGRX. The expense ratios are higher but just for 31 days. There is a 30 day redemption fee of 1% but you will hold it longer. That way you avoid a brokerage fee.
The challenge here is to find one that is close enough to the MCSI-EAFE index without actually tracking that particular index.

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