Tax loss pair for Vanguard High Yield Tax Exempt Bond (VWALX)?

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kxl19
Posts: 56
Joined: Wed Mar 13, 2013 12:41 am

Tax loss pair for Vanguard High Yield Tax Exempt Bond (VWALX)?

Post by kxl19 » Wed Mar 25, 2020 12:16 pm

My bond portfolio has been 50% Treasuries, and 50% Muni (split between interm term - VWIUX and high-yield VWALX). (we're in the top tax brackets)

Looking for a tax loss harvest partner for VWALX due to the recent drops. I realize the yields have spiked for all muni's due to liquidity gaps. I'm considering TLH'ing both into the limited-term tax-exempt (VMLUX) or short-term tax exempt (VWSUX).

The TEY on the short-term (1-2 year duration) is higher than limited term (2-years)!.

Thoughts or other ideas?

hudson
Posts: 2334
Joined: Fri Apr 06, 2007 9:15 am

Re: Tax loss pair for Vanguard High Yield Tax Exempt Bond (VWALX)?

Post by hudson » Wed Mar 25, 2020 1:03 pm

kxl19 wrote:
Wed Mar 25, 2020 12:16 pm
Looking for a tax loss harvest partner for VWALX due to the recent drops. I realize the yields have spiked for all muni's due to liquidity gaps. I'm considering TLH'ing both into the limited-term tax-exempt (VMLUX) or short-term tax exempt (VWSUX).
Both of those would work for me.
I'd also consider VWIUX or Baird's even safer intermediate muni BMBIX.

annu
Posts: 374
Joined: Mon Nov 04, 2019 7:55 pm

Re: Tax loss pair for Vanguard High Yield Tax Exempt Bond (VWALX)?

Post by annu » Wed Mar 25, 2020 2:34 pm

I have VWLUX and VWIUX, just moving the money to settlement account for now, as need to rebalance, and also not going to plan for bonds in taxeable anymore, will maximize bonds in 401k, strating this year already doing that. As TLH in taxeable is good way to use drawdowns in the market, and also the interest/dividend you get, especially being in high interest state(~105) and no cal Muni bond fund from Vanguard, not worth the hassle over a simple high yield CD @ 3%

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