Looking for a Tax-Managed Small Cap Blend Fund

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JSparks
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Looking for a Tax-Managed Small Cap Blend Fund

Post by JSparks »

I'm looking for a low-fee tax-managed small cap blend fund other than Vanguard's VTMSX. Nothing is coming up in my search though. Any suggestions?
gtwhitegold
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Re: Looking for a Tax-Managed Small Cap Blend Fund

Post by gtwhitegold »

Any core small cap ETF should work. Some examples that come to mind are:

DFAS - DFA Small Cap ETF
VIOO - Vanguard S&P Small-Cap 600 ETF
ISCB - iShares Morningstar Small-Cap ETF

Most ETFs do not distribute much in capital gains. What you may need to watch out for is dividend yield for whichever fund you choose.
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retired@50
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Re: Looking for a Tax-Managed Small Cap Blend Fund

Post by retired@50 »

JSparks wrote: Wed Aug 03, 2022 4:06 pm I'm looking for a low-fee tax-managed small cap blend fund other than Vanguard's VTMSX.
Why?

I find VTMSX to be a good, low cost, way to gain exposure to the small cap portion of the US market.

What do you find lacking in this fund?

Regards,
This is one person's opinion. Nothing more.
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JSparks
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Re: Looking for a Tax-Managed Small Cap Blend Fund

Post by JSparks »

retired@50 wrote: Thu Aug 04, 2022 10:11 am
JSparks wrote: Wed Aug 03, 2022 4:06 pm I'm looking for a low-fee tax-managed small cap blend fund other than Vanguard's VTMSX.
Why?

I find VTMSX to be a good, low cost, way to gain exposure to the small cap portion of the US market.

What do you find lacking in this fund?

Regards,
I agree. It is a great fund and well-suited for my portfolio due to my tax bracket. But we're transferring the portfolio to Fidelity and planning to consolidate all of our taxable accounts there as well. I'm not sure how I can add to my holdings in VTMSX if we close our VG account once the transfer is complete (other than paying the $50 commission to Fidelity).
dcabler
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Re: Looking for a Tax-Managed Small Cap Blend Fund

Post by dcabler »

JSparks wrote: Thu Aug 04, 2022 10:48 am
retired@50 wrote: Thu Aug 04, 2022 10:11 am
JSparks wrote: Wed Aug 03, 2022 4:06 pm I'm looking for a low-fee tax-managed small cap blend fund other than Vanguard's VTMSX.
Why?

I find VTMSX to be a good, low cost, way to gain exposure to the small cap portion of the US market.

What do you find lacking in this fund?

Regards,
I agree. It is a great fund and well-suited for my portfolio due to my tax bracket. But we're transferring the portfolio to Fidelity and planning to consolidate all of our taxable accounts there as well. I'm not sure how I can add to my holdings in VTMSX if we close our VG account once the transfer is complete (other than paying the $50 commission).
As noted above, pretty much any ETF in this category is going to meet your requirement of being tax-managed, by the nature of ETF's themselves which rarely pay out capital gains.

Now, there is no unified definition of what "small cap blend" even means as each index out there has a slightly different definition and, of course, Morningstar has its own definition as well when you start to compare funds. Just depends on how much you care about that.

If you don't care much about that, then find a good screener, choose US small cap funds, and sort on e/r, but also pay attention to the total assets of candidate funds to make sure that what you choose is big enough that it's not in danger of closing soon for some reason. Also, just to be complete, double check that capital gains distributions remain very rare for any of your potential choices.

Cheers.
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retired@50
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Re: Looking for a Tax-Managed Small Cap Blend Fund

Post by retired@50 »

JSparks wrote: Thu Aug 04, 2022 10:48 am
retired@50 wrote: Thu Aug 04, 2022 10:11 am
JSparks wrote: Wed Aug 03, 2022 4:06 pm I'm looking for a low-fee tax-managed small cap blend fund other than Vanguard's VTMSX.
Why?

I find VTMSX to be a good, low cost, way to gain exposure to the small cap portion of the US market.

What do you find lacking in this fund?

Regards,
I agree. It is a great fund and well-suited for my portfolio due to my tax bracket. But we're transferring the portfolio to Fidelity and planning to consolidate all of our taxable accounts there as well. I'm not sure how I can add to my holdings in VTMSX if we close our VG account once the transfer is complete (other than paying the $50 commission to Fidelity).
If moving to Fidelity, then I'd probably use the VIOO ETF, which also tracks the S&P small cap 600 index, so it should perform similarly.

Regards,
This is one person's opinion. Nothing more.
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JSparks
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Re: Looking for a Tax-Managed Small Cap Blend Fund

Post by JSparks »

retired@50 wrote: Thu Aug 04, 2022 11:11 am
JSparks wrote: Thu Aug 04, 2022 10:48 am
retired@50 wrote: Thu Aug 04, 2022 10:11 am
JSparks wrote: Wed Aug 03, 2022 4:06 pm I'm looking for a low-fee tax-managed small cap blend fund other than Vanguard's VTMSX.
Why?

I find VTMSX to be a good, low cost, way to gain exposure to the small cap portion of the US market.

What do you find lacking in this fund?

Regards,
I agree. It is a great fund and well-suited for my portfolio due to my tax bracket. But we're transferring the portfolio to Fidelity and planning to consolidate all of our taxable accounts there as well. I'm not sure how I can add to my holdings in VTMSX if we close our VG account once the transfer is complete (other than paying the $50 commission to Fidelity).
If moving to Fidelity, then I'd probably use the VIOO ETF, which also tracks the S&P small cap 600 index, so it should perform similarly.

Regards,
Thank you. Is it suitable for use in a taxable account (where the owner is in a high tax bracket)?
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vineviz
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Re: Looking for a Tax-Managed Small Cap Blend Fund

Post by vineviz »

JSparks wrote: Thu Aug 04, 2022 11:12 am
retired@50 wrote: Thu Aug 04, 2022 11:11 am
JSparks wrote: Thu Aug 04, 2022 10:48 am
retired@50 wrote: Thu Aug 04, 2022 10:11 am
JSparks wrote: Wed Aug 03, 2022 4:06 pm I'm looking for a low-fee tax-managed small cap blend fund other than Vanguard's VTMSX.
Why?

I find VTMSX to be a good, low cost, way to gain exposure to the small cap portion of the US market.

What do you find lacking in this fund?

Regards,
I agree. It is a great fund and well-suited for my portfolio due to my tax bracket. But we're transferring the portfolio to Fidelity and planning to consolidate all of our taxable accounts there as well. I'm not sure how I can add to my holdings in VTMSX if we close our VG account once the transfer is complete (other than paying the $50 commission to Fidelity).
If moving to Fidelity, then I'd probably use the VIOO ETF, which also tracks the S&P small cap 600 index, so it should perform similarly.

Regards,
Thank you. Is it suitable for use in a taxable account (where the owner is in a high tax bracket)?
As much as VTMSX was.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch
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retired@50
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Re: Looking for a Tax-Managed Small Cap Blend Fund

Post by retired@50 »

JSparks wrote: Thu Aug 04, 2022 11:12 am
retired@50 wrote: Thu Aug 04, 2022 11:11 am
JSparks wrote: Thu Aug 04, 2022 10:48 am
retired@50 wrote: Thu Aug 04, 2022 10:11 am
JSparks wrote: Wed Aug 03, 2022 4:06 pm I'm looking for a low-fee tax-managed small cap blend fund other than Vanguard's VTMSX.
Why?

I find VTMSX to be a good, low cost, way to gain exposure to the small cap portion of the US market.

What do you find lacking in this fund?

Regards,
I agree. It is a great fund and well-suited for my portfolio due to my tax bracket. But we're transferring the portfolio to Fidelity and planning to consolidate all of our taxable accounts there as well. I'm not sure how I can add to my holdings in VTMSX if we close our VG account once the transfer is complete (other than paying the $50 commission to Fidelity).
If moving to Fidelity, then I'd probably use the VIOO ETF, which also tracks the S&P small cap 600 index, so it should perform similarly.

Regards,
Thank you. Is it suitable for use in a taxable account (where the owner is in a high tax bracket)?
I think it would be suitable in a taxable account. It's got an SEC yield of 1.31% so the dividend income from the fund shouldn't be too bad, plus, since it's an ETF, it's unlikely to issue any capital gains distributions.

Regards,
This is one person's opinion. Nothing more.
Blue456
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Re: Looking for a Tax-Managed Small Cap Blend Fund

Post by Blue456 »

JSparks wrote: Thu Aug 04, 2022 10:48 am
retired@50 wrote: Thu Aug 04, 2022 10:11 am
JSparks wrote: Wed Aug 03, 2022 4:06 pm I'm looking for a low-fee tax-managed small cap blend fund other than Vanguard's VTMSX.
Why?

I find VTMSX to be a good, low cost, way to gain exposure to the small cap portion of the US market.

What do you find lacking in this fund?

Regards,
I agree. It is a great fund and well-suited for my portfolio due to my tax bracket. But we're transferring the portfolio to Fidelity and planning to consolidate all of our taxable accounts there as well. I'm not sure how I can add to my holdings in VTMSX if we close our VG account once the transfer is complete (other than paying the $50 commission to Fidelity).
You can set up automatic investment at $5.
Northern Flicker
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Re: Looking for a Tax-Managed Small Cap Blend Fund

Post by Northern Flicker »

JSparks wrote: Thu Aug 04, 2022 10:48 am
retired@50 wrote: Thu Aug 04, 2022 10:11 am
JSparks wrote: Wed Aug 03, 2022 4:06 pm I'm looking for a low-fee tax-managed small cap blend fund other than Vanguard's VTMSX.
Why?

I find VTMSX to be a good, low cost, way to gain exposure to the small cap portion of the US market.

What do you find lacking in this fund?

Regards,
I agree. It is a great fund and well-suited for my portfolio due to my tax bracket. But we're transferring the portfolio to Fidelity and planning to consolidate all of our taxable accounts there as well. I'm not sure how I can add to my holdings in VTMSX if we close our VG account once the transfer is complete (other than paying the $50 commission to Fidelity).
IJR would be an alternative to VTMSX. It has a lower ER, also tracks the S&P600 SC index, and it has actually been slightly more tax-efficient than VTMSX in the past (higher percentage of QDI), but VTMSX was higher in 2021.
My postings are my opinion, and never should be construed as a recommendation to buy, sell, or hold any particular investment.
rkhusky
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Re: Looking for a Tax-Managed Small Cap Blend Fund

Post by rkhusky »

You could look at VB, which has an SEC yield of 1.32%.

Or put VBK in taxable (SEC yield = 0.49%) and VBR in tax-advantaged (SEC yield = 1.87%).

edit:
2021 QDI
VB= 81.65%
VBK= 96.17%
VBR= 84.81%
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JSparks
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Re: Looking for a Tax-Managed Small Cap Blend Fund

Post by JSparks »

Thank you all for the suggestions! :sharebeer
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