Vanguard Tax-Exempt Bond ETF VTEB - TLH or hold on?

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PDX_Traveler
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Vanguard Tax-Exempt Bond ETF VTEB - TLH or hold on?

Post by PDX_Traveler » Thu Mar 19, 2020 1:19 pm

I am seeking some advice on which is the better approach: We put some of the college tuition money for our children needed over the next 2.5 years into VTEB tax exempt bond fund (reason for the ETF at the time was that this money was in Merrill Edge, and I wanted to stick with Vanguard ETFs/funds, and buying an ETF was convenient compared with VWIUX which is what we have in our Vanguard account). Obviously, the recent gyrations in the ETF price (compared with VWIUX in this case) have been quite an education...
My request for opinions/advice is which of these is the preferable choice:
1. Sell out of VTEB now to realize and record the short term capital losses for use later, and transfer the proceeds into, say BND (forgetting the issue of tax brackets for now as less important, especially if I have the cap losses to offset other income/cap gains). Should also add that I'd end up using other funds (e.g. from VWIUX in the retirement 'account' to make up for any shortfalls from the realized losses in VTEB over the next 2.5 years).
OR
2. Hold on to the VTEB money thinking that in the intermediate term it will recover (3,4,5 years), but use other money we have in VWIUX for college funding as needed. The VWIUX moneys were part of retirement allocation, but given retirement is ~3-5 years away, I waw viewing this as fungible between the VTEB college funds and the equivalent amount in VWIUX retirement funds.

Thanks in advance!
Last edited by PDX_Traveler on Thu Mar 19, 2020 2:13 pm, edited 2 times in total.

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Re: VTEB - TLH or hold on?

Post by abuss368 » Thu Mar 19, 2020 1:22 pm

What is VTEB?
John C. Bogle - Two Fund Portfolio: Total Stock & Total Bond. "Simplicity is the master key to financial success." || Buy Total Stock until it hurts. Then find a way to buy even more!

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Wiggums
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Re: VTEB - TLH or hold on?

Post by Wiggums » Thu Mar 19, 2020 1:24 pm

abuss368 wrote:
Thu Mar 19, 2020 1:22 pm
What is VTEB?
VTEB - Vanguard Tax-Exempt Bond ETF

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PDX_Traveler
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Re: VTEB - TLH or hold on?

Post by PDX_Traveler » Thu Mar 19, 2020 2:03 pm

Wiggums wrote:
Thu Mar 19, 2020 1:24 pm
abuss368 wrote:
Thu Mar 19, 2020 1:22 pm
What is VTEB?
VTEB - Vanguard Tax-Exempt Bond ETF
Thanks - edited to add that in subject

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Re: VTEB - TLH or hold on?

Post by abuss368 » Thu Mar 19, 2020 2:23 pm

Wiggums wrote:
Thu Mar 19, 2020 1:24 pm
abuss368 wrote:
Thu Mar 19, 2020 1:22 pm
What is VTEB?
VTEB - Vanguard Tax-Exempt Bond ETF
That is a good fund and one that I have looked at in the past. We presently have Intermediate Term Tax Exempt (i.e. the active fund). I would stay the course and perhaps add to it. Muni bonds can get a little volatile but at the end of the day the municipal governments are going to tax their resident to make the debt payments.
John C. Bogle - Two Fund Portfolio: Total Stock & Total Bond. "Simplicity is the master key to financial success." || Buy Total Stock until it hurts. Then find a way to buy even more!

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PDX_Traveler
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Re: VTEB - TLH or hold on?

Post by PDX_Traveler » Thu Mar 19, 2020 2:44 pm

abuss368 wrote:
Thu Mar 19, 2020 2:23 pm
Wiggums wrote:
Thu Mar 19, 2020 1:24 pm
abuss368 wrote:
Thu Mar 19, 2020 1:22 pm
What is VTEB?
VTEB - Vanguard Tax-Exempt Bond ETF
That is a good fund and one that I have looked at in the past. We presently have Intermediate Term Tax Exempt (i.e. the active fund). I would stay the course and perhaps add to it. Muni bonds can get a little volatile but at the end of the day the municipal governments are going to tax their resident to make the debt payments.
Thank you. By "Intermediate Term Tax Exempt (i.e. the active fund)" I assume you mean VWIUX? I was looking for opinions on whether TLH for the VTEB ETF (which is similar) would be a good idea given the current pricing offering an opportunity.

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abuss368
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Re: VTEB - TLH or hold on?

Post by abuss368 » Thu Mar 19, 2020 2:49 pm

PDX_Traveler wrote:
Thu Mar 19, 2020 2:44 pm
abuss368 wrote:
Thu Mar 19, 2020 2:23 pm
Wiggums wrote:
Thu Mar 19, 2020 1:24 pm
abuss368 wrote:
Thu Mar 19, 2020 1:22 pm
What is VTEB?
VTEB - Vanguard Tax-Exempt Bond ETF
That is a good fund and one that I have looked at in the past. We presently have Intermediate Term Tax Exempt (i.e. the active fund). I would stay the course and perhaps add to it. Muni bonds can get a little volatile but at the end of the day the municipal governments are going to tax their resident to make the debt payments.
Thank you. By "Intermediate Term Tax Exempt (i.e. the active fund)" I assume you mean VWIUX? I was looking for opinions on whether TLH for the VTEB ETF (which is similar) would be a good idea given the current pricing offering an opportunity.
Correct - that is the fund we have.
John C. Bogle - Two Fund Portfolio: Total Stock & Total Bond. "Simplicity is the master key to financial success." || Buy Total Stock until it hurts. Then find a way to buy even more!

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Re: Vanguard Tax-Exempt Bond ETF VTEB - TLH or hold on?

Post by TNOA » Thu Mar 26, 2020 11:21 pm

PDX_Traveler wrote:
Thu Mar 19, 2020 1:19 pm
I am seeking some advice on which is the better approach: We put some of the college tuition money for our children needed over the next 2.5 years into VTEB tax exempt bond fund (reason for the ETF at the time was that this money was in Merrill Edge, and I wanted to stick with Vanguard ETFs/funds, and buying an ETF was convenient compared with VWIUX which is what we have in our Vanguard account). Obviously, the recent gyrations in the ETF price (compared with VWIUX in this case) have been quite an education...
My request for opinions/advice is which of these is the preferable choice:
1. Sell out of VTEB now to realize and record the short term capital losses for use later, and transfer the proceeds into, say BND (forgetting the issue of tax brackets for now as less important, especially if I have the cap losses to offset other income/cap gains). Should also add that I'd end up using other funds (e.g. from VWIUX in the retirement 'account' to make up for any shortfalls from the realized losses in VTEB over the next 2.5 years).
OR
2. Hold on to the VTEB money thinking that in the intermediate term it will recover (3,4,5 years), but use other money we have in VWIUX for college funding as needed. The VWIUX moneys were part of retirement allocation, but given retirement is ~3-5 years away, I waw viewing this as fungible between the VTEB college funds and the equivalent amount in VWIUX retirement funds.

Thanks in advance!
Well...
"3,4,5 days" and it is back and recovered already. Has your opinion or worry changed?

annu
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Re: Vanguard Tax-Exempt Bond ETF VTEB - TLH or hold on?

Post by annu » Fri Mar 27, 2020 1:19 am

As many folks have said, makes sense to hold it long term, I got out of VWLUX(long term tax exempt) as with all the moves in market, I need to rebalance, and seems like with fed help to bond market, it is going back up, but in next two weeks when I plan to rebalance on April 15th, it might be down again as around 2-3 weeks is when things go south for Covif19 patients(if they are in risk range), we have had sudden surge of new patients this week especially, if pattern from Italy on extreme end or spain on lower end holds, we will have high death rate numbers coming out, we might have liquidity concerns temporarily again, with folks selling off either to rebalance or just panic(like last week). I hope long term no major impact, as still keeping my VWIUX(intermediate term) and I think t fits the VTEB profile better.
But yeah it has been exciting times to see bond funds go up and down, almost like stocks on so short intervals

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Re: Vanguard Tax-Exempt Bond ETF VTEB - TLH or hold on?

Post by mrspock » Fri Mar 27, 2020 1:34 am

TNOA wrote:
Thu Mar 26, 2020 11:21 pm
PDX_Traveler wrote:
Thu Mar 19, 2020 1:19 pm
I am seeking some advice on which is the better approach: We put some of the college tuition money for our children needed over the next 2.5 years into VTEB tax exempt bond fund (reason for the ETF at the time was that this money was in Merrill Edge, and I wanted to stick with Vanguard ETFs/funds, and buying an ETF was convenient compared with VWIUX which is what we have in our Vanguard account). Obviously, the recent gyrations in the ETF price (compared with VWIUX in this case) have been quite an education...
My request for opinions/advice is which of these is the preferable choice:
1. Sell out of VTEB now to realize and record the short term capital losses for use later, and transfer the proceeds into, say BND (forgetting the issue of tax brackets for now as less important, especially if I have the cap losses to offset other income/cap gains). Should also add that I'd end up using other funds (e.g. from VWIUX in the retirement 'account' to make up for any shortfalls from the realized losses in VTEB over the next 2.5 years).
OR
2. Hold on to the VTEB money thinking that in the intermediate term it will recover (3,4,5 years), but use other money we have in VWIUX for college funding as needed. The VWIUX moneys were part of retirement allocation, but given retirement is ~3-5 years away, I waw viewing this as fungible between the VTEB college funds and the equivalent amount in VWIUX retirement funds.

Thanks in advance!
Well...
"3,4,5 days" and it is back and recovered already. Has your opinion or worry changed?
Everyone together say: "Thank-you Mr. Powell!!" Always nice to have your interests aligned with that of the various governments who need to borrow huge sums of money. Driving yields lower by buying up munis --> higher muni bond prices.

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Re: Vanguard Tax-Exempt Bond ETF VTEB - TLH or hold on?

Post by Dude2 » Fri Mar 27, 2020 1:55 am

Thank you, Mr. Powell.

Yes, it could be a great time to Tax-loss harvest from the active version to the index fund or visa-versa.

schachtw
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Re: VTEB - TLH or hold on?

Post by schachtw » Fri Mar 27, 2020 6:11 am

PDX_Traveler wrote:
Thu Mar 19, 2020 2:44 pm
abuss368 wrote:
Thu Mar 19, 2020 2:23 pm
Wiggums wrote:
Thu Mar 19, 2020 1:24 pm
abuss368 wrote:
Thu Mar 19, 2020 1:22 pm
What is VTEB?
VTEB - Vanguard Tax-Exempt Bond ETF
That is a good fund and one that I have looked at in the past. We presently have Intermediate Term Tax Exempt (i.e. the active fund). I would stay the course and perhaps add to it. Muni bonds can get a little volatile but at the end of the day the municipal governments are going to tax their resident to make the debt payments.
Thank you. By "Intermediate Term Tax Exempt (i.e. the active fund)" I assume you mean VWIUX? I was looking for opinions on whether TLH for the VTEB ETF (which is similar) would be a good idea given the current pricing offering an opportunity.
Side note to this topic:
VG has removed the .25% purchase from VTEAX
(Tax Exempt Bond Fund Admiral Shares) which is the mutual fund equivalent of VTEB.

TNOA
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Re: Vanguard Tax-Exempt Bond ETF VTEB - TLH or hold on?

Post by TNOA » Fri Mar 27, 2020 10:04 am

mrspock wrote:
Fri Mar 27, 2020 1:34 am
Everyone together say: "Thank-you Mr. Powell!!" Always nice to have your interests aligned with that of the various governments who need to borrow huge sums of money. Driving yields lower by buying up munis --> higher muni bond prices.
Of course, thank you Mr. Powell, no doubt. That said, the idea is, "there is always something we don't know can happen tomorrow", and "there seems to be always something we think we know so we have the urge to make modifications to an existing portfolio in order to control things that we know how will play out in the future". I really started approaching investing with humility. I don't judge, in fact understand you more than you might think reading my lines. But in one of the other blogs, someone commented to me which struck a chord: "- If there was a good thought process for you to have 15% munis (VTEB) within your portfolio before you had more external information (e.g., virus, black swan event, Fed stepping in, scare, etc.) that has not changed today. Future is still unknown. Better STC". That is why, I am inclined to stay the course after truly struggling last week or two on VTEB's role in my portfolio. I can only hope I won't regret my decision, and best of luck to anyone who is trying their own ways to improve the odds to success, including me.

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Re: Vanguard Tax-Exempt Bond ETF VTEB - TLH or hold on?

Post by PDX_Traveler » Fri Mar 27, 2020 11:55 am

TNOA wrote:
Thu Mar 26, 2020 11:21 pm
PDX_Traveler wrote:
Thu Mar 19, 2020 1:19 pm
I am seeking some advice on which is the better approach: We put some of the college tuition money for our children needed over the next 2.5 years into VTEB tax exempt bond fund (reason for the ETF at the time was that this money was in Merrill Edge, and I wanted to stick with Vanguard ETFs/funds, and buying an ETF was convenient compared with VWIUX which is what we have in our Vanguard account). Obviously, the recent gyrations in the ETF price (compared with VWIUX in this case) have been quite an education...
My request for opinions/advice is which of these is the preferable choice:
1. Sell out of VTEB now to realize and record the short term capital losses for use later, and transfer the proceeds into, say BND (forgetting the issue of tax brackets for now as less important, especially if I have the cap losses to offset other income/cap gains). Should also add that I'd end up using other funds (e.g. from VWIUX in the retirement 'account' to make up for any shortfalls from the realized losses in VTEB over the next 2.5 years).
OR
2. Hold on to the VTEB money thinking that in the intermediate term it will recover (3,4,5 years), but use other money we have in VWIUX for college funding as needed. The VWIUX moneys were part of retirement allocation, but given retirement is ~3-5 years away, I waw viewing this as fungible between the VTEB college funds and the equivalent amount in VWIUX retirement funds.

Thanks in advance!
Well...
"3,4,5 days" and it is back and recovered already. Has your opinion or worry changed?
years compressed into days, indeed... specifically on the VTEB shares I mentioned above, I just sat and watched the price "recover" as it has. It has been an interesting dislocation to experience, for sure.
I ended up TLH with selling some lots of VWIUX to offset gains in some other equity movements (consolidating by selling some relatively smaller positions in some equity ETFs).
Thanks -

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