I did a 10-year review of my funds and a surprisingly good performer was the Strategic Equity Fund (https://investor.vanguard.com/investmen ... file/vseqx)
It's focused on value in small/mid-cap. I like it because:
a) It balances my large/mega-cap retirement funds.
b) It has a relatively low (for an active fund) expense ratio of 0.17%
c) It delivers capital gains so it is tax efficient in my after-tax account
d) The management seems to be stable
But it is actively managed and for that reason I'd like to diversify beyond Vanguard's offering. Are there similar funds or am I over-thinking the diversification aspect?
Vanguard's Strategic Equity Fund and Similar Funds?
Re: Vanguard's Strategic Equity Fund and Similar Funds?
I have some of this in tax advantaged space.MrCheapo wrote: ↑Tue Mar 21, 2023 4:09 pm I did a 10-year review of my funds and a surprisingly good performer was the Strategic Equity Fund (https://investor.vanguard.com/investmen ... file/vseqx)
It's focused on value in small/mid-cap. I like it because:
a) It balances my large/mega-cap retirement funds.
b) It has a relatively low (for an active fund) expense ratio of 0.17%
c) It delivers capital gains so it is tax efficient in my after-tax account
d) The management seems to be stable
But it is actively managed and for that reason I'd like to diversify beyond Vanguard's offering. Are there similar funds or am I over-thinking the diversification aspect?
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Re: Vanguard's Strategic Equity Fund and Similar Funds?
Item c) above is typically considered to have a negative tax impact because index funds don't generally deliver capital gain distributions at all. So, the overall tax cost of this fund is higher, on a relative basis.
Morningstar rates the 3-Year Tax Cost Ratio for the fund at 2.61, while the average fund for the category has a lower tax cost rating of 1.48.
In other words, those annual ST and LT capital gains distributions aren't seen as an efficiency. It's really just more "forced income" which many investors seek to avoid.
Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
Re: Vanguard's Strategic Equity Fund and Similar Funds?
I used to invest in this and understand the motivation for using it, but would absolutely never use it in a taxable account.MrCheapo wrote: ↑Tue Mar 21, 2023 4:09 pm I did a 10-year review of my funds and a surprisingly good performer was the Strategic Equity Fund (https://investor.vanguard.com/investmen ... file/vseqx)
It's focused on value in small/mid-cap. I like it because:
a) It balances my large/mega-cap retirement funds.
b) It has a relatively low (for an active fund) expense ratio of 0.17%
c) It delivers capital gains so it is tax efficient in my after-tax account
d) The management seems to be stable
But it is actively managed and for that reason I'd like to diversify beyond Vanguard's offering. Are there similar funds or am I over-thinking the diversification aspect?
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Re: Vanguard's Strategic Equity Fund and Similar Funds?
The Strategic Equity Fund (midcap) and Strategic Smallcap Equity Fund are quantitatively managed portfolios. Outperformance is not a slam dunk:MrCheapo wrote: ↑Tue Mar 21, 2023 4:09 pm I did a 10-year review of my funds and a surprisingly good performer was the Strategic Equity Fund (https://investor.vanguard.com/investmen ... file/vseqx)
https://www.portfoliovisualizer.com/bac ... ion2_2=100
I think the following is a better benchmark for the midcap one:
https://www.portfoliovisualizer.com/bac ... ion2_2=100
As noted above, capital gains distributions are just a tax drag for a stock fund in a taxable account, not a benefit.