Vanguard:Changes In Target Retirement Funds

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
User avatar
Barry Barnitz
Wiki Admin
Posts: 3026
Joined: Mon Feb 19, 2007 10:42 pm
Contact:

Vanguard:Changes In Target Retirement Funds

Post by Barry Barnitz » Mon Sep 27, 2010 10:57 am

H:

Vanguard has announced upcoming changes in their suites of Target Retirement funds by replacing the three international index funds (European, Pacific, and Emerging Market) with the Total International Index fund; and by increasing the international allocation in the funds' strategic asset allocation.

Vanguard adjusts international equity exposure in Target Retirement Funds and other balanced funds

Vanguard streamlines construction and improves diversification of Target Retirement Funds

regards,

edit: added link
Last edited by Barry Barnitz on Mon Sep 27, 2010 11:06 am, edited 1 time in total.
Image | blb | December Birthday Celebration: Ludwig van Beethoven

KyleAAA
Posts: 6799
Joined: Wed Jul 01, 2009 5:35 pm
Contact:

Post by KyleAAA » Mon Sep 27, 2010 11:02 am

This makes sense in light of the upcoming changes in the Total International Fund itself (it will include Canada and about a 13% allocation to small-caps).

User avatar
CyberBob
Posts: 3216
Joined: Tue Feb 20, 2007 2:53 pm

Post by CyberBob » Mon Sep 27, 2010 11:03 am

Wow, interesting news! One of the biggest things I didn't care for with the Target Retirement funds was that 20% international seemed just a bit too light. Now, with the change to 30%, Vanguard is looking pretty hard to beat in the target-date funds arena. This may even be a big enough change to finally convince me to simplify down to one fund :D

Bob

centrifuge41
Posts: 1185
Joined: Mon May 17, 2010 9:04 am

Post by centrifuge41 » Mon Sep 27, 2010 11:07 am

Terrific news - thanks for sharing! I own a sizable quantity of Target Retirement, as it's the only good option in my 401k (our plan has Vanguard Developed Markets and Vanguard total bond index, but it's missing index international and index domestic all cap).

This makes sense - I've always wondered why target retirement funds contained the separate international funds for developed Europe, developed Asia/Oceania, and Emerging markets.

User avatar
fluffyistaken
Posts: 1435
Joined: Fri Apr 04, 2008 1:32 pm

Post by fluffyistaken » Mon Sep 27, 2010 11:09 am

Not that an 8% move from domestic to foreign is going to make or break the fund, but coming after a decade of foreign equity out-performance it does smack of performance chasing. What has changed fundamentally or what new knowledge came to light to warrant this move?

And yes, I am well aware of all the arguments for total world market investing ;) Those arguments were just as valid when Vanguard originally constructed their Target funds, so my question is why the change now?

User avatar
Index Fan
Posts: 2559
Joined: Wed Mar 07, 2007 12:13 pm
Location: The great Midwest

Post by Index Fan » Mon Sep 27, 2010 11:09 am

By moving towards a more balanced approach to equity allocation, I'm not particularly worried about the timing. TR funds are a long-term holding.

Good job, Vanguard.
Last edited by Index Fan on Mon Sep 27, 2010 11:11 am, edited 1 time in total.
"Optimum est pati quod emendare non possis." | -Seneca

KyleAAA
Posts: 6799
Joined: Wed Jul 01, 2009 5:35 pm
Contact:

Post by KyleAAA » Mon Sep 27, 2010 11:10 am

fluffyistaken wrote:Not that an 8% move from domestic to foreign is going to make or break the fund, but coming after a decade of foreign equity out-performance it does smack of performance chasing. What has changed fundamentally or what new knowledge came to light to warrant this move?

And yes, I am well aware of all the arguments for total world market investing ;) Those arguments were just as valid when Vanguard originally constructed their Target funds, so my question is why the change now?
Maybe they just changed their mind. People do that.

mikep
Posts: 3698
Joined: Wed Apr 22, 2009 9:27 pm

Post by mikep » Mon Sep 27, 2010 11:11 am

Now Vanguard, how about some admiral shares of TR funds then you will really be in the driver's seat. Or TR fund ETF's :)

Will this be the last change now?? Or should we expect another change in a few years?

Also suggest removing the asset allocation fund of the LifeStrategy funds?
Last edited by mikep on Mon Sep 27, 2010 11:14 am, edited 1 time in total.

User avatar
Barry Barnitz
Wiki Admin
Posts: 3026
Joined: Mon Feb 19, 2007 10:42 pm
Contact:

Vanguard:Changes In Target Retirement Funds

Post by Barry Barnitz » Mon Sep 27, 2010 11:14 am

The increase in international allocations comes with the following rationale, from John Ameriks;
Why are you increasing the international allocation?

Our decision was made after careful consideration of several factors. First, a detailed quantitative analysis suggested that U.S. investors obtain maximum diversification benefits when non-U.S. stocks make up 20% to 40% of their equity portfolios. Related to that is the growth of non-U.S. stocks as a percentage of the global equity market and the declining costs of implementing and managing non-U.S. equity positions.

In addition, it is our view that we will be able to make this change with minimal transaction costs to investors at this time. Fundamentally, we believe that a modestly higher allocation to international equities has the potential to improve diversification and reduce volatility in these portfolios over the long term. Since 2006, Vanguard has advocated that U.S. investors hold 20% to 40% of their equity portfolios in non-U.S. stocks. We continue to hold that view, and this change places these funds firmly in the middle of that range.
regards,
Image | blb | December Birthday Celebration: Ludwig van Beethoven

ftobin
Posts: 1023
Joined: Fri Mar 20, 2009 3:28 pm

Re: Vanguard:Changes In Target Retirement Funds

Post by ftobin » Mon Sep 27, 2010 11:25 am

Barry Barnitz wrote:
Why are you increasing the international allocation?

Our decision was made after careful consideration of several factors. First, a detailed quantitative analysis suggested that U.S. investors obtain maximum diversification benefits when non-U.S. stocks make up 20% to 40% of their equity portfolios. Related to that is the growth of non-U.S. stocks as a percentage of the global equity market and the declining costs of implementing and managing non-U.S. equity positions.
So, in other words, the market cap of international stocks increased relative to the US stock. It seems to me that simply investing All-World from the beginning (or an equivalent mixture of domestic + foreign) would have solved this problem more directly.

I hope Vanguard's turn stops people from suggesting the 20% international allocation. Someday it is quite possible that the US will only be 10% of the world market. It would be foolish to be concentrated in one's home market in such a scenario.

User avatar
tfb
Posts: 7977
Joined: Mon Feb 19, 2007 5:46 pm
Contact:

Post by tfb » Mon Sep 27, 2010 1:38 pm

Better late than never I guess. I hope their timing works out better than last time when they increased the equity % in the target funds.
Harry Sit, taking a break from the forums.

User avatar
Opponent Process
Posts: 5157
Joined: Tue Sep 18, 2007 9:19 pm

Post by Opponent Process » Mon Sep 27, 2010 1:49 pm

tfb wrote:Better late than never I guess. I hope their timing works out better than last time when they increased the equity % in the target funds.
me too but it probably won't.

I'm a global investor, but this is market timing plain and simple, and they're late to the party.
30/30/20/20 | US/International/Bonds/TIPS | Average Age=37

User avatar
Taylor Larimore
Advisory Board
Posts: 27606
Joined: Tue Feb 27, 2007 8:09 pm
Location: Miami FL

Change in funds

Post by Taylor Larimore » Mon Sep 27, 2010 2:02 pm

I received a message from Morningstar's Dan Culloton who specializes in Vanguard funds saying that he was doing some videos with Vanguard's Gus Sauter and John Ameriks on this subject today.

We should hear soon what they have to say.
"Simplicity is the master key to financial success." -- Jack Bogle

User avatar
Index Fan
Posts: 2559
Joined: Wed Mar 07, 2007 12:13 pm
Location: The great Midwest

Post by Index Fan » Mon Sep 27, 2010 2:23 pm

If it's the right thing to do, who cares about the timing? I thought Vanguard's own research from several years back showed 30% int'l to be the sweet spot.
"Optimum est pati quod emendare non possis." | -Seneca

User avatar
nisiprius
Advisory Board
Posts: 37048
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: Vanguard:Changes In Target Retirement Funds

Post by nisiprius » Mon Sep 27, 2010 2:24 pm

I trust everyone sees the odd non-sequiturs in their explanation: "Q: Why are you increasing the international allocation? A: Since 2006, Vanguard has advocated that U.S. investors hold 20% to 40% of their equity portfolios in non-U.S. stocks. We continue to hold that view, and this change places these funds firmly in the middle of that range."

1) Given that their view has not changed, and the range did not change, what did change that made them decide to place the funds "firmly in the middle of that range" instead of at the low end?

To put it another way, if the reason for the change is that the U. S. market as a percentage of the global market has slipped, shouldn't they have changed the endpoint of the range itself? To 28%-56% rather than 20%-40%?

2) Not that it matters much, but to me "firmly in the middle of that range" is 30%, so why did they put it at 28%? Surely that's only "loosely in the middle of the range." :)
ftobin wrote:Someday it is quite possible that the US will only be 10% of the world market. It would be foolish to be concentrated in one's home market in such a scenario.
I will cross that bridge when I come to it.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

Gary D
Posts: 13
Joined: Thu Apr 22, 2010 9:33 am

Post by Gary D » Mon Sep 27, 2010 3:01 pm

Could be a good move from 20% to 30% international, but I wonder if Target Fund expense ratio increases will follow. I have never really trusted statements like this:

"In addition, it is our view that we will be able to make this change with minimal transaction costs to investors at this time."

KyleAAA
Posts: 6799
Joined: Wed Jul 01, 2009 5:35 pm
Contact:

Post by KyleAAA » Mon Sep 27, 2010 3:06 pm

Gary D wrote:Could be a good move from 20% to 30% international, but I wonder if Target Fund expense ratio increases will follow. I have never really trusted statements like this:

"In addition, it is our view that we will be able to make this change with minimal transaction costs to investors at this time."
The ER of the TR fund is merely the weighted average of the underlying funds, so my guess is that it would have a small impact since the TISM fund is more expensive than the TSM fund it replaces.

Milo
Posts: 232
Joined: Thu Dec 27, 2007 7:24 pm

Post by Milo » Mon Sep 27, 2010 3:23 pm

So are they now going to combine Total International with FTSE All-World ex-US ? Or possibly keep FTSE as large cap and small cap?

I've got FTSE All-World Ex-US, maybe I'll look into Total International once the benchmark changes to include the small caps in one fund.

User avatar
MoreCowbell
Posts: 51
Joined: Sun Mar 04, 2007 3:32 pm
Location: Midwest

Post by MoreCowbell » Mon Sep 27, 2010 3:48 pm

KyleAAA wrote:
This makes sense in light of the upcoming changes in the Total International Fund itself (it will include Canada and about a 13% allocation to small-caps).
I was unaware that they were adding international small caps. Does anybody have alink to this announcement?

Thanks.
Dan

User avatar
Index Fan
Posts: 2559
Joined: Wed Mar 07, 2007 12:13 pm
Location: The great Midwest

Post by Index Fan » Mon Sep 27, 2010 3:51 pm

Vanguard plans lower-cost shares, greater diversification for Total International Stock Index Fund
"We believe that the new target benchmark offers a better representation of the international equity universe, offering exposure across the capitalization spectrum, including small-cap issues," said Vanguard Chief Investment Officer Gus Sauter, who noted that the benchmark transition will occur during the coming months.
"Optimum est pati quod emendare non possis." | -Seneca

KyleAAA
Posts: 6799
Joined: Wed Jul 01, 2009 5:35 pm
Contact:

Post by KyleAAA » Mon Sep 27, 2010 3:52 pm

Here's the story on Morningstar:

http://news.morningstar.com/articlenet/ ... ?id=353228

Basically, they're switching to a new, more complete index that both includes small-caps AND Canada. Good move.

yobria
Posts: 5978
Joined: Mon Feb 19, 2007 11:58 pm
Location: SF CA USA

Post by yobria » Mon Sep 27, 2010 4:02 pm

All else equal, you should up your international allocation next year due to changes in div tax rates (US is less preferable).

Nick

User avatar
stemikger
Posts: 4917
Joined: Thu Apr 08, 2010 5:02 am

Post by stemikger » Mon Sep 27, 2010 4:09 pm

I like the fact that they consolidated into one fund for internationa, but not sure why they have to increase the allocation.

I like John Bogle's take on this subject. No more than 20%. I don't even want to own that much.

User avatar
Adrian Nenu
Posts: 5228
Joined: Thu Apr 12, 2007 6:27 pm

Post by Adrian Nenu » Mon Sep 27, 2010 4:11 pm

Vanguard has announced upcoming changes in their suites of Target Retirement funds by replacing the three international index funds (European, Pacific, and Emerging Market) with the Total International Index fund; and by increasing the international allocation in the funds' strategic asset allocation.
Should have used the global index or at least 50/50 US/International since day one for the TR funds' equity allocations. Glad to see Vanguard is starting to improve diversification.

Adrian
anenu@tampabay.rr.com

RobG
Posts: 1218
Joined: Wed Feb 28, 2007 12:59 am
Location: Bozeman, MT

Post by RobG » Mon Sep 27, 2010 5:02 pm

First changing bond allocation, now international. They should rename it the "moving target" fund.

User avatar
mickeyd
Posts: 4634
Joined: Fri Feb 23, 2007 3:19 pm
Location: Deep in the Heart of South Texas

Post by mickeyd » Mon Sep 27, 2010 5:18 pm

Basically, they're switching to a new, more complete index that both includes small-caps AND Canada. Good move.
I agree. I always have thought it odd that Canada was a stepchild in all of those international funds. There's a lot of good companies north of the border.
Part-Owner of Texas | | “The CMH-the Cost Matters Hypothesis -is all that is needed to explain why indexing must and will work… Yes, it is that simple.” John C. Bogle

dkturner
Posts: 1358
Joined: Sun Feb 25, 2007 7:58 pm

Post by dkturner » Mon Sep 27, 2010 5:40 pm

fluffyistaken wrote:Not that an 8% move from domestic to foreign is going to make or break the fund, but coming after a decade of foreign equity out-performance it does smack of performance chasing. What has changed fundamentally or what new knowledge came to light to warrant this move?

And yes, I am well aware of all the arguments for total world market investing ;) Those arguments were just as valid when Vanguard originally constructed their Target funds, so my question is why the change now?
Possibly the new management at the Vanguard Group during the last year or so?

User avatar
beoba
Posts: 129
Joined: Sun May 17, 2009 1:30 pm
Location: East Bay, CA

Post by beoba » Mon Sep 27, 2010 5:55 pm

While I agree with the move itself, I wonder how often they'll be changing the allocation in the future. I decided to go with a target retirement fund in order to prevent myself from tweaking the allocation to death, but now it feels like the fund may end up doing this for me.

User avatar
mickeyd
Posts: 4634
Joined: Fri Feb 23, 2007 3:19 pm
Location: Deep in the Heart of South Texas

Post by mickeyd » Mon Sep 27, 2010 6:05 pm

beoba wrote:While I agree with the move itself, I wonder how often they'll be changing the allocation in the future. I decided to go with a target retirement fund in order to prevent myself from tweaking the allocation to death, but now it feels like the fund may end up doing this for me.
You bring up a very good point beoba.

The TR type FOF seems to be very competitive these days with all of the tax advantaged plans that are competing for our tax sheltered investments.

That said, I believe that the change to Total International Index Fund is a smart move (marketing-wise) because it makes the TR funds more "consumer-friendly" since folks (unwilling to study) do not have to make decisions about Europe/Asia/EM.
Part-Owner of Texas | | “The CMH-the Cost Matters Hypothesis -is all that is needed to explain why indexing must and will work… Yes, it is that simple.” John C. Bogle

dumbmoney
Posts: 2292
Joined: Sun Mar 16, 2008 8:58 pm

Post by dumbmoney » Mon Sep 27, 2010 6:46 pm

I suspect the unstated goal of Vanguard is to be as similiar as possible to competing funds. If the average all in one fund has 30% international, then holding only 20% creates the potential for a short term performance disparity.
I am pleased to report that the invisible forces of destruction have been unmasked, marking a turning point chapter when the fraudulent and speculative winds are cast into the inferno of extinction.

User avatar
grabiner
Advisory Board
Posts: 23066
Joined: Tue Feb 20, 2007 11:58 pm
Location: Columbia, MD

Re: Vanguard:Changes In Target Retirement Funds

Post by grabiner » Mon Sep 27, 2010 6:50 pm

nisiprius wrote:I trust everyone sees the odd non-sequiturs in their explanation: "Q: Why are you increasing the international allocation? A: Since 2006, Vanguard has advocated that U.S. investors hold 20% to 40% of their equity portfolios in non-U.S. stocks. We continue to hold that view, and this change places these funds firmly in the middle of that range."
Vanguard's own Portfolio Watch disagrees with this:
International stocks making up less than 5% or more than 25% of an account group will receive a "consider" alert. International stocks making up more than 30% will receive a "caution" alert.
With the change to the balanced funds, Vanguard will need to fix this in Portfolio Watch, or else the TR funds themselves will show up as having too much international.
Wiki David Grabiner

retiredjg
Posts: 34372
Joined: Thu Jan 10, 2008 12:56 pm

Post by retiredjg » Mon Sep 27, 2010 7:01 pm

Well, now we know why Vanguard has been holding on to the two international funds that were so similar. And with this change, the "Total International Stock Market" title really fits.

The Target funds are now going to look surprisingly similar to many of the portfolio suggestions made here. It's a nice change in my opinion. Very nice. :wink:

spin_echo
Posts: 159
Joined: Sat Apr 17, 2010 9:13 pm

Post by spin_echo » Mon Sep 27, 2010 8:03 pm

this feels kind of like active management/market timing; I just hope they know what they are doing

fundtalk
Posts: 317
Joined: Tue Jun 05, 2007 3:52 pm

Post by fundtalk » Mon Sep 27, 2010 8:32 pm

Target Retirement Funds:

2006: increase equity

2010: increase international

2014: add gold?

retiredjg
Posts: 34372
Joined: Thu Jan 10, 2008 12:56 pm

Post by retiredjg » Mon Sep 27, 2010 8:36 pm

fundtalk wrote:2014: add gold?
:shock:

Beagler
Posts: 3442
Joined: Sun Dec 21, 2008 7:39 pm

Post by Beagler » Mon Sep 27, 2010 8:53 pm

spin_echo wrote:this feels kind of like active management/market timing...
Yes, it does. While some folks may welcome the change, for others it's a change in their asset allocation: the most important investment decision. This is the second major retooling of VG's TR Funds.
“The only place where success come before work is in the dictionary.” Abraham Lincoln. This post does not provide advice for specific individual situations and should not be construed as doing so.

Beagler
Posts: 3442
Joined: Sun Dec 21, 2008 7:39 pm

Post by Beagler » Mon Sep 27, 2010 8:55 pm

fundtalk wrote:Target Retirement Funds:

2006: increase equity

2010: increase international

2014: add gold?
Commodity fund might come before gold.
“The only place where success come before work is in the dictionary.” Abraham Lincoln. This post does not provide advice for specific individual situations and should not be construed as doing so.

Stevewc
Posts: 690
Joined: Fri Feb 22, 2008 8:46 pm

Post by Stevewc » Mon Sep 27, 2010 9:29 pm

Looks like some folks are (possibly) jumping to conclusions about the FTSE fund and the International fund combining?
Unless I'm the one that missed this boat?
I know several people including myself would like to see them combined but has that actually been announced to be happening???
Thanks for clarification.
Steve
Ladies and Gentiles | Monkeys and Reptiles | I come before ya, to stand behind ya, tell you something I know nothing about !!!

User avatar
Taylor Larimore
Advisory Board
Posts: 27606
Joined: Tue Feb 27, 2007 8:09 pm
Location: Miami FL

Combining international funds ?

Post by Taylor Larimore » Tue Sep 28, 2010 6:37 am

Stevewc wrote:Looks like some folks are (possibly) jumping to conclusions about the FTSE fund and the International fund combining?
Unless I'm the one that missed this boat?
I know several people including myself would like to see them combined but has that actually been announced to be happening???
Thanks for clarification.
Steve
Hi Steve:

To my knowledge, Vanguard has given no indication that they will combine Total International Stock Market Index Fund with a FTSE fund (although many of us think it would be a good idea).
"Simplicity is the master key to financial success." -- Jack Bogle

maj
Posts: 412
Joined: Wed Jun 25, 2008 2:58 pm

merging?

Post by maj » Tue Sep 28, 2010 7:23 am

By retaining two "total" international index funds, Vanguard makes it possible for an investor with a large tax loss in one fund to switch to another without missing a beat, remaining fully invested.

I am not talking about trading, just rare tax loss harvesting when it makes investment sense.

peace

maj

Ping Pong
Posts: 421
Joined: Fri Feb 20, 2009 12:51 pm

Post by Ping Pong » Tue Sep 28, 2010 7:40 am

If they would add International to the Balanced Index Fund, I'd be very happy.

retiredjg
Posts: 34372
Joined: Thu Jan 10, 2008 12:56 pm

Post by retiredjg » Tue Sep 28, 2010 8:22 am

Stevewc wrote:Looks like some folks are (possibly) jumping to conclusions about the FTSE fund and the International fund combining?
Perhaps you missed the part about significant changes coming in the Total International fund (addition of Canada and small caps). This makes it less like the FTSE fund. Now it is much like FTSE Large Cap and FTSE Small Cap together.

User avatar
nisiprius
Advisory Board
Posts: 37048
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Post by nisiprius » Tue Sep 28, 2010 9:36 am

Ping Pong wrote:If they would add International to the Balanced Index Fund, I'd be very happy.
I'd be unhappy. Unless they just happen to add it in the percentage I'm using anyway.

Seriously, what I'd really like to see is automatic rebalancing to "custom" percentages within my account. It doesn't seem any harder than the automatic exchange feature they already offer.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

Ping Pong
Posts: 421
Joined: Fri Feb 20, 2009 12:51 pm

Post by Ping Pong » Tue Sep 28, 2010 9:41 am

nisiprius wrote:
Ping Pong wrote:If they would add International to the Balanced Index Fund, I'd be very happy.
I'd be unhappy. Unless they just happen to add it in the percentage I'm using anyway...
Hmm...That means you're not happy now, unless the percentage you're using anyway is 0%.

retiredjg
Posts: 34372
Joined: Thu Jan 10, 2008 12:56 pm

Post by retiredjg » Tue Sep 28, 2010 9:52 am

Ping Pong wrote:If they would add International to the Balanced Index Fund, I'd be very happy.
That sounds like a Target Retirement Fund to me.

User avatar
wjo
Posts: 480
Joined: Fri Jan 22, 2010 12:17 pm

Post by wjo » Tue Sep 28, 2010 10:41 am

Reading down the post, I'm personally happy they are moving the international allocation to my target of 30%. With the other improvements to total international, it seems to me that the TR funds are hard to beat for simplicity PROVIDED that you are aware of the current allocation plans and are willing to MAKE CHANGES if they move away from your target allocation.

Unfortunately, because of these tweaks, it makes it very difficult to recommend the TR funds to be held in taxable b/c you might need to sell them and realize gains. (Of course, the general recommendation is to hold TR in sheltered, so this is maybe no big deal).

The real take home for me is that following these changes and on-going tweaks, we are still far away from a "fire and forget" mutual fund -- which is bad news for the majority of investors.

e5116
Posts: 407
Joined: Mon Oct 05, 2009 11:22 am

Post by e5116 » Tue Sep 28, 2010 10:45 am

Question: when are the changes to the TR supposed to take place? I assume it hasn't already. And when is the change to Total International Fund tracking a different index supposed to occur? Any indication given? Just curious...

By the way, I like the changes. :)

KyleAAA
Posts: 6799
Joined: Wed Jul 01, 2009 5:35 pm
Contact:

Post by KyleAAA » Tue Sep 28, 2010 10:59 am

wjo wrote: The real take home for me is that following these changes and on-going tweaks, we are still far away from a "fire and forget" mutual fund -- which is bad news for the majority of investors.
I disagree. For 99.9% of investors, these changes are completely a non-issue. It won't affect them even slightly. It's only the investing nerds like us who thing it matters. I would absolutely still recommend the TR funds.

Ping Pong
Posts: 421
Joined: Fri Feb 20, 2009 12:51 pm

Post by Ping Pong » Tue Sep 28, 2010 11:37 am

retiredjg wrote:
Ping Pong wrote:If they would add International to the Balanced Index Fund, I'd be very happy.
That sounds like a Target Retirement Fund to me.
Target Retirement funds don't have static allocations and don't offer Admiral shares. Before Target funds became available, Balanced funds were what everyone used for the one fund, set it and forget it approach.

Since it's cheap to hold international nowadays and the VG Balanced Index doesn't include international, it has gone from an all-in-one fund to a fund that requires you to add a separate international fund which then requires you to add another bond fund to get the equity percentage back down. Kind of screwed up if you ask me.

Stevewc
Posts: 690
Joined: Fri Feb 22, 2008 8:46 pm

Re: merging?

Post by Stevewc » Tue Sep 28, 2010 1:24 pm

maj wrote:By retaining two "total" international index funds, Vanguard makes it possible for an investor with a large tax loss in one fund to switch to another without missing a beat, remaining fully invested.
peace

maj
I just might be able to do some select lot tax loss harvesting from FTSE to the international fund. I hadn't even thought of that !!!
Refresh my mind on how to accomplish this with vanguard funds. Something about write them an e-mail and they send it back to you, right?
This could be a Possible way to move some money to the international fund without suffering a taxable event.
Where oh where is livesoft. The tax loss king?
Would this work now or wait til dust settles ?
Good or bad idea?
Talk to me people.
Steve
PS. Good catch MAJ !!!
Also, Thanks Taylor for helping me keep the facts and my mind straight. :)
Ladies and Gentiles | Monkeys and Reptiles | I come before ya, to stand behind ya, tell you something I know nothing about !!!

Post Reply