Talk:Tax-managed fund comparison

Reader feedback: The one thing I missed in th...
108.68.28.204 posted this comment on 4 January 2014 (view all feedback).

"The one thing I missed in the detailed tax-managed fund comparison piece's commentary on the Tax-Managed Balanced Fund is its appropriateness for those looking for a less risky investment option. Most, if not all, pure stock funds are riskier than the Tax-Managed Balanced Fund, which has a moderate risk level. Another comment I expected was that a small potential weakness of these tax-managed funds is that they are not as tax efficient when it comes to state taxes. Thank you for focusing on the tax-managed funds, which Jack Bogle, in one of his books, was surprised aren't more popular. Hilliard Harper"

Any thoughts?

Blbarnitz 02:47, 4 January 2014 (CST)

The purpose of this page is to compare the TM funds to non-TM funds with the same allocation. TM Balanced is less risky than the stock funds, but you can get the same benefit of tax management at the same risk level with 49% TM Capital Appreciation and 51% in a muni fund, and you aren't locked into the specific allocation or the specific bond fund for the future. For example, if you move to a high-tax state, you might want to switch your munis to that state's fund, but with TM Balanced, you would have a large tax bill for that switch. (This particular clarification was also added to the main page.)

The TM funds which select stocks to reduce dividends (TM Capital Appreciation and TM Balanced) have the same advantage for state income taxes as for federal income taxes. TM Small-Cap, which has 100% qualified dividends but the same yield as the ETF tracking that index, has no special state advantage.

Reader feedback: Address considerations for t...
216.15.6.226 posted this comment on 13 May 2014 (view all feedback).

"Address considerations for taxpayers subject to Alternative Minimum Tax and to state taxes on dividends. The tables showing 15/25/top bracket are misleading for AMT payers who pay high state taxes and are subject to the AMT Personal Exemption Phaseout, which makes their effect tax rate on qualified dividends exceed 25%."

Any thoughts?

Blbarnitz 03:38, 13 May 2014 (CDT)