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Are Vanguard mutual funds as or nearly as tax-efficient as ETFs?
Posted: Wed Dec 30, 2015 1:39 pm
by Pointedstick
I'm strongly considering moving my taxable account to Vanguard so I can automate purchases with their auto-investment feature, which I use and love for my wife and my IRAs, and I find that it really helps me keep my sanity by letting me totally forget about these accounts, insulating me from the short-term churn. However Vanguard only offers the auto-investment feature for mutual funds and not ETFs, and I know that in general, mutual funds are less tax-efficient than ETFs, which could be an issue since this is for a taxable account. Does anybody know if Vanguard mutual funds are better than average in this department, or otherwise not a bad idea to hold in a taxable account vs equivalent ETFs?
Re: Are Vanguard mutual funds as or nearly as tax-efficient as ETFs?
Posted: Wed Dec 30, 2015 2:56 pm
by Pointedstick
Only Vanguard has auto-investment, where I can tell them to withdraw such-and-such amount of money every month and then use that money to buy such-and-such backed of investments. It's not about the convenience so much as it is enabling me to truly forget about the portfolio.
Re: Are Vanguard mutual funds as or nearly as tax-efficient as ETFs?
Posted: Wed Dec 30, 2015 3:30 pm
by Pointedstick
Perfect. Thanks, Desert!
Re: Are Vanguard mutual funds as or nearly as tax-efficient as ETFs?
Posted: Wed Dec 30, 2015 5:14 pm
by dualstow
Vanguard does offer some "Tax-Managed" funds. I really thought they had more, but I only see three on their list of funds right now, e.g. tax-managed smallcap. I have never used those tax-managed ones, but I use Vanguard funds for my pp and some of my vp.