Consolidating portfolio

willmatt72

I've decided that I've developed the mutual fund sickness of being a fund collector. I'm sure there are others who suffer from this malady. The first step is admitting to the problem, so.....with that in mind, I've decided to consolidate my portfolio so it's more manageable and not duplicative. The first step is to whittle down some of my balanced funds, which are numerous. Currently, I hold VWENX, VTMFX in taxable accounts and FBALX, JABAX and GAOAX in tax-deferred accounts. The tax deferred accounts are easier to deal with, but VWENX poses more of a problem because I've amassed considerable capital gains and a sale would trigger a big tax bill. OTOH, VWENX is not a tax efficient holding to begin with, but I purchased it many years ago when I knew nothing about the concept of tax efficient holdings. I do hold VTMFX in a taxable account due to the municipal income generated by it. Any suggestions for consolidating these funds? Holding five balanced funds seems a bit much to me. Thanks in advance.

Dex

How about picking the funds you want to continue to contribute to and those you don't? But, don't sell anything.

Ted

@willmatt72 Keep VWENX & VTMFX, sell the rest.
Regards,
Ted

Sven

I would keep VTMFX in taxable account, and sell VWENX over several years to spread the tax burden. If you have assess to VWENX, I would use it over the rest of the balanced funds.

willmatt72

Sven said:

I would keep VTMFX in taxable account, and sell VWENX over several years to spread the tax burden. If you have assess to VWENX, I would use it over the rest of the balanced funds.

I understand your first point, Sven, but not your second idea about having access to VWENX and use it over the rest of the balanced funds. Can you explain? Thanks.

Sven

@willmatt72, there is no compelling reason to hold three balanced funds in your tax deferred account. Are those your only choice in each separate account? If you are use a brokerage like Schwab or vanguard, you have access to many balanced funds, some requires transaction fee and some don't depending if they are on the No-Fee platform or not. Personally I prefer VWENX base on their low ER and excellent long term record. I am much less familiar with the ones you posted. If I would use more than one balanced fund, I want to understand the strategies they use are sufficient different for the sake of manager diversification. Otherwise they are redundant.

davidrmoran

JABAX is notably better than most, but may overlap. Look for equity cap size and foreign for starters, to gauge holding more than one.

willmatt72

Sven said:

@willmatt72, there is no compelling reason to hold three balanced funds in your tax deferred account. Are those your only choice in each separate account? If you are use a brokerage like Schwab or vanguard, you have access to many balanced funds, some requires transaction fee and some don't depending if they are on the No-Fee platform or not. Personally I prefer VWENX base on their low ER and excellent long term record. I am much less familiar with the ones you posted. If I would use more than one balanced fund, I want to understand the strategies they use are sufficient different for the sake of manager diversification. Otherwise they are redundant.

I agree that they are somewhat redundant; that's why I'm trying to consolidate them. All of my tax deferred accounts are held with Fidelity. Purchasing VWENX would incur a $75.00 transaction fee at Fidelity. I hold VWENX in a taxable account with Vanguard. Great fund but not very tax efficient in a taxable account.

I hold FBALX in a 401K with Fidelity. I chose it because it was one of the only good funds available for my 401K.

davidrmoran

I would never pay fund purchase charges at Fido; if I feel really strongly, I will go directly to the parent company (Vanguard e.g.). JABAX used to be NTF at Fido.

Since the Fido guys started, fall 08, it very slightly outdoes VWENX. As does JABAX, again very slightly. I would not bother with Vanguard myself, and certainly not to pay for it.

In my Fido accounts VWENX is unavailable at any fee, being an Admiral, and VWELX is closed. Fee may be $50, note, not sure.

Anna

davidrmoran said:

In my Fido accounts VWENX is unavailable at any fee, being an Admiral, and VWELX is closed. Fee may be $50, note, not sure.

Although the fee on such transactions from my husband's workplace brokerage window would be $75, I believe we are stopped from purchase of Wellington due to the closure too. (We do have access via one of our Roth accounts at Vanguard, though.)

willmatt72

As I said in my OP, I own VWENX in a taxable account. It's been a great fund, just not tax efficient. The other balanced fund that I own GAOAX, seems to be the most different from the others. I think the main issue lies with JABAX Vs. FBALX. There's probably no need to own both.

davidrmoran

Right, sorry. No need to switch Vang for something else unless you have losses, sure. No harm in being led by Pinto (Janus) and by the Fido guys, both groups, both real good. But since you wish to consolidate, I would flip a coin; you will not go wrong. I myself feel Pinto et alia are v smart and do smart things, but I always like to see what Fido are up to as well, more daring and a way way bigger support staff. So I might sit tight. How is that for unhelpful?

willmatt72

davidrmoran said:

Right, sorry. No need to switch Vang for something else unless you have losses, sure. No harm in being led by Pinto (Janus) and by the Fido guys, both groups, both real good. But since you wish to consolidate, I would flip a coin; you will not go wrong. I myself feel Pinto et alia are v smart and do smart things, but I always like to see what Fido are up to as well, more daring and a way way bigger support staff. So I might sit tight. How is that for unhelpful?

Great job, David Kidding of course. I do see your point. If one is unsure, it's best to do nothing sometimes.

davidrmoran

True dat.

Always glad to be unhelpful; in investing it's often second nature !

I did not mention, and you can find this out for yourself and see how it comports, that Pinto et alia get notably lower risk ratings than Fido and maybe even Vanguard. Fido seldom notionally aims for that, as you probably know, and when it happens (Tillinghast, Danoff) it's a byproduct of their solid work and ultraprudent research blah blah.

I write this though without looking at latest UI here.

linter

if the size of the transaction is big enough, i don't care about fidos fees. don't like em of course but don't care. and then for future purchases, just do the DCA thing, even if for only one time, and the cost is $5.

msf

If you want to avoid the $49.95 (or $75) initial fee, you can even open the account directly with the fund, and do an in kind transfer to Fidelity. Unlike brokerages, funds typically don't charge a fee for transferring an account to another institution.

This should even work for Vanguard Wellington which is open to new investors, just not at third parties.

davidrmoran

Subsequent dca has a charge too?? Wow, $5 per hit. Even if it is 6 shares? I thought we were all told always to mind fees. Why pay extra unless the performance is significantly superior? And does Vanguard have anything that is *significantly* superior to anyone else? Their whole thing is really inexpensive excellence or if not excellence then good-enoughness, no?

I would suggest looking at BoA/ML for zero-commission options, though that would not solve this Vanguard problem. If you really must have that fund over all others, go w Vanguard directly, and then do the xfer msf describes, if possible.