Hello,
I'm new here and am an accumulator in late-40's with about 10 years before I call it quit. My tax deferred spaces are pretty much filled with target date funds/moderate allocation funds. I'm wondering what funds you hold and possibly why?
Our taxable is about 25% of the portfolio. With some selling/buying this year, the current holdings include:
BIAWX (Brown Advisory Sustainable Growth Fund) - Large-cap (with some mid-cap) growth
MIOPX (Morgan Stanley Institutional Fund) - Foreign large growth, with 30-40% in EM
VGWLX (Vanguard Global Wellington) - 65/35, large value/blend, corp bonds
BIV (Vanguard Intermediate-Term Bond) - Treasuries and corp bonds, no MBS
VWAHX (Vanguard High-Yield Tax-Exempt Fund) - High yield muni with better credit than most
VGWLX - I recently discovered that this fund is not available for automatic investment at Fidelity. As I don't want to pay $75 TF for every addition, this one is likely to go.
Thanks,
soaring
Comments
I could offer more comments about what I own, and why. But you'll probably get better tips if you explain your investing comfort level a little more.
@Irwilliams VTMFX would be a good core if available at Fidelity. (TAIAX) American Funds Tax-Aware Conservative Growth and Income is okay, but trails VTMFX pretty much all periods.
Several AF's (as 1/3 of another account) as core positions
Lots of quality dividend stocks (nearly all QDI) that reinvest and accumulate.
A few speculative trades in one of my taxable accounts
The only tax efficiency I worry about is balancing capgains/losses. Fund cap gains means I can afford to lose some more cap losses on spec trades. Normally I try to keep that difference under $1000/year if I can help it, even when I'm moving lots of stuff around.
I'ld get a good utility fund, a good consumer staple fund. Fido has all those flavors, although the turnover is a little high for my taste. I like GLFOX for my infrastructure fund. The expense ratio has been declining slowly but steadily. The turnover is a reasonable 33%. And the yield is often north of 6%. I should have bought a NASDAQ 100 fund for my taxable back in March while I was shopping.
I have a few other oddballs. It's really hard to beat the performance of indexes after taxes. But I break them down into small, medium, and large. I use BRILX as a surrogate "index" for large caps. It keeps the sectors and holdings relatively balanced.
Lots of fund collectors here. You'll probably get an earful.
Good long term track records are held in sepIRA and TSP like vgstx Vpccx Vanguard wellington Vanguard 2045 and TSP FUNDS (80s/20s)
1 Yr 3 Yrs 5 Yrs 10 Yrs Life
26.36% 21.42% 18.37% 19.91% 15.23%
@WABAC like @rforno, I used to own GLFOX and FSMEX in Roth. One thing I find it hard is if I should change/transition my portfolio from accumulation to income. I'll revisit them.
@rforno Can't get in PRWCX. Sold it when Giroux took over. Should have stayed put. I've been watching VLAIX and find it a reasonable choice. VLAIX managers do adjust equity allocation, now at 55%, more than other allocation funds.
@Mark Mr. Heugh has been a good surprise. I went with MIOPX over VWIGX.
In our taxable account, it's all about being a TAXABLE ACCOUNT. We have a few funds such as PRPFX, SGDLX and FMHTX. Otherwise, it's dividend paying stocks of companies with whom we do business. CMS (2.7%), T(7.0%), VZ (4.2%), DTE (3.5%), etc. One exception is NCV (10.4%). We own that in EVERY account we can. It's all about the yield and NCV is the best I have found and have been owning it for decades. It's a secret though, so don't tell anyone. I want dividends and minimal taxes.
good luck and wear the mask,
rono
We used to have sizable amounts in PRBLX and PARMX, but they were having huge taxable capital gains distributions each year, so we transferred those funds to FZROX, which has a 0% expense ratio and minimal distributions. Aside from money markets and CDs, all of our investment income is from muni bonds.
I've been thinking about harvesting some tax losses in the taxable to cover Roth conversions for the IRA.
The other option is to transfer part of the tax-deferred account to Vanguard and that would eliminate the restriction. I used to do the same with T. Rowe Price funds until T. Rowe Price made their funds available on no-transaction fee platform at Fidelity and Vanguard. Much easier to manage.
https://mutualfundobserver.com/discuss/discussion/56704/wasatch-ultra-growth-fund-wamcx-wgmcx-to-close-to-new-investors#latest
I hold these funds because they've outpaced their benchmarks. I'm younger than you so my risk tolerance may be higher than yours. Best wishes!
Unfortunately, the only way you can find out whether a fund is eligible for automatic investment is to call Fidelity and ask. It's not like checking on NTF status which is something you can find on Fidelity's website.
I should be getting advice from you on simplifying.
I've been thinking about harvesting some tax losses in the taxable to cover Roth conversions for the IRA.
TAIFX fills an important niche in our taxable portfolio. As a balanced fund, it minimizes our need to trade. It’s income sleeve is invested in muni bonds, and stocks are managed to reduce taxable income. It’s long term returns and risk are comparable to Vanguard Wellesley.
1. If you wish to stay with Fidelity, you need to find another substitute global balanced fund.
2. If you are willing to open a brokerage at Vanguard, then you can buy all the Vanguard funds plus other on their NTF platform.
I took the second route when I rollovered my old 401(K) to either Fidelity or Vanguard. At that time I had Vanguard Primecap and Capital Opportunity funds that I want to keep and they were not available at Fidelity.
I consider VGWLX as a conservative value oriented funds. As you noted there are several growth stocks, Microsoft, Cisco System and Taiwan semiconductor on its top ten holdings, that suggested that Wellington is more flexible in their stock picking.
Fidelity will let you transfer in Admiral shares, so if you're not planning to buy any more, you can still keep your portfolio in one place. At least ACAT transfers are free on both the Fidelity and Vanguard sides, so it's not too painful (monetarily speaking) to move holdings around as needed.
An exception is that Vanguard will not let you buy leveraged or inverse ETFs, and will charge you a commission to sell those ETFs you already hold there.
https://investor.vanguard.com/investing/leveraged-inverse-etf-etn
While Fidelity prominently features its own ETFs and those of Blackrock (iShares), it lets you buy and sell all ETFs without commissions.
https://screener.fidelity.com/ftgw/etf/evaluator/gotoBL/research#/home
Given that stock and ETF trades are already free, ISTM the major benefit of free trades at Vanguard is for TF mutual funds. (At Fidelity, you may be charged a transaction fee to buy a fund, but selling is free - subject to a possible short term trading fee for NTF funds.)
Vanguard counts only Vanguard funds (including ETF share class) when adding up the assets you hold there for free trades. Free trades come at the Flagship ($1M) level or above. (T. Rowe Price likewise counts only TRP funds when determining which perks it will give you.)
Fidelity counts all assets you hold there toward its customer levels - Premium ($250K), Private Client ($1M). However, it seems to be quietly phasing these out. A few years ago, it became difficult to find any description of Premium services, and now I can't find a clear Fidelity page on its Private Client services.
Still, at least one perk remains for customers at these levels: ATM fee reimbusements for all brokerage accounts (not just CMA accounts).
https://www.fidelity.com/trading/commissions-margin-rates
Vanguard also has no commissions for trading stocks online. Any client level, any number of orders.
https://investor.vanguard.com/investing/transaction-fees-commissions/stocks
Toward the end of last year, most brokerages eliminated online commissions for all domestic stock and ETF trades.
https://www.cnbc.com/2020/01/02/low-fee-pioneer-vanguard-finally-joins-the-crowd-by-dropping-stock-commissions-to-zero.html