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What do you hold in taxable accounts?

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
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Comments

  • Check out Parnassus and Walden funds if you're into ESG. The expense ratio's are reasonable. TIAA has an ESG bond fund that has been ok for me: TSBRX. It's hard for me to get excited about bond funds.

    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.
  • edited August 2020
    VTMFX (Vanguard Tax Managed Balanced, 50/50) is about 80% of our taxable account. I used to collect funds (so many interesting ones mentioned here) and fiddle around with portfolio adjustments, and then I realized that VTMFX beat me every year and with less taxable income. So, now I keep it simple. (I'm late 50's and about 5 years pre-retirement.)
  • I would transfer VGWLX to Vanguard. I use both Fidelity and Vanguard. Over time they were my 401(k) administrators. There is no equivalent global allocation value oriented funds in Fidelity. The subadvisor, Wellington, to VGWLX is well respected.
  • @WABAC I used to slice and dice (or collect) funds am comfortable dealing with complexity. That said, my spouse has no interest managing portfolio and I'm leaning towards holding a core or two and building around it with a few specialties.

    @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.
  • One holding I have been extremely satisfied with is MGGPX. I'm not sure how tax efficient it is however.
  • edited August 2020
    PRWCX, FSDAX, and soon PRBLX in very large slugs as core positions.
    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.
  • soaring said:

    @WABAC I used to slice and dice (or collect) funds am comfortable dealing with complexity. That said, my spouse has no interest managing portfolio and I'm leaning towards holding a core or two and building around it with a few specialties.

    @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.

    Keep an eye out for FSMEX re-opening, and jump on it. If you've spent anytime around a hospital you'll know they run through a tremendous amount of stuff. Until then check out the other health care fund he runs for Fido.

    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.
  • WABAC, I've always liked BRLIX as a cheap eq-wt proxy for the Dow and have held it off and on over the years. Also held GLFOX at times; I need to revisit that one and see how it's currently positioned.
  • @WABAC - I believe that FSMEX is currently open. I just checked and it is.
  • rforno said:

    Also held GLFOX at times; I need to revisit that one and see how it's currently positioned.

    Waterworks, Electric Company, Shortline, Reading, Pennsylvania, B&O, the usual
  • edited August 2020
    Many indexes Etf and stocks easier to trade in out [bac qqq brk vht vde itot and many private bonds named a few]


    Good long term track records are held in sepIRA and TSP like vgstx Vpccx Vanguard wellington Vanguard 2045 and TSP FUNDS (80s/20s)
  • edited August 2020
    Yes, FSMEX opened again on April 1, 2020

    1 Yr 3 Yrs 5 Yrs 10 Yrs Life

    26.36% 21.42% 18.37% 19.91% 15.23%
  • @Sven Interestingly, VWELX/VGWLX now own lots of stocks in blend category. I wanted VGWLX as my largest holding in the tax deferred space is a growth-oriented target date fund.

    @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.
  • catch22 said:

    Yes, FSMEX opened again on April 1, 2020

    1 Yr 3 Yrs 5 Yrs 10 Yrs Life

    26.36% 21.42% 18.37% 19.91% 15.23%

    Thanks for that. I'll keep an eye on it.
  • Howdy,

    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
  • I’ve tried to keep it simple and tax-efficient in taxable accounts. Our largest holdings in order are TAIFX, FZROX, FLTMX and FTABX. We also keep about a year’s worth of potential income needs in cash, currently mostly money markets. We had a CD ladder when interest rates are higher, but that is winding down, and we’re not reinvesting in CDs at current rates.

    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.
  • @rono, @Tarwheel, thank you for sharing your holdings. The hardest part for me is try not to cover every boxes in taxable accounts and stick with a simple portfolio... @Tarwheel how do you like TAIFX?
  • soaring said:

    @rono, @Tarwheel, thank you for sharing your holdings. The hardest part for me is try not to cover every boxes in taxable accounts and stick with a simple portfolio... @Tarwheel how do you like TAIFX?

    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.
  • @soaring,
    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.
    I just checked with Fidelity, VGWLX is open to new investors, then you should able to buy more through automatic investment ($5/buy) as I have done many times on other transaction fee funds. Have you confirm this with a representative ?

    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.
  • @soaring - PRGTX, PRMTX, WAMCX and AKREX have all been winners for me. FCNTX is a fund my parents have held for decades and are really pleased with it. WAMCX is closing to new accounts on 9/11, here’s a recent MFO thread on its closing:

    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!
  • Not all funds open for purchase at Fidelity are eligible for automatic investment. For any fund, this eligibility is subject to change, just as a fund being offered NTF is subject to change.

    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.
  • @Tarwheel how do you like TAIFX?

    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.

  • Not all funds open for purchase at Fidelity are eligible for automatic investment. For any fund, this eligibility is subject to change, just as a fund being offered NTF is subject to change.
    That is for sure. i understand the fee to be on Fidelity NTF platform is no small feast. I am surprise Vanguard even want to sell their funds there. Nevertheless, Fidelity service via phone or eMessaging is excellent. Vanguard was my 401(k) administrator so they became one of the brokerage we use.
  • Here's the response from Fidelity about automatic investment on VGWLX.
    This fund does not allow for automatic investments. This is a fund by fund basis and it is best practice to call a Fidelity Trader to check if the fund you wish to invest in allows automatic investments at that time. I apologize for any misconception or trading issues this has caused you.
  • Bummer! You have several choices:
    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.
  • Another problem with holding Vanguard funds at Fidelity is that you can't buy Admiral shares (except for index funds, where Vanguard no longer sells Investor shares to retail investors, and where the Admiral shares have a $3K min).

    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.
  • You are correct. It depends on how one want to manage their portfolio across multiple brokerages. Thus I proposed two routes for @soaring. I maintain both brokerages and try to make the most out of them. Fidelity offers free trading on many ETFs, especially iShares ETFs. Vanguard offers a number of free trades depends on your asset being held there under a single address. Trading Vanguard's ETFs are free of course.
  • These days, all ETFs are free at many brokerages, including Vanguard and Fidelity.

    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).

  • There is still commission for trading stocks at Fidelity while Vanguard is free once the total asset reaches the Flagship level. We are not frequent traders so this is a mute point.
    Still, at least one perk remains for customers at these levels: ATM fee reimbusements for all brokerage accounts (not just CMA accounts).
    In recent years debit cards have replaced cash at least for us. Now with COVID I avoid using cash. We started using Apple Pay so to avoid physical contact. ingThe situation may change in oversea travel when situation improves.
  • Fidelity does not charge commissions for trading US stocks online. Any number of orders.
    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


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