Reply to Vanguard Target Date funds (in taxable accounts) --- WHAT IS GOING ON?

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Reply to "Vanguard Target Date funds (in taxable accounts) --- WHAT IS GOING ON?"

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[quote=Anonymous][quote=Anonymous]I love how everyone complains about capital gains. Would you rather they lose money? And I bet the majority of the posters here think capital gain tax rates to increase. [/quote]

It's not like the "capital gains" means that the funds made money.  Vanguard SOLD a huge portion of its assets, triggering a huge capital gain, then re-invested the cash in the slimmed-down portfolio.  The only reason Vanguard did that is because it lured a majority of the investors out of the Target Date funds and into the "Institutional Target Date Funds."

We're not talking about a small adjustment of investors moving from one to the other.  Vanguard dropped the entry ticket for the institutional funds from $100million to $5million!  That means the regular target date fund USED TO serve investors with $100million or less.  NOW, the regular target date fund ONLY serves investors with $5million or less!

When all those investors left, Vanguard needed to sell off assets --- and the little guys with $5million or less got stuck with an astronomical tax bill.  [/quote]

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