Comments on: Vanguard ETFs have Different Tax Considerations Than Other ETFs

By: » Tax efficiency of Vanguard ETFs Canadian Business Blogs | Advice on Investment in Canada, Stock Market, Small Businesses Opportunities

Mon, 12 Apr 2010 21:15:56 +0000

[...] actually a special share class of Vanguard’s Index Mutual Funds, as Preet Banerjee notes on his wheredoesallmymoneygo.com [...]

By: D

Sat, 26 Sep 2009 19:51:38 +0000

Keep in mind though that being an index fund, they really can’t harvest losses or their tracking error will widen; i.e. if they move sideways from investment A to B to lock in the loss, they are out of line with the index for the time they are out of investment A (31 days min.). Therefore, you get the potential distribution problem, but doubtfully would get the tax loss sekking advantage. all-in-all though, it probably won’t amount to a big deal as they have such large inflows of capital they can probably fund most redemptions with a cash component. Larger players are probably in a true ETF.

By: This and That: Bears turning into Bulls and more… | Canadian Capitalist

Fri, 25 Sep 2009 03:01:04 +0000

[...] ETFs are set up as a special share class of its mutual funds. Preet Banerjee posted a response on why the Vanguard structure has cost, tax and tracking efficiency. Larry MacDonald also noted Vanguard’s response that the adverse tax consequence of the VIPER [...]

By: Even More Clarity on Vanguard ETF Taxation : WhereDoesAllMyMoneyGo.com

Even More Clarity on Vanguard ETF Taxation : WhereDoesAllMyMoneyGo.com — Wed, 23 Sep 2009 02:13:49 +0000

[...] the subject matter. For those who have missed it, you may want to read these related posts first: Vanguard ETFs have Different Tax Considerations that other ETFs, and Tax Efficiency of Vanguard ETFs [...]

By: Tax Efficiency of Vanguard ETFs Follow Up : WhereDoesAllMyMoneyGo.com

Tax Efficiency of Vanguard ETFs Follow Up : WhereDoesAllMyMoneyGo.com — Tue, 22 Sep 2009 02:09:33 +0000

[...] week I had mentioned that Vanguard ETFs had slightly different tax considerations than most other ETFs due to their unique structure (they are actually a separate share class of Vanguard index mutual [...]

By: brian

brian — Thu, 17 Sep 2009 13:58:30 +0000

I’ve always had trouble understanding tax efficiency of different investments. This post might be a little over my head.
Anyone know of some useful links/resources that would help me understand?

By: Preet

Preet — Wed, 16 Sep 2009 14:41:23 +0000

@Henry – yes, just look up the fund in question on Vanguard’s site and select the distributions tab. VWO carries an unrealized gain of $2.38/unit, which is 10.74% of the NAV, for a total of over $2 billion.

By: Henry

Henry — Wed, 16 Sep 2009 13:09:33 +0000

Is there anyway to find out the amount of capital gain or loss that is within a Vanguard ETF? I would imagine that 2008 resulted in some capital losses.

I hold VWO so I am particularly interested in this issue.

By: Jordan

Jordan — Wed, 16 Sep 2009 05:44:19 +0000

It might also be good to point out that some of Vanguard’s funds are huge. Take the Total Stock Market Index, it is one of the largest funds in the world with 100 billion in net assets.

With such a large fund I imagine it would require more then a few institutional investors to liquidate all their holdings to see a noticeable impact. (I thought I once saw a list of top unit holders in the prospectus but can’t find it right now.)

By: Michael James

Michael James — Wed, 16 Sep 2009 03:34:15 +0000

As always, you’re right on top of fine distinctions that matter. I had no idea that Vanguard’s ETFs had this different structure.