Author Topic: A more tax efficient fund than Vanguard Health Care Fund (VGHCX)  (Read 1118 times)

Simple1_2_3

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We have VGHCX in a taxable account and the annual capital gain distribution is killing us when tax time comes around. 

We like this fund, but would prefer to hold a more tax efficient medical mutual fund as we have no plan to sell it in the near furture.  Any suggestions for an alternative would be grately appreicated. 

Radagast

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Re: A more tax efficient fund than Vanguard Health Care Fund (VGHCX)
« Reply #1 on: April 18, 2018, 12:49:58 PM »
VHT/VHCIX? (Those are funds, not advice.)

Simple1_2_3

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Re: A more tax efficient fund than Vanguard Health Care Fund (VGHCX)
« Reply #2 on: April 18, 2018, 02:45:06 PM »
Thank you.  We will look into VHCIX. 

Bill_

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Re: A more tax efficient fund than Vanguard Health Care Fund (VGHCX)
« Reply #3 on: April 18, 2018, 05:19:45 PM »
Go to Bogleheads and they will tell you to donate your shares and invest in something that does not perform as well.

Since I assume you like making money then just pay the tax, just do a better job of saving a portion of the payments you receive so you can pay your tax.

MustacheAndaHalf

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Re: A more tax efficient fund than Vanguard Health Care Fund (VGHCX)
« Reply #4 on: April 19, 2018, 06:54:20 AM »
If you're worried about taxes, selling might incur even more taxes.  If your $10,000 investment went up to $14,000 and you sell, then then owe $4,000 in capital gains.  Hopefully you held more than 366 days and can use the lower long-term capital gains rate (15% for most people).  But that still leaves you paying maybe $600 of taxes on $4k of gains if you sell.  At Vanguard, go to the "cost basis" area of your account and you can see how much unrealized gains will be realized when you sell.

Simple1_2_3

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Re: A more tax efficient fund than Vanguard Health Care Fund (VGHCX)
« Reply #5 on: April 19, 2018, 11:37:38 AM »
Thank you for your very constructive and helpful input.  We know we are having a first world problem!