Author Topic: Balanced Funds for Portfolio of Taxable and Tax Advantaged  (Read 2835 times)


  • 5 O'Clock Shadow
  • *
  • Posts: 7
Balanced Funds for Portfolio of Taxable and Tax Advantaged
« on: December 17, 2015, 07:53:26 PM »
Hello, I am looking for recommendation on how you would utilize balanced funds to create an optimal strategy that covers taxable and tax advantaged space.  Currently I am at 73% taxable versus 27% tax advantaged.  Overall portfolio is just over 600k.  For the tax advantaged space I can use brokerage arm within 401k plan so I have a lot of options.  I like the funds talked about in this forum, GLRBX, VWINX, EXDAX, and also individual etf options to accomplish a similar risk/reward. Thanks for any input.


  • Handlebar Stache
  • *****
  • Posts: 1463
Re: Balanced Funds for Portfolio of Taxable and Tax Advantaged
« Reply #1 on: December 17, 2015, 08:02:14 PM »
Lets take a step back before looking at these funds into much detail. If you have a combination of taxable and tax deferred you probably should not be using balanced funds to begin with. Balanced funds have stocks and bonds in one fund. If you have IRAs and taxable accounts you are normally better off building a tax efficient portfolio which is normally going to require keeping the stocks and bonds separate from one another.

If you held VWINX in a taxable account it is going to spit out bond income and possibly short term capital gains that are taxable at ordinary income tax rates.  If you instead put a stock index investment in the taxable you could pretty reliably avoid capital gains until you sold the investment, and any qualified dividends would be taxed at the lower LTCG tax rate. Then you could put any bonds in your IRA.

I'm not a huge fan of VWINX, but I don't hate it. The other two... yea I have nothing pleasant to say about expensive actively traded balanced mutual funds.

My recommendation:  research tax efficiency.
Edit to add link:
« Last Edit: December 17, 2015, 08:07:02 PM by Indexer »


  • Handlebar Stache
  • *****
  • Posts: 1409
  • Age: 37
  • Location: Maui
    • Arcadia Power
Re: Balanced Funds for Portfolio of Taxable and Tax Advantaged
« Reply #2 on: December 17, 2015, 08:50:40 PM »
If balanced funds keep one from being tempted to tinker with their portfolio all the time, than the potentially extra taxes may be worth it. If you're in a low tax bracket, then the dividends and STCGs aren't as much of a big deal...if having a balanced fund masks the volatility from you and prevents you from selling makes sense.

I'd say that VBIAX , VSMGX, VWENX, MAPOX, DODBX are all reasonable long term holdings in the balanced categories. As long as you pick a firm that runs the fund by committee, I'm okay with it. No investing with superstar managers, in that case, you'll need to pay more attention to it and see what happens with succession plans and such.