Resurrected again? 2015, 2017, 2018, and now 2019. Any predictions on whether it comes back in 2020?
Vanguard does 2 very important things to avoid this.
Vanguard total stock distributed a capital gain last year, did anyone notice?
1. Probably not, because it distributed the capital gain to the institutional share class. Investors normally only hold this share class in 401k plans, where no one cares about capital gains distributions. That way the Admiral share class has less embedded gains to worry about in the future.
2. Creating ETF units. I went into detail on this on page 2 of this thread... in 2015. When Vanguard creates new ETF units they purposely push holdings with embedded gains into the ETF. The gains are then trapped there unless someone broke the ETF apart, which is next to impossible for an individual investor. That way the Admiral share class has less embedded gains to worry about in the future.
Vanguard index funds can distribute gains into the other share classes, which includes ETF units, so the admiral share class is highly unlikely to have a capital gains distribution.
I'm not worried about VTSAX distributing a gain, but if you were REALLY worried, just buy the ETF instead.