Author Topic: VIMAX vs VTSAX vs VEXAX - dividends and cap gains  (Read 5433 times)

FerrumB5

  • Pencil Stache
  • ****
  • Posts: 521
  • Location: Illinois
VIMAX vs VTSAX vs VEXAX - dividends and cap gains
« on: November 20, 2015, 07:03:49 AM »
Hi Folks,

I just opened a *taxable* account with Vanguard and put all my free cash in VIMAX (exp ratio 0.09%). However, I'm wondering if this fund pays a lot more dividends than infamous (here) VTSAX (exp ratio 0.05%) or VEXAX (0.10%)? So that performance is not drawn back by big taxes on dividends/cap gains etc.
Thanks!

In tax-deferred I have the following:
FXSIX (Spartan 500 with Fidelity) (old 403b)
VFIAX and VEXAX in TIAA-CREF (old 403b)
VIMAX and PABGX (0.95% exp ratio.. might drop it, but it performs well) in new 401k

Any suggestions?

DaveR

  • Stubble
  • **
  • Posts: 243
Re: VIMAX vs VTSAX vs VEXAX - dividends and cap gains
« Reply #1 on: November 20, 2015, 10:04:03 AM »
You can see distributions for various funds on vanguard.com.

VIMAX: https://personal.vanguard.com/us/funds/snapshot?FundId=5859&FundIntExt=INT#tab=4
VTSAX: https://personal.vanguard.com/us/funds/snapshot?FundId=0585&FundIntExt=INT#tab=4

At the moment, VTSAX is paying out more in dividends (1.94%) than VIMAX (1.37%) so you'll pay more taxes on VTSAX. Over time, you would expect the realized capital gains in VIMAX to have some tax consequences, but you'll see less dividends along the way.

FerrumB5

  • Pencil Stache
  • ****
  • Posts: 521
  • Location: Illinois
Re: VIMAX vs VTSAX vs VEXAX - dividends and cap gains
« Reply #2 on: November 20, 2015, 10:22:38 AM »
Thanks, DaveR.
I didn't account for this info when picking VIMAX. So, it is more practical to go with ... which one? Given higher div in VTSAX and lower expense ratio, but typically VIMAX performs better...
Or just let it boil in whatever I chose first and let the investment be "boring" and not bother?

AZryan

  • Stubble
  • **
  • Posts: 153
Re: VIMAX vs VTSAX vs VEXAX - dividends and cap gains
« Reply #3 on: November 25, 2015, 04:09:04 PM »
Five days later, so hope this helps...

I pretty much never see anyone talking about MidCap Indexes as even a part of their allocations, but personally I'm BIG fan, and VIMAX is my core fund. It correlates very closely with the total market and is actually mostly a Large Cap fund of companies/brands everyone recognizes (Large Cap funds are really Mega and LargeCap).

As you've seen, VIMAX consistently does better vs. Total or 500 Index over nearly any timeframe with fees almost as low as those two. So, if the 500 Index is a reasonable exchange for the Total Market (which a ton of people here agree with), I think VIMAX with ~350 companies can be, too.

But if you split between the MidCap and 500 Index, you'd have ~850 companies (I think there's no company overlap) that are mostly all Large Caps, but less emphasis on Megas and more on Mids than the Total Market alone.

Back-tested over decades, it's done much better than the Total Market during accumulation, and FAR, FAR better during draw-down. Plus it let's you rebalance without the need for bonds.

I don't find there's much of a diff in taxes, but I also flip VIMAX back and forth from Vanguard's MidCap Growth and Value Funds (the two halves of VIMAX). I also flip between the 500 Index and Total Market.

Similar-ish annual results with either combo, but by doing that I keep resetting my Cost Basis so there'll be almost nothing to tax when I retire.

tj

  • Handlebar Stache
  • *****
  • Posts: 1251
  • Age: 34
  • Location: Maui
    • Arcadia Power
Re: VIMAX vs VTSAX vs VEXAX - dividends and cap gains
« Reply #4 on: November 25, 2015, 07:56:48 PM »
You can see distributions for various funds on vanguard.com.

VIMAX: https://personal.vanguard.com/us/funds/snapshot?FundId=5859&FundIntExt=INT#tab=4
VTSAX: https://personal.vanguard.com/us/funds/snapshot?FundId=0585&FundIntExt=INT#tab=4

At the moment, VTSAX is paying out more in dividends (1.94%) than VIMAX (1.37%) so you'll pay more taxes on VTSAX. Over time, you would expect the realized capital gains in VIMAX to have some tax consequences, but you'll see less dividends along the way.

Not necessarily, VTSAX could have a higher proportion of qualified dividends which are taxed at 0% or 15%.

FerrumB5

  • Pencil Stache
  • ****
  • Posts: 521
  • Location: Illinois
Re: VIMAX vs VTSAX vs VEXAX - dividends and cap gains
« Reply #5 on: November 25, 2015, 08:11:28 PM »
What is a more appropriate portfolio in this case? Put everything in e.g. VIMAX or VTSAX, or split between 3-4 evenly? Say, VIMAX/VTSAX/VSMAX/VEXAX?
I just started this Vanguard index stuff, so it's all not "boring" to me just yet

tj

  • Handlebar Stache
  • *****
  • Posts: 1251
  • Age: 34
  • Location: Maui
    • Arcadia Power
Re: VIMAX vs VTSAX vs VEXAX - dividends and cap gains
« Reply #6 on: November 25, 2015, 08:28:32 PM »
What is a more appropriate portfolio in this case? Put everything in e.g. VIMAX or VTSAX, or split between 3-4 evenly? Say, VIMAX/VTSAX/VSMAX/VEXAX?
I just started this Vanguard index stuff, so it's all not "boring" to me just yet

How much $$ are we talking about? It probably won't make much of a difference. See attached graph. Your stock/bond split is your most important decision. The fund selection, while important, is much less so, especially if you are just starting out.


FerrumB5

  • Pencil Stache
  • ****
  • Posts: 521
  • Location: Illinois
Re: VIMAX vs VTSAX vs VEXAX - dividends and cap gains
« Reply #7 on: November 25, 2015, 08:30:19 PM »
30k for now, all in stocks ( vimax). Adding 100 every month, probably more in 2 years when DW starts working

tj

  • Handlebar Stache
  • *****
  • Posts: 1251
  • Age: 34
  • Location: Maui
    • Arcadia Power
Re: VIMAX vs VTSAX vs VEXAX - dividends and cap gains
« Reply #8 on: November 25, 2015, 08:41:03 PM »
30k for now, all in stocks ( vimax). Adding 100 every month, probably more in 2 years when DW starts working

I like Vanguard Total World as a one fund, but there is nothing wrong with sticking to domestic or domestic mid caps as you have chosen. Vanguard Mid Cap Index has a P/E of 26.4 which is quite  bit higher than the P/E of Total  US Market is at 21.9 and Vanguard Total World is at 19.6.  Someone else can suggest if P/E is an irrelevant factor or not.

I would not select Mid Caps based on previous outperformance or a relatively minor difference in tax efficiency, but if you have reasons for not wanting to be exposed to conglomerates or have some other reason for avoiding mega caps, I don't tihnk it is unreasonable.


You also might want to consider Vanguard Extended Market Index which is also a Mid Cap Blend fund, but has quite a bit more securities with a few large caps, and several small caps.

FerrumB5

  • Pencil Stache
  • ****
  • Posts: 521
  • Location: Illinois
Re: VIMAX vs VTSAX vs VEXAX - dividends and cap gains
« Reply #9 on: November 25, 2015, 08:47:42 PM »
What is P/E?
I picked VIMAX mostly because 10 yr performance was better than VTSAX. I don' t have any reasonings besides that. Looking into VTSAX, VSMAX, VEXAX as well. Main goal - to have a headache free portfolio that follows strategy "shoot and forget", i.e. set it up once and let it be for another X years.
So, I am very open to good suggestions in terms of 100% VIMAX vs X/Y/Z% of other funds. After all, we are doing the very same thing here - looking for FI

tj

  • Handlebar Stache
  • *****
  • Posts: 1251
  • Age: 34
  • Location: Maui
    • Arcadia Power
Re: VIMAX vs VTSAX vs VEXAX - dividends and cap gains
« Reply #10 on: November 25, 2015, 10:12:41 PM »
What is P/E?
I picked VIMAX mostly because 10 yr performance was better than VTSAX. I don' t have any reasonings besides that. Looking into VTSAX, VSMAX, VEXAX as well. Main goal - to have a headache free portfolio that follows strategy "shoot and forget", i.e. set it up once and let it be for another X years.
So, I am very open to good suggestions in terms of 100% VIMAX vs X/Y/Z% of other funds. After all, we are doing the very same thing here - looking for FI


I'd be careful not to choose security based on what has out-performed in the past. Your investing horizon is much longer than 10 years. VIMAX has out-performed for the past ten years, but that doesn't mean that it will outperform in the future. I wouldn't bother slicing and dicing, pick a fund, VTWSX, VTSAX or VIMAX - just pick one that mkaes sense for you. The fact that mid cap domestic equities has out performed over the past ten years makes me feel they might be over valued especially vs foreign securities, but there are no crystal balls here. Also consider Vanugard LifeStrategy Growth fund diversified between foreign and domestic stocks with a sliver of foreign and domestic bonds.

P/E is your price to earning ratio.

http://www.investopedia.com/university/peratio/

Quote
Theoretically, a stock's P/E tells us how much investors are willing to pay per dollar of earnings. For this reason it's also called the "multiple" of a stock. In other words, a P/E ratio of 20 suggests that investors in the stock are willing to pay $20 for every $1 of earnings that the company generates. However, this is a far too simplistic way of viewing the P/E because it fails to take into account the company's growth prospects.
« Last Edit: November 25, 2015, 10:14:33 PM by tj »