I'm in a bit of a quandry.
I'm an Australian investor. Most of my net worth has been held in a Vanguard High Growth Index fund. It's in a managed fund vehicle, rather than an ETF, so I use Vanguard's platform and BPay the funds in.
Unfortunately this is looking less and less optimal as time passes...
1. I can't control the asset allocation as much as I want to now. Now I want to increase my exposure to Small Cap + Value, but that would require rebalancing the other investments, which I can't do, since they're all held in the one Vanguard fund
2. The Managed / Pooled Fund vehicle is less tax efficient whenever there's a lot of selling in the fund, due to capital gains being realised when the fund sells rather than when I sell units. (See:
The problem with pooled funds)
3. Vanguard has apparently suddenly started charging a new 0.2% "account fee" on top of its regular fees, so that means my fees have effectively doubled!
So I now really want to get the money out of the Vanguard managed fund and into a set of ETFs which I have more control over and pay lower fees to maintain.
The problem is, if I sell down all my holdings in order to convert them to ETFs, I could be in for a whopping CGT event. It doesn't help that I'm also in the highest tax bracket right now, due to working two jobs.
I guess the best way to decide is probably just to calculate as accurately as possible the total CGT I'd have to pay if I sold, and then calculate the cost of not selling (fees, potential opportunity cost of not being able to rebalance) and try to see which option is cheaper in the long-run.
Wondering if anyone has any thoughts about the pros/cons of holding vs. selling?
What would you recommend in this situation?
Thanks for reading!