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Vanguard Managed Payout Investor (VPGDX)
Old 09-11-2018, 11:02 AM   #1
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Vanguard Managed Payout Investor (VPGDX)

Interesting funds, wonder is anybody has any input on them?


Vanguard Managed Payout Investor (VPGDX)

And see in it Vanguard Alternative Strategies Investor (VASFX)
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Old 09-11-2018, 01:46 PM   #2
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Interesting funds, wonder is anybody has any input on them?


Vanguard Managed Payout Investor (VPGDX)

And see in it Vanguard Alternative Strategies Investor (VASFX)
The general advice at bogleheads.org is to avoid it.
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Old 09-11-2018, 03:39 PM   #3
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Interesting funds, wonder is anybody has any input on them?


Vanguard Managed Payout Investor (VPGDX)

And see in it Vanguard Alternative Strategies Investor (VASFX)

I've owned it in my Roth IRA for years. Its a good fund.

I also owned it in taxable for a while, but decided to switch it out for individual funds. So I can tax loss harvest and so I can get the foreign tax credit.

I think its fine balanced fund option, but you lose a lot of tax efficiency not going with individual funds in taxable. I plan to keep it in my Roth IRA.
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Old 09-11-2018, 06:10 PM   #4
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can you share how VPGDX pays out dividends and CC?
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Old 09-12-2018, 08:37 AM   #5
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can you share how VPGDX pays out dividends and CC?

Sure. VPGDX pays out monthly distributions. You will not know exactly until the end of the year how much of that was return of capital, capital gains, interest, or qualified dividends. So, its impossible to know for sure until you get the tax forms at the end of the year.

Historically they have managed the fund very tax efficiently and a lot of the distribution (like 50%) will be return of capital (ROC). ROC is tax free up to a point. When you get ROC it lowers your cost basis in the investment. Once your cost basis hits zero then the ROC is taxed as long term capital gains (15%).

So, it is a very tax efficient fund.

Also, the distribution amount is determined as taking the last three years value for the fund and averaging it, then taking 4% of that and distributing it monthly during the year.

So, the distribution will change every year slowly (up or down) but the monthly payout will be consistent every month for any given year. There is also an extra payout at the end of the year. Not sure how that is calculated but it is whatever extra money they need to pay out to maintain compliance as a mutual fund.

I think it is a nice fund. My Roth IRA has been 100% VPGDX for many years. If you like the idea of putting some money into unproven stuff like alternative assets instead of sticking purely to stocks and bonds, its a great choice. If you don't want to take a gamble on the "cutting edge" type stuff then maybe something like Wellessley Income would be better.

I suggest look at the assets in VPGDX and only buy it if you are ok with owning the components.
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Old 09-12-2018, 01:49 PM   #6
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If you like the idea of putting some money into unproven stuff like alternative assets instead of sticking purely to stocks and bonds, its a great choice.
Thanks for a detail answer!

That ^ what actually got my attention about this fund. I also was surprised to see $2B invested into it.
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Old 09-12-2018, 04:39 PM   #7
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... If you like the idea of putting some money into unproven stuff like alternative assets instead of sticking purely to stocks and bonds, its a great choice. If you don't want to take a gamble on the "cutting edge" type stuff then maybe something like Wellessley Income would be better. ...
I never heard of this thing so I pulled up the Morningstar public report. They hold VG "Alternative Strategies" fund (VASFX) but that one doesn't appear to hold alternative assets. (https://investor.vanguard.com/mutual...ortfolio/vasfx) Yes, real estate but even though people call it "alternative" I just see it as another asset class. Certainly RE is not "cutting edge." Maybe VPGDX has some other holdings outside their top five that are more exciting?
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Old 09-12-2018, 05:50 PM   #8
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I never heard of this thing so I pulled up the Morningstar public report. They hold VG "Alternative Strategies" fund (VASFX) but that one doesn't appear to hold alternative assets. (https://investor.vanguard.com/mutual...ortfolio/vasfx) Yes, real estate but even though people call it "alternative" I just see it as another asset class. Certainly RE is not "cutting edge." Maybe VPGDX has some other holdings outside their top five that are more exciting?

VPGDX owns funds that do market neutral, merger arbitrage, currency arbitrage, options stuff, commodities, and also factor tilting (value, low volatility, emerging markets).

https://investor.vanguard.com/mutual...ortfolio/vpgdx

https://investor.vanguard.com/mutual...overview/vasfx

https://investor.vanguard.com/mutual...overview/vmnfx
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Old 09-14-2018, 07:57 AM   #9
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Interesting. 1.54% fee and an anti-passive strategy. I wonder if they have told Jack about this one.
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Old 09-14-2018, 11:34 AM   #10
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Interesting. 1.54% fee and an anti-passive strategy. I wonder if they have told Jack about this one.
Well, most of that is for the cost of leverage. They have a little note at the bottom.


"*Excluding borrowing and dividend expenses on securities sold short, the Total Annual Fund Operating Expenses are 0.25%."
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Old 09-14-2018, 11:50 AM   #11
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Well, most of that is for the cost of leverage. ... "
Still, cost is cost. The fund seems to be very un-Vanguard like, not that they have asked my opinion.
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Old 09-14-2018, 03:10 PM   #12
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Interesting funds, wonder is anybody has any input on them?


Vanguard Managed Payout Investor (VPGDX)

And see in it Vanguard Alternative Strategies Investor (VASFX)
I looked @ this fund a few years ago but it had a verrry high ER so I decided that TSM would do just fine and save me a bunch of $. Also I wondered if my Boglehead credentials would be cancelled if I selected such a fund.
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