Vanguard Target Funds - Large Cap Gains Distribution?

[ERD50]

This is an unusual event I would not move funds over it.

It may be unusual but it shows disregard for the small investors. Who's to say they don't do this with another family? ....

Yes, it demonstrates incompetence. This never should have happened. What other mistakes might they make in the future?

I will no longer recc VG funds to anyone. Our money is too important to "forgive and forget" something like this that could and should have been anticipated and easily avoided.

-ERD50

 

[USGrant1962]

The Massachusetts Securities Division has opened investigations into this. Not just VG, but Fido, T Rowe, Blackrock and American Funds too.

https://www.thinkadvisor.com/2022/0...der-scrutiny-over-target-date-fund-tax-bills/

 

[ejman]

Could something like this happen with Vanguard's index funds like VFIAX Index 500, VHYAX High Dividend Yield Index Fund Admiral and VSIAX Small Cap Value Index Fund Admiral Shares? I hold these in my taxable account precisely because they don't generate Cap Gains and I have sizable Unrealized Cap gains in all of them. I also have smaller amounts of Wellington and Wellesley that do distribute significant Cap Gains each year but those I expect and plan accordingly.

 

[MichaelB]

Could something like this happen with Vanguard's index funds like VFIAX Index 500, VHYAX High Dividend Yield Index Fund Admiral and VSIAX Small Cap Value Index Fund Admiral Shares? I hold these in my taxable account precisely because they don't generate Cap Gains and I have sizable Unrealized Cap gains in all of them. I also have smaller amounts of Wellington and Wellesley that do distribute significant Cap Gains each year but those I expect and plan accordingly.

VFIAX, VSIAX, VHYAX won’t have distributable capital gains because they are index funds with ETF equivalents, so you’re safe.

I sympathize with all the people affected by this. Our portfolio is around 98% taxable accounts, and we’ve had lots of large taxable distributions over the years.

Investors needs to always understand and be aware of the potential tax consequences of their taxable holdings.