Join Early Retirement Today
Thread Tools Search this Thread Display Modes
Need help in understanding qualified dividends
Old 01-11-2013, 10:16 AM   #1
gone traveling
Join Date: Jan 2013
Location: Boston
Posts: 3
Need help in understanding qualified dividends

This is my first post and am looking forward to hearing back.

I am thinking of investing in a taxable account an international mutual fund and want to make sure I am making the right choices. I was thinking of VTIAX (Vanguard Total International Stock index) since it has large, mid,small cap and emerging markets in one fund. The only concern I have is that only 70% of dividends are qualified.

Since this is for a taxable account, should I be looking at funds that have 90-100% qualified dividends? I want to have foreign exposure to large, mid, small and emerging markets, but am not sure if I have to look at multiple funds to do this as long as the qualified dividends are at the higher range.

Would appreciate any help in trying to gain a better understanding and if anyone has any fund choices that might be appropriate.

Thank you.

Mikec is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 01-11-2013, 10:51 AM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 35,375
You want to have your international equity holdings in your taxable accounts since you can then get the benefit of the foreign income tax credit and you would lose the beneift of the credit if your international investments were in your tax-deferred or tax-free accounts. I also own VTIAX and have been pleased with it.

Also see Step 3.
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is online now   Reply With Quote
Old 01-11-2013, 01:34 PM   #3
gone traveling
Join Date: Jan 2013
Location: Boston
Posts: 3
Thanks PB for the response. This made it easier regarding my decision.
Mikec is offline   Reply With Quote
Old 01-12-2013, 06:42 AM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Jun 2005
Posts: 10,252
There is some debate on bogleheads whether the foreign tax credit is worth it or offsets the 30% non-qualified dividends of Vanguard Total International Index fund. ETF ticker: VXUS

Another Vanguard fund, name Vanguard Tax-Managed Int'l fund pays 100% qualified dividends, but it follows the EAFE index and thus does not have any small-caps, emerging markets, nor Canadian stocks. ETF ticker: VEA.

And yet another way to do this is to own the Vanguard FTSE all-world ex-US funds: VEU and VSS.

If one was really into tax-management, one could synthesize VXUS with other funds (VEU + VSS or VEA + VSS + EWC + VWO) and place the most tax-efficient in taxable and those less-tax efficient in tax-advantaged. This might be worth it for folks taxed at 40+% on dividends such as high-income folks in California.
LOL! is offline   Reply With Quote

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

» Quick Links

All times are GMT -6. The time now is 08:29 AM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2023, vBulletin Solutions, Inc.