Vanguard and Morningstar

[smooch]

I’m looking at the Vanguard site and the Morningstar site to determine what the return is on some of our funds. We own Calamos Growth & Income (CVTCX). Vanguard says the 3 year return is 6.54%. Morningstar says it is 8.1%. Can someone explain the difference to me?

Also, Vanguard lists a return and a return after taxes. What taxes would that be?

Thanks!

 

[cute fuzzy bunny]

probably depends on when the 3 years starts and stops...end of the calendar year, end of the quarter, end of the month, up to today? One is doing it one way, the other is doing it differently.

Sales minus capital gains taxes, I forget what rate vanguard uses by default. Just an example if you're comparing two funds of which one was more tax efficient.

 

[wildcat]

I don't know this for sure but when I look at my returns on my Vanguard account they are real returns, i.e. geometric mean return which accounts for volatility/dispersion of returns over the time period. Most shops do the easy way of average returns which is just total return/# of time periods. Avg returns are not real returns.

 

[TromboneAl]

Vanguard lists a return and a return after taxes. What taxes would that be?

As I recall, they use the highest federal tax rate.

 

[BigMoneyJim]

That's funny. I've always suspected Vanguard is high. I've had the impression new contributions artificially push the return upwards in my account performance view. It's been a long time since I've dusted off the calcultor to double-check them, though. I'm on accumulate-and-ignore mode for now aside from rebalancing every few months and an occasional peek to see if I've passed another $5k milestone.

Babbling and wandering offtopic, my IRA has had no contributions for 5 years and I happened to roll into it at the top of the bubble, so as well as my whole nestegg is growing I still notice that the IRA isn't back up to where it was 5 years ago.

 

[smooch]

I think it may be that Vanguard is adjusting for a sales load? The reason that this seems probable is that, when you go out to 10 years, both Vanguard and Morningstar have about the same return. We didn't pay a sales load, so I guess we can go with the Morningstar quote.

Al, I understand the tax thing now. Very helpful - thanks!