That would make sense if Tax-Managed Balanced (TMB) was composed of the two funds you mentioned (The LifeStrategy and Target Date funds are like this; a fund that holds four underlying funds). However, TMB is made up of 854 individual stocks and 2,925 individual bonds (see portfolio composition). It is actively managed to try and avoid capital gains distributions. That's not always possible, but they managed it in the last 7 quarters it seems as it says all of those distributions are dividends (see portfolio distributions). The active stock selection may also try to hold only companies that do not issue dividends, but I don't know if that's the case or not.Out of curiosity, could the 2.23% current yield on Tax-managed balanced be computed by taking 51.08% of the yield on Vanguard Intermediate-Term Tax-Exempt Fund Admiral Shares (VWIUX) and adding it to 49.82% of the yield on Vanguard Tax-Managed Capital Appreciation Fund Admiral Shares (VTCLX)? (0.5108*3.29)+(0.4982*1.09)= 2.224%
I'm pretty sure the 2.23% yield on the Van site is for both stock dividends (if any) and the bond interest.
The popup note for the 30-day SEC yield says:
- A security's income, for the purposes of this calculation, is based on the current market yield to maturity (for bonds) or projected dividend yield (for stocks) of the fund's holdings over a trailing 30-day period.
Note B means:
- BASED ON HOLDINGS' YIELD TO MATURITY/DIVIDEND FOR LAST 30 DAYS OF PRIOR MONTH
...to me, the yield-to-maturity seems to be bonds and dividend seems to be stocks (if any).
In any event, even with your estimation with the two other funds, 2.224% vs 2.23% isn't likely to make a difference in choosing to use TMB or not; that seems to be largely driven by your Fed tax bracket being 35% or 37% (use TMB) or a lower rate (don't use TMB).
Statistics: Posted by bonesly — Fri Mar 29, 2024 1:07 am — Replies 6 — Views 364