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Author: Lokicious Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 125003  
Subject: Re: Regular Mutal Funds vs. Tax-Managed Mutal Fu Date: 3/8/2001 9:42 AM
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"I currently own several mutal funds from Vanguard. I make a fair amount yearly in dividends, cap gains, etc. However, I'm wondering if I should look into tax-managed mutal funds. I am in a higher tax bracket and wonder if those would be a better choice but I'm not really sure how I go about figuring that out. Any suggestions or formulas or anything?"

Happily you are with Vanguard, which is very open about tax consequences of different funds. They have an after-tax comparison tool on their web site, but it is down at the moment for updating for 2001. You can check different funds yourself by looking under "distributions" (lists dividends and capital gains).

If you are already in Vanguard index funds, the advantages of one of their tax managed funds may not be that much, since their index funds have relatively low turnover rates.

The other thing you have to remember is if you move money from one fund to another and you have a gain since you bought the fund, you have to pay capital gains taxes now. So changing funds is rarely worth it. What you probably should be looking at is whether you want to put new money into a tax managed fund.
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