Vanguard wholesale fund

According to their website, the 0.2% fee will be capped at $600.

 

The 0.2% annual fee is $20 for a $10,000 portfolio and you could be purchasing in $500 parcels

 

Correct me if I'm wrong here.. but another thing is the ETF is more tax friendly than the fund version.

Vanguard explained this to me but it was a while back.. Unlike the fund, ETFs don't have to sell down every-time someone wants to sell their shares so, the new buyer doesn't get involved in the capital gains of the sale.

Also you wouldn't buy $2m worth in one hit would you? I'd buy much smaller parcels like maybe $50k at a time across a few months. Whats the rush anyway


-Frank

 

If it's back to $500k I'm sticking with the ETFs. The brokerage of selling $500k of shares is prohibitive let alone all the other considerations. I liked the bpay set and forget of $100 a day or whatever, but with a bit of rigour, one should be able to do this themselves.

Set a calendar reminder every 25 days to buy $5k of VDHG. No matter what, on that day, buy at market. If you do it at 20 days you won't always be buying on Friday or a Monday where there may be some pattern in the market. I'm still not sure what time of day is good to buy but I was advised to stay away from the opening.

 

Just doing my tax for FY20, did anyone notice Vanguard Wholesale's excessive tax inefficiency (particularly with VGS, but to a certain extent with VDHG)? Both in terms of distributions and CG (even when not selling any units)?

Some relevant threads here:
https://forums.whirlpool.net.au/thread/9rp7n2j9
Rant: The wholesale fund for VGS was so tax inefficient this past FY : AusFinance

We have always been in modest tax brackets so would not normally be overly concerned about this, but the spouse is going to be moving into the top tax bracket soon and the tax inefficiency is going to be a real drag on our joint Vanguard wholesale account.

 

Hmmm interesting.

I'm scrolling through on my mobile... So VDHG ETF is more tax friendly than their managed fund version? This is what I'm picking up from that thread..


-Frank

 

I think all of their ETFs will be more tax efficient than unlisted fund version. But the basket ETFs like VDHG may be less so as these have to be rebalanced causing some realised capital gains.

 

Isn't the VDHG ETF comprised of the wholesale funds internally anyway?

 

ETFs you should include the cost of brokerage and of crossing the spread on the screen. There's also some risk the trading price will not quite be at the underlying asset price (it could be a small premium or discount), but that could work either for or against you.