Managed Funds Vanguard

As per @Il Falco I have a bond fund rather than a single bond issue, this gives less interest rate risk as it holds a collection of several bond issues maturing at different times, thus as old ones mature, new ones are added

 

VAF anyone?

 

The Aussie equivalent being VAS / VGB / VGB then?

 

You must really like bonds by the look of that allocation.

Mawhawhawhahaha

 

Ah. Not an even split.

 

I think you meant:
VAS / VGS / VGB
Not
VAS / VGB / VGB

 

I did. I don't even drink home brew. Thank you for the kind correction

 

I knew what you meant. Yes. But the wholesale funds not ETFs. (Behavourial mostly).

 

Was just comparing one year income distribution from VGS vs Vanguard Wholesale International Fund.

Note the difference in the income distributions:

VGS - 3.38%
Vanguard Wholesale - 6.94% (CGT bill for some me thinketh)

https://api.vanguard.com/rs/gre/gls/stable/documents/8261/au (VGS)

https://api.vanguard.com/rs/gre/gls/stable/documents/7707/au (W'sale)

 

I'd bee keen to see the distribution statements for each for same dates.

 

I've got mine for VGS but no idea what the unlisted fund distribution breakup is.

Fortunately our holding of VGS is in the no / low tax Super environment so CGT is not really an issue.

Mawhawhawhahahaha

 

Will all change with the attribution scheme, I'll follow up when I get time

 

That would be great. I read about it but I didn't understand the implications - it would be lovely to read from someone who can interpret (likely/possible) outcomes of the change.

 

I've emailed them for comment....it will be interesting to see how they report distributions (in their marketing/fact sheets) going forward as each investors will look different depending on their grouping.

 

Even the 5 year distributions for unlisted international are showing 4.6%. Double the underlying equity yield.

That seems like a fair bit of rebalancing/redemptions?

How does that work?

 

With Vanguard opting into AMIT this should in theory reduce the component of capital gains distribution to those unit holders who don't sell as discussed here:

Vanguard

Future income distribution over the real yield should mostly be due purely to rebalancing and not due in part to others making redemptions.

 

VGS 12 month distribtion is like 3.4%, and i'd think VGS (as opposed to VTS) would typically yield around 3%... However I have asked the question of Vanguard.

When we look at VAS vs the Wholesale Managed fund over last 5 years, we see same TSR (10.7%), but distributions 10% higher (with corresponding lower franking level) in the Wholesale fund. This has to relate to redemptions.....

AMIT *should* largely solve this....closing the tax efficiency gap substantially. I'll be watching next couple of years closely. If it works as I hope, I wont bother with a brokerage account anymore.

 

When in doubt go to the index provider being MSCI. Here's the MSCI factsheet showing current yield at 2.36%. Also note 12 month turnover at 2.42%:

https://www.msci.com/documents/10199/c27eeea3-ad05-4944-bef4-fbaef9ef34ec

 

We can't invest in the index. Only index trackers..VGS distribution info from Vanguard.

 

From what I understand Vanguard try to replicate the index by physically holding the assets. So when it comes to the dividends / distributions from the underlying stocks in the portfolio the Vanguard fund itself should have a "real" yield similar to the index. Anything over that is likely to be capital gains related. At least that is what I thought @Snowball was asking about and hence I was trying to address.

Finally when dealing with highly liquid large / mid cap stocks the index fund should track the index itself very closely. Otherwise they're not doing their job very well I would have thought?