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Lessons From Vanguard Target-Date’s Capital Gains Surprise

Target-date funds are best kept where most of them are: in a tax-deferred account.

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Vanguard’s target-date series is making headlines this week because of an unusually high capital gains distribution that has riled investors in taxable accounts and drawn scrutiny from regulators. It has sparked debate over whether target-date funds are suitable for taxable accounts.

Jason Kephart does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.