Skip to Content
Fund Times

Vanguard Repeals Tax-Managed Funds' Redemption Fees

Plus, Fairholme's new fund bets big on MBIA, and more.

Mentioned: , , , , , , , , ,

Vanguard has removed the redemption fees on its domestic tax-managed funds. Effective immediately,  Vanguard Tax-Managed Balanced (VTMFX),  Vanguard Tax-Managed Capital Appreciation (VMCAX),  Vanguard Tax-Managed Growth and Income (VTGIX), and  Vanguard Tax-Managed Small-Cap (VTMSX) will stop charging a 1% redemption fee on fund shares held less than five years.

The news comes as flows into tax-efficient ETFs following similar strategies, which can be bought and sold throughout the day and carry no redemption fees (but often require brokerage commissions), have steadily increased. Meanwhile, Vanguard's tax-managed funds have not been big draws recently even though they are very competitive with ETFs on price and tax efficiency.

Ryan Leggio has a position in the following securities mentioned above: FAIRX. Find out about Morningstar’s editorial policies.