Tax Managed Funds vs Regular Ones
 

Hey guys,

I've decided to start a vanguard account and I was wondering between the benefits of tax managed funds vs non tax managed funds.

For example, if you take a look at these recommended portfolios, http://www.fundadvice.com/portfolio.html#vanguardequity

you can see a clear difference in fund allocation. I know that tax managed funds cut down on dividends and sell stocks at a loss instead of waiting for them to recover in order to cut down on capital gain tax, but what I don't know is the benefit for my situation.

I am 21 years old and a senior in college, I had a paid internship this summer. I'm looking to open a fund with about 100k in it to start (from poker), am I eligible for any tax exemptions/exclusions as a student? If not, then do tax managed funds make sense for me?

Thanks guys

Re: Tax Managed Funds vs Regular Ones
 

The allocations are not that different between regular and tax managed. The tax managed does not use REIT fund, so it slightly increases the allocation to the 4 US funds. Other than that, the asset allocation is the same.

How much do you expect to earn after college? If you will be in a high tax bracket, you'll probably end up with more after-tax wealth using the tax-managed funds.

-Tom

Re: Tax Managed Funds vs Regular Ones
 

While we're on the subject, are tax managed funds or ETFs more tax efficient. I believe you will only have to pay 15% capital gains taxes on ETFs if you hold them long enough (1.5 years?). However you still get some dividends that would be taxed along the way.