Tax Managed Funds vs Regular Ones

[jmxthievez]

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

[jively]

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

[mtgordon]

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.