Marko-ERParticipantStatus: Resident, Small Business OwnerPosts: 81Joined: 03/09/2016
I know that at least for vanguard, there are closely tied ETFs and mutual funds. And for mutual funds, if you exceed a certain amount (say 3K or 10K), you get automatically bumped/exchanged into admiral share class, which is not a taxable event. Does anyone know: can you exchange ETF (say BND) to a vanguard mutual fund with the same holdings (say VBMFX), in a regular, non-tax advantaged brokerage account w/o triggering a taxable event?February 7, 2019 at 11:58 am MST #188988Faithful StewardParticipantStatus: Financial Advisor, Small Business OwnerPosts: 188Joined: 06/12/2017
Does anyone know: can you exchange ETF (say BND) to a vanguard mutual fund with the same holdings (say VBMFX), in a regular, non-tax advantaged brokerage account w/o triggering a taxable event?Click to expand…
The answer is no, you cannot. Read below from Vanguard’s own website: https://investor.vanguard.com/etf/faqs
Can I convert my conventional Vanguard mutual fund shares to Vanguard ETF Shares?
Yes. Most funds that offer ETF Shares will allow you to convert from conventional shares of the same fund to ETF Shares. (Four of our bond ETFs—Total Bond Market, Short-Term Bond, Intermediate-Term Bond, and Long-Term Bond—don’t allow for conversions.)
Conversions are allowed from both Investor and Admiral™ Shares and are tax-free if you own your mutual fund and ETF Shares through Vanguard.
Keep in mind that you can’t convert ETF Shares back to conventional shares. If you decide in the future to sell your Vanguard ETF Shares and repurchase conventional shares, that transaction could be taxable.
If you have a brokerage account at Vanguard, there’s no charge to convert conventional shares to ETF Shares. If you have questions, call us at 866-499-8473.
If you own your Vanguard mutual fund shares through another broker, keep in mind that some brokers may not be able to convert fractional shares, which could result in a modest taxable gain for you. Other brokers may also charge a fee for a conversion. Contact your broker for more information.
Michael Peterson, CFP® | Faithful Steward Wealth Advisors
http://www.fswealthadvisors.com | (717) 496-0900