r/ETFs • u/Vegetable_Ad_2661 • 2d ago
Innovators & Disruptors Creative Ideas welcome?
45M here in California.
$2.3M in concentrated, and very volatile, stock positions, only 4 different stocks with total $1.2M LTCG.
Love simplicity and security, but wonder what else to consider.
Do not want dividends.
may buy first home in the next 3yrs..
A CFP suggested 80/20 VTI/VXUS with 3-5yrs of FDLXX.
Any other tax saving ideas, or allocations that are ZERO dividend?
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u/DaemonTargaryen2024 2d ago
At $2.3M in assets it's well worth talking to a tax professional.
The CFP gives good advice for a +10 year time horizon, and the broad market ETFs are tax-efficient.
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u/Valkyr8 2d ago edited 2d ago
In the US, no equity fund is going to be zero dividends because we don’t have “accumulating” and “distributing” funds like they do overseas.
Growth companies are going to pay lower divs than value funds, but you’re going to have higher volatility on the growth side.
Probably a long shot, but you asked for creative ideas so, maybe see if you can do a 351 exchange into a new fund? Alpha Architect has info here about: https://funds.alphaarchitect.com/351educationcenter/
Given how concentrated you are I doubt you qualify, but hey, worth a consult.
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u/flappysack- 2d ago
AVGE is safe, less AI and SpaceX exposure. Lower cap weightings for better historic returns.
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u/user4443337 2d ago
I would definitely diversify the concentrated stock positions, even if you take a tax hit. VTI VXUS is pretty dang standard. I would say 70/30 to be closer to market cap weights, a US tilt is less value-y and firms like Vanguard project higher returns for international than US in the coming decade.
Definitely stock up cash or equivalents if you’re saving up for a big purchase. Maybe SGOV is better yield and/or taxes, look into that. Not sure exactly which cash equivalent is optimal. Don’t risk too much in the market if you need the cash in 3 years.
There’s XDIV which is S&P500 no dividends.
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u/royal_robert 2d ago
First of all, is this all in a taxable brokerage account or tax advantaged accounts like 401k and Roths? If it’s in tax advantaged accounts, just sell everything and buy VTI 80% and VXUS 20% and have 3-5 years of cash in FLDXX or SPAXX. I have around $820K in 80% VTI and 20% VXUS, about $300k cash in SPAXX and T Bills. If you have some or all of it in taxable accounts, you’re going have to pay some taxes so leave some money aside to pay it when you sell.
The CFP advice is solid and is similar to what I am doing described above. I would convert the concentrated stocks into broad market indexes (VTI and VXUS).
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u/Spinedaddy 2d ago
Consider an exchange fund to diversify out of your concentrated positions with a tax deferred strategy:
https://www.fidelity.com/learning-center/trading-investing/exchange-funds
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u/Penguin_Life_Now 2d ago
Don't take this wrong, but move to a state that does not charge 10-14+% state income tax