The published after tax returns use a 1-size-fits-all tax rate, and are based on past returns. This is not the correct way to analyze tax efficiency.Over the last 10 years (ending 12/31/24) that's right Vanguard beat the others (see below). But over other periods I see Fidelity's comes in first, Vanguard second and Schwab third in terms of tax efficiency:VTSAX is more tax-efficient than either.
https://fundresearch.fidelity.com/mutua ... /315911693
https://investor.vanguard.com/investmen ... mance-fees
https://www.schwabassetmanagement.com/products/swtsx
after taxes on distributions and sale of fund shares over last 10 years ending 12/31/2024:
10.27% VTSAX
10.26% FSKAX
10.19% SWTSX
FSKAX and SWTSX do not have as many tools for controlling capital gains distributions as VTSAX. Holding one of them in a taxable account risks locking in the holding with embedded gains, making it tax-inefficient to switch to a different fund, and then having capital gains distributions as an extra tax drag. It is unlikely that VTSAX will distribute capital gains, a clear win.
The other thing to look at is the percentage of dividends that have been qualified.
Statistics: Posted by Northern Flicker — Sun Mar 02, 2025 10:54 pm