Index stock funds or individual stocks in taxable, bonds and REITs in tax-advantaged. Avoid combo or active managed funds if you can help it, stick to indexes to eliminate cap gains. I get hit with CGs every year from old Fido funds that I’ve held for 30 years, but am keeping income low for ACA purposes so don’t sell them off.
Bond yield in most cases does not have tax bennies, CGs and divs do (you basically get ~$80k tax-free every year for MFJ filing).
And maybe it’s time to go from three to two brokerage vendors … before Vanguard starts absorbing the fees/fines. Besides, after threatening for 4 or 5 years, it looks like Vanguard is going to start charging fees for paper statements if you have less than 1MM in their coffers -ex 401k. Neither Schwab, nor Fidelity charge, so I’m splitting my Vanguard funds between the two. I would prefer more diversification, but if Vanguard thinks I’m not worth a stamp and the printing costs, far be it from me to argue.
Looks like there is a class action lawsuit for this issue: IN RE VANGUARD CHESTER FUNDS LITIGATION - Case No. 2:22-cv-955-JFM
I got an email about the lawsuit yesterday and almost missed the email due to the email being flagged as junk. Subject line “IN RE VANGUARD CHESTER FUNDS LITIGATION - Case No. 2:22-cv-955-JFM“ and sent from “Claims Administratorinfo@strategicclaims.net”. The class action’s website is Vanguard Chester Funds Litigation | Strategic Claims Services
I’m finally reviewing the class action now and 2 bullet points stand out to me:
You may have previously received notice of a prior $40 million settlement in this Action (“Prior
Settlement”). That Prior Settlement was ultimately not approved by the Court due to the intervening settlement agreements that The Vanguard Group, Inc. (“Vanguard”) entered into with the U.S. Securities and Exchange Commission (“SEC”) and certain state regulators concerning substantially the same alleged conduct (“SEC Settlement”). The SEC Settlement required Vanguard to pay $92.91 million in remediation to an SEC Fair Fund (“Fair Fund”), which will be distributed to affected investors. After the Court denied approval of the Prior Settlement, Vanguard paid an additional $40 million into the Fair Fund, pursuant to the SEC Settlement. This $25 million Settlement provides compensation in addition to the $132.91 million that will be paid to investors through the Fair Fund.
This Settlement is not intended to preclude or limit Settlement Class Members’ ability to participate in the Fair Fund. The SEC has not yet determined exactly who will be eligible to recover in the Fair Fund or how or when it will be distributed. All questions about the SEC Settlement or Fair Fund should be directed to the SEC.
I was never notified of the original settlement or class action at all, but I was on this, which I find weird. Also, the the hell that the SEC has already collected millions of dollars for the Fair Fund and now is just sitting on it? WTF? Why is this the first notification we are receiving?
I guess I will fill this out and hope the SEC money comes through too. I need to check my notes, but I paid about $65k in extra taxes due to this nonsense.
I completely forgot about this lawsuit and missed the deadline (Feb 3, 2026) to file a claim.
I just called in and the person I spoke to said you can still submit a claim which may or may not get processed. To submit a claim go to Vanguard Chester Funds Litigation | Strategic Claims Services, download and fill out the “Notice of Pendency and Proposed Settlement of Class Action and Proof of Claim and Release Form” form under “Important documents”, and email the filled out form to info@strategicclaims.net w/ the subject line “Vanguard”
Got this response today after submitting my late claim yesterday:
Good morning,
Your claim has been received.
Claims submitted after the deadline must be marked late; it is up to the Court whether to process late claims. We cannot guarantee any claim submitted at this time will be processed. Claims submitted too late to be processed are kept on file.
If you have any further questions, feel free to contact us.
