Re-balance Cycle Reminder All MyPlanIQ’s newsletters are archived here.

For regular SAA and TAA portfolios, the next re-balance will be on Monday, October 29, 2018. You can also find the re-balance calendar for 2017 on ‘Dashboard‘ page once you log in.

As a reminder to expert users: advanced portfolios are still re-balanced based on their original re-balance schedules and they are not the same as those used in Strategic and Tactical Asset Allocation (SAA and TAA) portfolios of a plan.

Please note that we now list the next re-balance date on every portfolio page.

Taxable vs. Tax Exempt High Yield Bonds

We continue our discussion on high yield bonds from last week’s newsletter. We are particularly interested in comparing taxable high yield bonds with tax exempt high yield bonds. First, let’s take a look at the recent returns. 

Tax exempt high yield bonds are performing well

Taxable high yield vs. tax exempt high yield bond funds (as of 10/1/2018):
1Yr AR3Yr AR5Yr AR10Yr ARTrailing 12 Month YieldTaxable Equivalent Yield*
NHMAX (Nuveen High Yield Municipal Bond A)1.9%4.3%5.8%7.9%6.4%5.15%7.9%
VWAHX (Vanguard High-Yield Tax-Exempt)-0.0%1.8%3.7%4.9%5.5%3.78%5.8%
VWEHX (Vanguard High-Yield Corporate Inv)1.5%2.2%6.2%5.1%7.7%5.34%5.34%

* Taxable Equivalent Yield is based on the highest federal tax bracket (35%)

It stands out that tax exempt bond funds (especially Nuveen fund NHMAX) have had a comparable or even better return than taxable fund VWEHX, even before tax consideration. For example, for the last 5 years, NHMAX returned 7.9% annually compared with VWEHX’s 5.1%. 

Please login or register an account to view the newsletter