I have assets invested in Vanguard Total Bond Market Index Trust in my company’s 401k. I think this is VBTIX, though to be honest, I’m not sure if the “trust” in the account title refers directly to that fund, or is some larger encompassing entity.
In any case, I’ve been reviewing past statements for my 401k and I can find no mention of distribution transactions for this account, no dividends or cap gains. The only transactions listed are my payroll contributions and employer matching contributions.
Is this unusual? Is there something I’m not understanding about this asset such that distributions are not happening or are not called out?
I’ll give the plan manager a call tomorrow, but I thought someone here might know what’s up with this.
Thanks!
VBTIX distributions in 401k
- anon_investor
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Re: VBTIX distributions in 401k
It is probably a Collective Investment Trusts, which do not have any kind of distributions:nonemoreyears wrote: ↑Sun Jul 25, 2021 8:15 pm I have assets invested in Vanguard Total Bond Market Index Trust in my company’s 401k. I think this is VBTIX, though to be honest, I’m not sure if the “trust” in the account title refers directly to that fund, or is some larger encompassing entity.
In any case, I’ve been reviewing past statements for my 401k and I can find no mention of distribution transactions for this account, no dividends or cap gains. The only transactions listed are my payroll contributions and employer matching contributions.
Is this unusual? Is there something I’m not understanding about this asset such that distributions are not happening or are not called out?
I’ll give the plan manager a call tomorrow, but I thought someone here might know what’s up with this.
Thanks!
https://www.bogleheads.org/wiki/Collect ... ent_Trusts
Re: VBTIX distributions in 401k
Anon_investor is right, it's likely a CIT. The "trust" in the fund's name suggests so. VBTIX is the institutional class of Total Bond, with even lower expenses than the Admiral class, but like any other mutual fund (but unlike CITs) it does have distributions.
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Re: VBTIX distributions in 401k
Ah, interesting. Yup, looking at the description of the fund now, it is indeed a collective trust. The description says:
So would the distributions of the underlying fund just get rolled into the share price over time somehow?The trust portfolio currently invests all its assets in Institutional Select shares of the Vanguard Total Bond Market Index Fund which employs an indexing investment approach designed to track the performance of the Bloomberg Barclays U.S. Aggregate Float Adjusted Bond Index.
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Re: VBTIX distributions in 401k
Oops, answering my own question. From the wiki article anon_investor kindly pointed me to:
Thanks for clearing this up for me!Dividend reinvestment. A CIT does not make dividend distributions. Dividends are added and accumulate in the net asset value of a CIT share.
Re: VBTIX distributions in 401k
One advantage of the CIT is you can calculate returns based on just the share price, without having to take distributions into account.