Exchanging Capital Group American funds for VG funds

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Topic Author
happypediatrician
Posts: 25
Joined: Thu Apr 08, 2021 11:01 pm

Exchanging Capital Group American funds for VG funds

Post by happypediatrician »

Hello,

I currently use a three fund portfolio with VG.

I helped my parents move over their retirement accounts from Capital Group American Funds to VG, given they had average expense ratio of 0.60 and layered on 0.25 advisor fee. Thus, wanted to bring cost down, and felt comfortable managing their funds.

I moved over all the money in kind. Plan to sell out of all funds into a money market account, then simply purchase VTSAX, VTIAX, VBTLX at appropriate asset allocation for age/risk tolerance. There is no fee for selling out.

I just want to double check this is the best way to make this move before executing.

Thanks so much!

-Rob
Kids are not little adults
prd1982
Posts: 1786
Joined: Sun Jan 08, 2017 3:43 pm

Re: Exchanging Capital Group American funds for VG funds

Post by prd1982 »

Sounds good. Some people hate to be out of the market for several days. If you are in this category, consider selling a portion of American Funds, wait until settled in 3 days and buy VG. Repeat the process until all converted. Just be sure you don't have an overly large % in stocks at any stage of the process.

Also, i would have assumed the .6% included the .25% advisor fee (12b).
dbr
Posts: 46181
Joined: Sun Mar 04, 2007 8:50 am

Re: Exchanging Capital Group American funds for VG funds

Post by dbr »

Sounds fine. You said accounts and then "a" money market fund. If you are talking about retirement accounts there are presumably several and the transactions have to be kept in each account, meaning more than one settlement fund and being sure the sales don't also trigger a distribution. For example, there is a difference between sell everything in an account except the settlement fund and sell everything while also implying that the account be closed and the proceeds dumped in your checking account.

It might be wise to complete all the transactions in one single account at a time and not risk that something get distributed to the wrong other account. I might even sell one fund at a time and verify completion of each transaction one by one. How many transactions are there to be?
Topic Author
happypediatrician
Posts: 25
Joined: Thu Apr 08, 2021 11:01 pm

Re: Exchanging Capital Group American funds for VG funds

Post by happypediatrician »

Sorry I should have clarified. These are all in tax advantaged accounts.
4 accounts:
2x IRA's
1x ROTH IRA
1x SepIRA

I have already moved the money over to VG. Now money sitting in VG taxed advantage accounts, tickers:
ABNDX, AIVSX, ANCFX, ANWPX, CAIBX, CWGIX.

Thus, 6x funds to sell off, from each parent, thus 12x transactions total.

Thanks!

-Rob
Kids are not little adults
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