WEEKLY BRIEF | Headlines Roar, Markets Shrug

Hello, and welcome to the IVA Weekly Brief for Wednesday, April 8.

There are no changes recommended for any of our Portfolios.

Tuesday brought dramatic headlines as the President warned that “a whole civilization will die tonight, never to be brought back again.”

But traders barely flinched. 500 Index (VFIAX), Total International Stock Index (VTIAX) and Total Bond Market Index (VBTLX) each edged 0.1% higher on the day.

With the U.S. and Iran agreeing to a two-week ceasefire last night, stocks are pointing higher this morning while oil prices are falling.

Of course, plenty of questions remain. Will the ceasefire hold? Will it lead to something more durable? Will Iran attempt to extract fees from shippers moving through the Strait of Hormuz—and if so, what precedent does that set elsewhere?

We don’t have answers yet. But for now, a ceasefire is a welcome development—full stop.

Time will tell what comes next.

Boost Extended

When Vanguard first “boosted” the yield on Cash Plus Account in January, the extra 0.25% was set to expire at the end of April.

Well, the “temporary” boost is sticking around. Vanguard has extended it through September 2026.

I’m not complaining—an extra 0.25% on cash is nice. But at some point, it’s fair to ask: when does a “boost” stop being a promotion and start being the actual yield?

More importantly, I wouldn’t overhaul your cash setup based on a temporary rate.

PRIMECAP Goes ETF

If you’ve been waiting for a more tax-friendly way to invest alongside PRIMECAP, your wait is almost over.

PRIMECAP Management—a 40-year stalwart whose funds have long played a key role in the IVA Portfolios—filed with the SEC on Monday to launch its first ETF: the PRIMECAP Odyssey Discovery ETF.

Premium Members can read my full take here. But the punchline is that I expect to be an early adopter. That said, we’re still missing a few key details.

One important clarification, as several IVA readers asked: this ETF will be a separate fund. You won’t be able to exchange from an existing PRIMECAP-run mutual fund into the ETF tax-free.

That matters.

If you’re considering making the switch, be mindful of the tax implications. Selling a long-held PRIMECAP fund could result in a sizable capital gain and a large tax bill.

If that’s a concern, one workaround is to direct distributions from your existing fund to cash and use those proceeds to build a position in the ETF over time. It’s not a perfect solution, but it can help you maintain your PRIMECAP exposure while gradually shifting to the more tax-friendly vehicle.

With the Discovery ETF not due out until June, you've got time to dot your i’s and cross your t’s before acting.

Our Portfolios

Our Portfolios are showing mixed returns for the year through Tuesday. The Aggressive Portfolio is down 0.5%, the Aggressive ETF Portfolio is down 0.7%, the Growth Portfolio is down 0.8%, the Moderate Portfolio is up 1.5% and the Conservative Portfolio is up 1.0%.

This compares to a 2.6% decline for Total Stock Market Index (VTSAX), a 3.3% gain for Total International Stock Index (VTIAX), and a 0.2% return for Total Bond Market Index (VBTLX). Vanguard’s most aggressive multi-index fund, Target Retirement 2070 (VSNVX), is down 0.2% for the year, and its most conservative, LifeStrategy Income (VASIX), is down 0.1%.

IVA Research

Yesterday, I shared my annual review on Vanguard funds’ tax efficiency and after-tax returns with Premium Members.

Until my next IVA Weekly Brief, have a safe, sound and prosperous investment future.