@msf, thanks for the correction and pointing out the difficulty of creating classes within Regular TDF fund-of-funds structure. So, may be Vanguard should have skipped the step #1 (change in the minimum required for the Institutional TDF) and should have just proceeded directly to the merger step #2 without doing anything beforehand. But that is with perfect 20-20 hindsight.
It seems that I mixed the CG and class details of Regular TDF series vs Institutional TDF series with another unrelated Regular TSM series (VTSMX / VTSAX / VITSX ...) vs Institutional TSM series (VITNX /...) where the latter series has had quite high CGs due to large outflows. But there, no merger/consolidations are planned and no lawsuits have been filed (or, I haven't heard about them). The Institutional classes within these 2 TSM series now have the same ERs, but the Regular TSM series has even lower ER classes and also the patented VG ETF class, so some artificial motivations for outflows from latter series may exist. And the parties suffering from unexpected large CGs are big institutional folks and they are supposed to be better informed and resourced.

The Regular TDF did not have its own institutional class. It didn't even have Admiral shares. Below is an excerpt from the 2020 SAI for the funds.
https://www.sec.gov/Archives/edgar/data/752177/000168386320000191/f2353d1.htm
That's why Vanguard would had to have created a Regular TDF institutional class.
Edit: As I think about it, creating such a share class would have been problematic. Vanguard charged no management fees or any direct fees at all for these funds. The total ER came from acquired fund expenses. That's likely why Vanguard created a clone fund with lower expenses. The institutional clone cost less because it purchased less expensive shares of the same underlying funds. I don't know how Vanguard could create a share class of the retail series with lower charges than what the underlying funds were charging.

DESCRIPTION OF THE TRUST
Vanguard Chester Funds (the "Trust") currently offers the following funds and share 
classes (identified by ticker symbol):
Share Classes	 
Fund							Investor Admiral	Institutional
Vanguard PRIMECAP Fund					VPMCX	VPMAX
Vanguard Target Retirement 2015 Fund			VTXVX	—		—		 
Vanguard Target Retirement 2020 Fund			VTWNX	—		—
Vanguard Target Retirement 2025 Fund			VTTVX	—		—
Vanguard Target Retirement 2030 Fund			VTHRX	—		— 	 
Vanguard Target Retirement 2035 Fund			VTTHX	—		—
Vanguard Target Retirement 2040 Fund			VFORX	—		—
Vanguard Target Retirement 2045 Fund			VTIVX	—		—
Vanguard Target Retirement 2050 Fund			VFIFX	—		—
Vanguard Target Retirement 2055 Fund			VFFVX	—		—
Vanguard Target Retirement 2060 Fund			VTTSX	—		—	
Vanguard Target Retirement 2065 Fund			VLXVX	—		—
Vanguard Target Retirement Income Fund			VTINX	—		—	
Vanguard Institutional Target Retirement 2015 Fund	—	—		VITVX 	 	 
Vanguard Institutional Target Retirement 2020 Fund	—	—		VITWX 	 	 
Vanguard Institutional Target Retirement 2025 Fund	—	—		VRIVX 	 	 
Vanguard Institutional Target Retirement 2030 Fund	—	—		VTTWX 	 	 
Vanguard Institutional Target Retirement 2035 Fund	—	—		VITFX 	 	 
Vanguard Institutional Target Retirement 2040 Fund	—	—		VIRSX 	 	 
Vanguard Institutional Target Retirement 2045 Fund	—	—		VITLX 	 	 
Vanguard Institutional Target Retirement 2050 Fund	—	—		VTRLX 	 	 
Vanguard Institutional Target Retirement 2055 Fund	—	—		VIVLX 	 	 
Vanguard Institutional Target Retirement 2060 Fund	—	—		VILVX 	 	 
Vanguard Institutional Target Retirement 2065 Fund	—	—		VSXFX 	 	 
Vanguard Institutional Target Retirement Income Fund	—	—		VITRX 

A short recap:
There was a Regular TDF series (with multiple classes, including its own Institutional class), and another distinct Institutional TDF series ("Institutional" was in its name) with super high minimum and super low ER. Then 2 VG events happened, in hindsight, in a very poor way/order. First, the minimum for the Institutional TDF series was lowered that caused the stampede out of the Regular TDF series into the Institutional TDF. Second, the Institutional TDF series was merged into the Regular TDF series (so, the Regular TDF name and tickers were the survivors) and the new ER lowered below the ERs of both series forms. So, all that money that flowed out of the Regular TDF from step #1 came right back into the Regular TDF after merger step #2. In its PR releases at the times, VG mentioned only the ER savings in step #1 and then also in step #2, and didn't mention/acknowledge/admit the CG tax issues/hits by nonretirement investors until the class action suits and state regulatory actions were filed. This is called penny-wise, pound-foolish.
What VG should have done? Instead of step #1, it should have just lowered the ER of the Regular TDF institutional class to match that of Institutional TDF ahead of the merger, and then the merger step #2 wouldn't have created all this mess.

Thanks, msf.
I wonder why Vanguard didn't create a new $100M minimum share class and then convert shares.
This would have saved some retail investors a lot of grief!

Was it possible for Vanguard to preemptively convert retail fund shares
(for $100M+ accounts) to institutional fund shares and avoid this debacle?

Yes and no. For, say the 2030 target date, there were two completely different funds. A retail fund and an institutional fund. What Vanguard did was lower the amount required to get into the institutional fund - thus triggering a mass migration.
The retail fund didn't have institutional shares (at least I don't think so). So Vanguard could not simply convert shares in the retail class. But Vanguard could have created a new $100M min share class in the retail fund and then converted shares. Then institutional investors wouldn't have migrated from the retail fund to the institutional clone.

I suppose it's possible, but the investors would had to have been lucky in their timing. For example, suppose they looked at Vanguard's projected cap gains distributions and decided that they had to pay a Q4 estimate by Jan 15th. They might have sold at the top of the market.
OTOH, if investors waited until early April to sell shares to pay the extra taxes, they already lost quite a bit.
Either way, one has to ask where they're getting the cash from to buy back their shares. If they had the cash on hand, they might not have sold their shares to pay the extra taxes.
Another concern is that the large distributions put many investors into higher tax brackets, even for cap gains. They might have been in the 0% bracket but got pushed into the 15% bracket. And those in the 15% bracket might have been pushed into the 20% bracket. Not to mention the 3.8% Medicare surtax on investment income above a certain threshold.
Given that target date funds are designed to be an all-in-one portfolio, it would not be surprising to see even relatively small investors pushed into higher brackets.
In short, it's a nice hope that some of these investors came out better by being forced to sell shares at a market high. But given the difficulty in raising cash to rebuy later, given the higher brackets that their "windfall" pushed them into, it seems more likely that they got creamed.

Was it possible for Vanguard to preemptively convert retail fund shares
(for $100M+ accounts) to institutional fund shares and avoid this debacle?

Couple of months ago the guy that fixed our dryer told me he was buying crypto. At that time it was only down a little. I asked him if he was buying the dip. He said "Yep." And then said he was going on vacation to New Zealand.
I hope he enjoyed his vacation.

I fear this is more widespread than we realize. If “the dryer guy” was hoodwinked, I’ll bet so too were “the butcher, the baker and the candlestick maker”. In short, a lot of people right now are likely trying to cope with a serious breach in their household finances.
Clip from today’s WSJ suggests how some of the unwitting might have been snickered into thinking their money was perfectly safe.
To customers, Voyager marketed its offerings as safe, particularly for U.S. dollar deposits. “In the rare event your USD funds are compromised due to the company or our banking partner’s failure, you are guaranteed a full reimbursement (up to $250,000),” Voyager wrote in a 2019 post.
Voyager’s main banking partner, New York-based Metropolitan Commercial Bank, also sought to reassure customers of the crypto broker that they would be protected. The bank said on its website that an omnibus account containing funds of Voyager customers was insured by the Federal Deposit Insurance Corp., and that standard deposit insurance covers up to $250,000 per depositor. It noted, however, that FDIC insurance “is available only to protect against the failure of Metropolitan Commercial Bank” and that it “does not protect against the failure of Voyager.”
From: “Crypto Broker Voyager Digital Files for Bankrupcy”
Published in: The Wall Street Journal July 7, 2002
By Eliot Brown & Yifan Wang

+1.

How often do they re-appraise - maybe annually? Interesting that they supposedly calculate a DAILY NAV.
Only $2.5K/1K minimum to invest. Fund size has grown to over $6B. Since inception at end of 2012, looks like only 3 (slightly) negative quarters! Impressive.
Too bad its an interval fund. Not sure how many brokers offer it, but apparently you can submit an application directly to Bluerock.

Bluerock TI+ Real Estate is an illiquid multi-manager interval-fund related to private real estate. Asset valuations are from appraisals. You can buy interval-funds anytime from brokers/advisors, but there are only quarterly redemption windows for small amounts.
A Share: TIPRX / C Share: TIPPX / I Share: TIPWX / L Share: TIPLX / M Share: TIPMX
https://bluerock.com/bluerock-total-income-plus-real-estate-fund/wp-content/uploads/sites/3/2022/04/TI-Fact-Sheet-Q1-2022-I-Share.pdf

See yogi's thread (citing also WSJ and IBD)
https://mutualfundobserver.com/discuss/discussion/59772/vanguard-settles-on-tdfs-with-ma-regulators
The reporting on this has left me rather confused. As near as I can tell, Massachusetts was focused on the marketing of the funds, not how Vanguard disrupted them. The WSJ writes:

Vanguard hadn’t explicitly warned investors that the funds could generate gigantic tax bills, the Journal reported. ... In January, following the Journal’s report, Massachusetts regulators launched an investigation into how Vanguard had marketed the funds.

And an earlier Wealth Management.com piece talks about Mass.' concerns with "'potential tax disclosure issues' with b/d's target date funds" and that Mass. sent letters to "Vanguard, Fidelity Brokerage Services [not FMR as manager of its target date funds], ...".
All of which leads me to think that this settlement has got nothing to do with how Vanguard generated the cap gains distribution and everything to do with how the funds were sold.
Assuming that's correct, wouldn't any broker/dealer who sold these funds be a target of Mass.' ire? Admittedly most sales of Vanguard fund shares to retail investors are direct through Vanguard.
I'm troubled by Mass.' complaint (if I'm reading this correctly), that investors didn't have adequate warning. The ultimate marketing material for funds is their prospectus. By law it must precede or accompany any sale of a fund. The prospectus tax disclosures for the Vanguard target date funds is nearly identical, line for line, with the prospectus disclosure for VHCOX (Capital Opportunities), a higher risk fund. One finds the same bullet item:
    • Capital gains distributions may vary considerably from year to year as a result of the Funds' normal investment activities and cash flows.
If the target date funds failed to give adequate disclosure about potential risks (viz. that a large exodus could generate ginormous tax bills), then likewise VHCOX has failed to give adequate warning. The only difference is that the VHCOX investors haven't gotten burned yet.
An additional source of confusion is that none of the reporting indicates what effect, if any, this will have on investors' suit against Vanguard - for creating the tax liability, not for failing to warn. Does the settlement preempt this suit? Does the settlement permit investors to opt out so that they can continue their suit. What is the status of the investor suit?
https://www.financialadvisoriq.com/c/3536934/449764/vanguard_sued_over_taxable_distributions_tdfs
Class Action Complaint

Travelled to Montpelier on an academic related college trip with a bunch of other 17-18 year olds in the early 70s late 60s. Stayed at a hotel there. Took rail part way out. Remember changing trains in Montreal. Yes lovely area. Winding mountain roads will scare *#*# out of you. But had a marvelous time.
@Crash - This is only borderline OT. Suggest it remain here. But anyone who clicks on a thread titled “Ben & Jerry’s” deserves whatever they get :) I do own some NSRGY. More of a recession hedge. Don’t know, but they probably compete with Ben & Jerry’s in some areas …

Hi Balubalu
Sorry
July13th
Imho Labu is probably good etf to add now fyi hagd lol

Several prominent fund managers and the CIO exited Matthews Asia since 2020.
Bill Hackett, the CEO for 13 years, retired on June 30, 2022.
From the July M* FundInvestor newsletter:
"Cooper Abbott joined Matthews International Capital
Management as CEO on June 13, 2022, succeeding
Bill Hackett, who had served as CEO for 13 years and
is retiring on June 30. This development is unsur-
prising, because Matthews announced in December
2021 that Hackett was planning on retiring in
mid-2022 and that a search was underway for
his replacement."
"Abbott has more than 20 years of senior investment
management experience. He previously served
as president and chairman at Carillon Tower Advisors
(where he led that firm’s acquisitions of several
asset managers during his tenure) and as executive
vice president of investments and co-chief operating
officer at Eagle Asset Management (which is an affil-
iate of Carillon Tower Advisors)."

in Mass. only
https://www.wealthmanagement.com/regulation-compliance/vanguard-pay-6m-over-target-date-fund-investigation#:~:text=Vanguard will pay more than,investors holding taxable capital gains.
or
https://www.reuters.com/legal/transactional/vanguard-pay-millions-mutual-fund-investors-hit-with-big-tax-bills-2022-07-06/
or
https://money.usnews.com/investing/news/articles/2022-07-06/vanguard-to-pay-millions-to-mutual-fund-investors-hit-with-big-tax-bills

CME Fedwatch is a better tool for rate hike probabilities (95.1% for 75-bps hike at July FOMC) than the LV odd-makers,
https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html

For the week ending on 7/6/22, Sentiment became extremely negative again: Bearish remained the top sentiment (52.8%; very high) & bullish remained the bottom sentiment (19.4%; very low); neutral remained the middle sentiment (27.8%; below average); Bull-Bear Spread was -33.4% (very low). Investor concerns included recession; inflation & supply-chain disruptions; the Fed; market volatility (VIX, VXN, MOVE); Russia-Ukraine war (19+ weeks). For the Survey week (Thursday-Wednesday), stocks were flat-up, bonds up, oil collapsed, gold tanked, dollar up. #AAII #Sentiment #Markets
https://ybbpersonalfinance.proboards.com/thread/141/aaii-sentiment-survey-weekly?page=6&scrollTo=696

Energy situation is evolving quickly. Less than 2 months ago crude oil was priced near $120-130. Also there was concern about food shortage due to the Ukraine war. Commodities and their futures are the few brighter spots in 2022. Now it is the reverse.
https://aljazeera.com/economy/2022/7/6/oil-steadies-after-plunging-on-recession-fears
Wonder if Powell will raise another 75 bps in July? In addition, China’s demand on oil is considerable smaller due to their zero-tolerance COVID policy. Some lockdowns are beginning to lift in several large cities.

Energy commodities etf funds got killed slaughterd past 3 wks
How much do you suggest portfolio in commodity energy?? 5%??

C'mon. You know that the only one who can answer a question like that is yourself.
Since I can afford NOT to tap my portfolio at all, I'm not doing it. My time-horizon gives me leeway to suffer through these awful days. There is still more pain to come. I heard a talking head on Bloomberg say the SP500 would go to 3,100.
I'm still overweight in PRWCX. I just added a bit at the end of last month. Now it's 36.8% of total. Ya, that's a big bet.
I'm personally holding 6.27% of my total in Materials at the moment. That compares to 2.47% in the SP500.
Energy: 10.24% vs 4.8% in the SP500.
PRNEX PRFDX ET
(And PRWCX holds ZERO in Energy! And only 1.3% of its portfolio in Materials.)
I don't know how, and don't care to learn how, to play the game of shorting stocks. My only bond fund right now is HY TRP TUHYX. Yield is now up to 6.84%. Bonds are down to 20% of total portfolio. I bought my stock funds at the highs, early in the year. I've rearranged and added a bit since then. But it still feels like sitting in a big giant pile of doggie poopies. From time to time, I continue to buy, bringing down my cost-basis.
Also own TRAMX. PRISX. BRUFX. RGR. BHB.