Bob,bobmoore wrote:What is it people don't like about Vanguard's Managed Payout Growth and Distribution Fund (VPGDX).
What is it people don't like about Vanguard's Managed Payout Growth and Distribution Fund (VPGDX).
Vanguard Managed Payout Funds are not guaranteed to achieve their investment objectives and are subject to loss, and some of their distributions may be treated in part as a return of capital.
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SSSS wrote:...Also it includes a 10% allocation to Vanguard's "Market Neutral" fund which is pretty dubious on its own. It's actively managed, has by far the highest expense ratio of any Vanguard fund...
There are two problems to solve in retirement: 1) How to allocate one's portfolio, and 2) How much to withdraw every month to meet expenses.bobmoore wrote:But what is it people don't like? I think the allocation and fees are good. And I wouldn't need to take the full distribution every year.
I assume you refer to Vanguard Managed Payout Distribution Focus Fund Investor Shares (VPDFX), 64.5% stocks.riskreward wrote:The actual stock % of the least aggessive payout fund shows at 64% but 10% is invested in a market neutral fund so realistically it has about 54% purely unhedged stock investment which mirrors the 2015 target retirement fund.
nisiprius wrote:I don't know why Market Neutral and commodities failed to work their risk-reduction magic, but in fact they did not.
Well, market collapses happen from time to time, and if a fund company offers a fund that is intended to provide reasonably stable retirement income, and it is investing in 64.50% stocks (Managed Payout Distribution Focus) when other funds with the same objective are at 35.56% stocks (Wellesley Income), 29.15% stocks (Target Retirement Income), and 24.57% stocks (LifeStrategy Income), it is fair to say that Managed Payout is very different and fair to ask whether it's riskier and whether buyers understand that.Alex Frakt wrote:Because that magic is based on backtesting over all conditions, as opposed to backtesting (or just thinking about what happens) during market collapses. Typically market collapses mean high volatility, low liquidity and depressed economies. Taken together that means the costs of hedging increases while commodity prices (with the occasional exception of gold) decrease. So your magic fails just when it's needed the most.nisiprius wrote:I don't know why Market Neutral and commodities failed to work their risk-reduction magic, but in fact they did not.
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