How to approximate Vanguard Balanced Index Fund Admiral Shares (VBIAX) with two other Vanguard funds?

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GaryA505
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How to approximate Vanguard Balanced Index Fund Admiral Shares (VBIAX) with two other Vanguard funds?

Post by GaryA505 »

How could you approximate Vanguard Balanced Index Fund Admiral Shares (VBIAX) with two other Vanguard funds?

OK, the VBIAX fund is a 60/40 allocation. So, let's say you wanted to put 60% in a Vanguard stock fund and 40% in a Vanguard bond fund, and wanted approximately the same holdings as VBIAX, what would two funds would that be?

I'm saying I'm going to do this, I'm just curious.
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GaryA505
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Re: How to approximate Vanguard Balanced Index Fund Admiral Shares (VBIAX) with two other Vanguard funds?

Post by GaryA505 »

OK I know, I'm responding to my own post.

60% Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX)
40% Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX)

or

60% Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX)
40% Vanguard Intermediate-Term Bond Index Fund Admiral Shares (VBILX)

?
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livesoft
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Re: How to approximate Vanguard Balanced Index Fund Admiral Shares (VBIAX) with two other Vanguard funds?

Post by livesoft »

1. Open 2 different internet browser windows.

2. Navigate to morningstar.com's Instant X-ray in both of them.

3. In one, enter $10000 of VBIAX and see the X-ray result.

4. In the other enter $6000 for one fund of stocks and $4000 for another fund of bonds and see the X-ray result.

5. Does result of 3 match the result of 4? If Yes, stop.

6. If no, change funds for step 4 and repeat.
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Levett
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Re: How to approximate Vanguard Balanced Index Fund Admiral Shares (VBIAX) with two other Vanguard funds?

Post by Levett »

Gary,

If you are attracted to VBIAX, why would you want to approximate it?

Why not buy it?

(Perhaps I have missed something.)

Lev
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Re: How to approximate Vanguard Balanced Index Fund Admiral Shares (VBIAX) with two other Vanguard funds?

Post by GaryA505 »

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Last edited by GaryA505 on Fri Jun 16, 2017 4:33 pm, edited 1 time in total.
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Re: How to approximate Vanguard Balanced Index Fund Admiral Shares (VBIAX) with two other Vanguard funds?

Post by GaryA505 »

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Re: How to approximate Vanguard Balanced Index Fund Admiral Shares (VBIAX) with two other Vanguard funds?

Post by GaryA505 »

Levett wrote:Gary,

If you are attracted to VBIAX, why would you want to approximate it?

Why not buy it?

(Perhaps I have missed something.)

Lev
Yes, you missed something.
Let's say you liked the idea of this balanced fund, but wanted a 65/35 or 70/30 split.
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Re: How to approximate Vanguard Balanced Index Fund Admiral Shares (VBIAX) with two other Vanguard funds?

Post by nisiprius »

I'm going to say it the simple way first, then refine.

Vanguard Balanced Index Fund is virtually identical to holding
60% Vanguard Total Stock Market Index Fund, VTSMX, and
40% Vanguard Total Bond Market Index Fund, VBMFX, and rebalancing frequently.

Up until fairly recently, Vanguard Balanced Index Fund was literally a fund-of-funds, and literally held
60% Vanguard Total Stock Market Index Fund and
40% Vanguard Total Bond Market Index Fund.

Now, their description of the fund's investment strategy and policy says:
With 60% of its assets, the fund seeks to track the investment performance of the CRSP US Total Market Index....
With 40% of its assets, the fund seeks to track the investment performance of the Bloomberg Barclays U.S. Aggregate Float Adjusted Bond Index....
Now, match that up with the similar descriptions for Total Stock:
The fund employs an indexing investment approach designed to track the performance of the CRSP US Total Market Index....
and for Total Bond:
The fund employs an indexing investment approach designed to track the performance of the Bloomberg Barclays U.S. Aggregate Float Adjusted Bond Index....
That's all it is. There ain't no more. 60% Total Stock, 40% Total Bond.

There are four Vanguard LifeStrategy funds that hold four-fund portfolios--Total [US] Stock, Total International Stock, Total [US] Bond, Total International Bond--at four levels of aggressiveness: Growth (80/20), Moderate Growth (60/40), Conservative Growth (40/60), and Income (20/80) that might be considered as one-fund all-in-one solutions for allocations other than 60/40, and for those who go along with a global allocation.
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Re: How to approximate Vanguard Balanced Index Fund Admiral Shares (VBIAX) with two other Vanguard funds?

Post by GaryA505 »

nisiprius, you rock!

I'm also going to study up on those Life Strategy funds.

I've got sort of a "messy" conglomeration of mutual funds in 3 different accounts, and I've also got about $100K in cash that I need to get working for me. I'm doing some homework before I make my plan.

A Bogleheads 2-fund or 3-fund approach is looking better and better.
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Re: How to approximate Vanguard Balanced Index Fund Admiral Shares (VBIAX) with two other Vanguard funds?

Post by Levett »

"Let's say you liked the idea of this balanced fund, but wanted a 65/35 or 70/30 split."

But that's not what you originally said. :wink:

Lev
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Re: How to approximate Vanguard Balanced Index Fund Admiral Shares (VBIAX) with two other Vanguard funds?

Post by Christine_NM »

nisi -

Balanced Index has never been a fund of funds.
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Re: How to approximate Vanguard Balanced Index Fund Admiral Shares (VBIAX) with two other Vanguard funds?

Post by GaryA505 »

Levett wrote:"Let's say you liked the idea of this balanced fund, but wanted a 65/35 or 70/30 split."

But that's not what you originally said. :wink:

Lev
I wanted to keep the question simple, without bringing in a different AA to it. :sharebeer
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pak1343
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Re: How to approximate Vanguard Balanced Index Fund Admiral Shares (VBIAX) with two other Vanguard funds?

Post by pak1343 »

I am rolling over to previous employer's tax deferred plans to 1 IRA with Vanguard. I am going to do VBIAX 50% and VWIAX 50%. What does everyone think? Is this ok. I am medically retired at 58yo. Thx.
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Re: How to approximate Vanguard Balanced Index Fund Admiral Shares (VBIAX) with two other Vanguard funds?

Post by GaryA505 »

Well, at least you won't have to do any balancing, and your AA would be about 50/50. Not much foreign stock in there, if that matters to you. If you want gradually reduce your stock allocation as you age, you could live off sales of the VBIAX first. You could do worse.
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Re: How to approximate Vanguard Balanced Index Fund Admiral Shares (VBIAX) with two other Vanguard funds?

Post by stemikger »

Christine_NM wrote: Fri Jun 16, 2017 6:08 pm nisi -

Balanced Index has never been a fund of funds.
That's what I thought also, but coming from Nisi, I figured I was wrong. lol.
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