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Vanguard Balanced Fund vs Separate

Posted: Wed Sep 13, 2017 11:34 am
by Element
Hi. First post here. Thanks for all the helpful info and knowledge!

These are the current funds I contribute to in my 401k:

Vanguard 500 Index VFIAX .04 fee
Vanguard Midcap VMGMX .07
Vanguard Interm-Term Bond VBILX .07
Vanguard Balanced Index VBIAX (60/40 split) .07

These are really the only low cost Vanguard funds in my option list other than Vanguard Explorer VEXRX .34, and Vanguard Growth Index VIGAX .06

My question is, Is there benefit to contributing to the Balanced fund at the same time while contributing to the other three? I'm currently contributing at a 80/20 split (25% towards the balanced fund, which comes out to 10% bonds) and 10% to the VBILX.

I've heard the balanced fund is essentially VTSAX and VBTLX together. So my reasoning is that the balanced fund diversifies more than the other options I have.

Is it worth it to keep contributing towards the balanced fund, or should I just split my contributions towards the other 3?

I'm 38 btw.

Thank you!

Re: Vanguard Balanced Fund vs Separate

Posted: Wed Sep 13, 2017 12:52 pm
by welderwannabe
I wouldn't bother with it. Just stick with the 3 funds if you don't mind rebalancing, or if they do it for you quarterly like some 401ks do.

A target date fund is never a bad thing too, although the ER could be higher depending on your plan.

Re: Vanguard Balanced Fund vs Separate

Posted: Wed Sep 13, 2017 1:47 pm
by chevca
I'd say the benefit would be minimal, if any. You're pretty well diversified with the S&P 500, mid-cap, and intermediate term bond fund. The extra you may get, or be hurt by from holding the balanced fund is barely going to move the needle. I wouldn't bother holding the balanced fund in your situation. Personally, I like the intermediate term bond index fund better than total bond anyway. So, I'd just use that.

Re: Vanguard Balanced Fund vs Separate

Posted: Wed Sep 13, 2017 1:55 pm
by dwickenh
chevca wrote:
Wed Sep 13, 2017 1:47 pm
I'd say the benefit would be minimal, if any. You're pretty well diversified with the S&P 500, mid-cap, and intermediate term bond fund. The extra you may get, or be hurt by from holding the balanced fund is barely going to move the needle. I wouldn't bother holding the balanced fund in your situation. Personally, I like the intermediate term bond index fund better than total bond anyway. So, I'd just use that.
I like both the intermediate term bond index and the Total bond index. Together, I think they make more sense than one or the other.

Re: Vanguard Balanced Fund vs Separate

Posted: Wed Sep 13, 2017 2:41 pm
by Element
Thanks for the replies. This too was my thought. I have decided to re-balance the acct to hold the three funds, and revisit it periodically. :sharebeer