comparable ETF version of Vanguard Lifestrategy Growth fund (VASGX) and Life Strategy Moderate Growth Fund (VSMGX)

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Aw0k3n
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comparable ETF version of Vanguard Lifestrategy Growth fund (VASGX) and Life Strategy Moderate Growth Fund (VSMGX)

Post by Aw0k3n » Thu Jul 30, 2020 9:05 am

Is there a comparable or similar product offered by vanguard or any other institution? if one were to simplify their investing I would think of these as attractive options. Keep adding month after month to one of these based on risk tolerance. This is for a taxable account and edit: I do not have a vanguard account hence looking for an ETF option.
Thank you
Last edited by Aw0k3n on Thu Jul 30, 2020 9:19 am, edited 1 time in total.
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02nz
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Re: comparable ETF version of Vanguard Lifestrategy Growth fund (VASGX) and Life Strategy Moderate Growth Fund (VSMGX)

Post by 02nz » Thu Jul 30, 2020 9:08 am

The LifeStrategy funds do not have ETF equivalents. LifeStrategy funds (like Vanguard's target retirement date funds) are "funds of funds," meaning they consist of index mutual funds (Total Stock, Total Bond, etc.). It's unlikely we'll see ETF equivalents any time soon, if ever.

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Re: comparable ETF version of Vanguard Lifestrategy Growth fund (VASGX) and Life Strategy Moderate Growth Fund (VSMGX)

Post by Aw0k3n » Thu Jul 30, 2020 9:12 am

02nz wrote:
Thu Jul 30, 2020 9:08 am
The LifeStrategy funds do not have ETF equivalents. LifeStrategy funds (like Vanguard's target retirement date funds) are "funds of funds," meaning they consist of index mutual funds (Total Stock, Total Bond, etc.). It's unlikely we'll see ETF equivalents any time soon, if ever.
Thank you, is there anything that could come even close? just as there is VT (for all stocks), is there one where there are equities and bonds? like an ETF that is a mix of
VT and BNDW
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Re: comparable ETF version of Vanguard Lifestrategy Growth fund (VASGX) and Life Strategy Moderate Growth Fund (VSMGX)

Post by 02nz » Thu Jul 30, 2020 9:14 am

Aw0k3n wrote:
Thu Jul 30, 2020 9:12 am
02nz wrote:
Thu Jul 30, 2020 9:08 am
The LifeStrategy funds do not have ETF equivalents. LifeStrategy funds (like Vanguard's target retirement date funds) are "funds of funds," meaning they consist of index mutual funds (Total Stock, Total Bond, etc.). It's unlikely we'll see ETF equivalents any time soon, if ever.
Thank you, is there anything that could come even close? just as there is VT (for all stocks), is there one where there are equities and bonds?
I don't see any: https://investor.vanguard.com/etf/list# ... enses-fees

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Re: comparable ETF version of Vanguard Lifestrategy Growth fund (VASGX) and Life Strategy Moderate Growth Fund (VSMGX)

Post by 02nz » Thu Jul 30, 2020 9:16 am

Aw0k3n wrote:
Thu Jul 30, 2020 9:05 am
This is for a taxable account hence looking for an ETF option.
Vanguard's index mutual funds are as tax-efficient as ETFs, because of the patented share class structure. If a LifeStrategy ETF were available, it would not be more tax-efficient than the mutual fund.

(The standard recommendation here is not to place bond funds or LifeStrategy/target date funds containing bond funds in taxable, but that's a separate matter and doesn't matter as much now that bond yields are so low.)

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Re: comparable ETF version of Vanguard Lifestrategy Growth fund (VASGX) and Life Strategy Moderate Growth Fund (VSMGX)

Post by Aw0k3n » Thu Jul 30, 2020 9:18 am

02nz wrote:
Thu Jul 30, 2020 9:16 am
Aw0k3n wrote:
Thu Jul 30, 2020 9:05 am
This is for a taxable account hence looking for an ETF option.
Vanguard's index mutual funds are as tax-efficient as ETFs. If a LifeStrategy ETF were available, it would not be more tax-efficient than the mutual fund.
sorry..I should have mentioned in original post that I do not have a vanguard account. hence also another reason for looking at ETF
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Re: comparable ETF version of Vanguard Lifestrategy Growth fund (VASGX) and Life Strategy Moderate Growth Fund (VSMGX)

Post by nisiprius » Thu Jul 30, 2020 9:18 am

Probably not. Almost certainly not one following the four-fund allocation Vanguard uses in these funds (Total Stock, Total International Stock, Total Bond, Total International Bond) as Vanguard is currently the only firm I know that both offers a low-cost dollar-hedged international bond fund, recommends it, and uses it in its all-in-one funds.

There used to be some target-date glide-slope ETFs but I think they're all gone.

ADDED: But Vineviz's post, below, has a good answer. There are fixed-allocation balanced ETFs.

My suggestion is that you just invest in the four obvious Vanguard ETFs corresponding to the funds in the LifeStrategy Fund in the same percentages. For example, within its all-in-one funds currently, Vanguard divides stocks 60/40 between US/international, and bonds 70/30 between US/international. For LifeStrategy Moderate, that means

60% of 60% = 36% Total Stock = VTI
40% of 60% = 24% Total International = VXUS
70% of 40% = 28% Total Bond = BND
30% of 40% = 12% Total International Bond = BNDX

If you want something simpler, then, as you yourself noted,
60% Total World = VT
40% Total Bond = BNDW
which is slightly heavier in international stocks and bonds

Rebalance once a year. Contrary to the impression you might get from all of the obsession with rebalancing, these are not terribly volatile assets and are not going to drift very far from their target allocation in a single year.
Last edited by nisiprius on Thu Jul 30, 2020 11:52 am, edited 1 time in total.
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Re: comparable ETF version of Vanguard Lifestrategy Growth fund (VASGX) and Life Strategy Moderate Growth Fund (VSMGX)

Post by anon_investor » Thu Jul 30, 2020 9:21 am

02nz wrote:
Thu Jul 30, 2020 9:16 am
Aw0k3n wrote:
Thu Jul 30, 2020 9:05 am
This is for a taxable account hence looking for an ETF option.
Vanguard's index mutual funds are as tax-efficient as ETFs. If a LifeStrategy ETF were available, it would not be more tax-efficient than the mutual fund.
Actually only the index mutual funds with ETF share classes are as tax efficient as ETFs. The LifeStrategy mutual fund is not as tax efficient as an ETF because it does generate annual capital gains distributions. Therefore it would probably be tax efficient to just hold a mix of ETFs. Unfortuantely VT is not currently receiving the foreign tax credit because it has less than 50% in foreign equities. So it would likely be more tax efficient to hold VTI + VXUS instead of just VT. But then it would be less convenient and make rebalancing more complicated.

An alternative is the iShares Core Growth Allocation ETF: https://www.ishares.com/us/products/239 ... cation-etf
While it can be purchased comission free at Vanguard, its expense ratio is higher at 0.25%.

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Re: comparable ETF version of Vanguard Lifestrategy Growth fund (VASGX) and Life Strategy Moderate Growth Fund (VSMGX)

Post by 02nz » Thu Jul 30, 2020 9:22 am

Aw0k3n wrote:
Thu Jul 30, 2020 9:18 am
02nz wrote:
Thu Jul 30, 2020 9:16 am
Aw0k3n wrote:
Thu Jul 30, 2020 9:05 am
This is for a taxable account hence looking for an ETF option.
Vanguard's index mutual funds are as tax-efficient as ETFs. If a LifeStrategy ETF were available, it would not be more tax-efficient than the mutual fund.
sorry..I should have mentioned in original post that I do not have a vanguard account. hence also another reason for looking at ETF
Then maybe just use VT and BND, leaving out international bonds. You probably lose out on the foreign tax credit that you'd get holding VXUS separately.
Last edited by 02nz on Thu Jul 30, 2020 9:24 am, edited 1 time in total.

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Re: comparable ETF version of Vanguard Lifestrategy Growth fund (VASGX) and Life Strategy Moderate Growth Fund (VSMGX)

Post by anon_investor » Thu Jul 30, 2020 9:23 am

02nz wrote:
Thu Jul 30, 2020 9:22 am
Aw0k3n wrote:
Thu Jul 30, 2020 9:18 am
02nz wrote:
Thu Jul 30, 2020 9:16 am
Aw0k3n wrote:
Thu Jul 30, 2020 9:05 am
This is for a taxable account hence looking for an ETF option.
Vanguard's index mutual funds are as tax-efficient as ETFs. If a LifeStrategy ETF were available, it would not be more tax-efficient than the mutual fund.
sorry..I should have mentioned in original post that I do not have a vanguard account. hence also another reason for looking at ETF
Then maybe just use VT and BND, leaving out international bonds. You probably lose out on the foreign tax credit though.
OP, might as well just do a 3 fund portfolio... VTI + VXUS + BND.

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Re: comparable ETF version of Vanguard Lifestrategy Growth fund (VASGX) and Life Strategy Moderate Growth Fund (VSMGX)

Post by retiredjg » Thu Jul 30, 2020 9:45 am

Aw0k3n wrote:
Thu Jul 30, 2020 9:05 am
This is for a taxable account and edit: I do not have a vanguard account hence looking for an ETF option.
An all in one fund like LS Growth is not the best choice for a taxable account for a couple of reasons. First, the bond component is not very tax efficient. Second, you cannot sell just stocks or bonds, you have to sell both at the same time.

If you are in a higher tax bracket, you would want to use a tax-exempt bond fund anyway. LS Growth contains taxable bonds.

If you are in a very low tax bracket and always will be in a very low tax bracket, the convenience of the all in one fund might outweigh the downsides for some people.

Vanguard has at least one tax-managed balanced fund. That would solve the first problem except it is nowhere near 80% stock.

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Re: comparable ETF version of Vanguard Lifestrategy Growth fund (VASGX) and Life Strategy Moderate Growth Fund (VSMGX)

Post by vineviz » Thu Jul 30, 2020 10:28 am

Aw0k3n wrote:
Thu Jul 30, 2020 9:05 am
Is there a comparable or similar product offered by vanguard or any other institution? if one were to simplify their investing I would think of these as attractive options. Keep adding month after month to one of these based on risk tolerance. This is for a taxable account and edit: I do not have a vanguard account hence looking for an ETF option.
Thank you
iShares offers four ETFs that are very similar to Vanguard LifeStrategy funds:

iShares Core Aggressive Allocation ETF (AOA)
iShares Core Growth Allocation ETF (AOR)
iShares Core Moderate Allocation ETF (AOM)
iShares Core Conservative Allocation ETF (AOK)
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Re: comparable ETF version of Vanguard Lifestrategy Growth fund (VASGX) and Life Strategy Moderate Growth Fund (VSMGX)

Post by retiredjg » Thu Jul 30, 2020 10:39 am

vineviz wrote:
Thu Jul 30, 2020 10:28 am
Aw0k3n wrote:
Thu Jul 30, 2020 9:05 am
Is there a comparable or similar product offered by vanguard or any other institution? if one were to simplify their investing I would think of these as attractive options. Keep adding month after month to one of these based on risk tolerance. This is for a taxable account and edit: I do not have a vanguard account hence looking for an ETF option.
Thank you
iShares offers four ETFs that are very similar to Vanguard LifeStrategy funds:

iShares Core Aggressive Allocation ETF (AOA)
iShares Core Growth Allocation ETF (AOR)
iShares Core Moderate Allocation ETF (AOM)
iShares Core Conservative Allocation ETF (AOK)
This is exactly what you are looking for, but I'm going to suggest it may not be what you should buy.

These funds contain taxable bonds which will not be tax efficient in a taxable account. Also, when it is time to sell, for example to change your asset allocation, you have to sell both stocks and bonds at the same time. This could trigger unnecessary capital gains taxes.

In addition, these funds have a higher expense ratio than the LifeStrategy funds...I have no idea why. I cannot see any reason that this ETF all in one solution is a better choice than mutual fund version (unless it happens to be at the brokerage you want to use).

They certainly are not poison. :happy But you need to understand the downside of what you think you want.

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Re: comparable ETF version of Vanguard Lifestrategy Growth fund (VASGX) and Life Strategy Moderate Growth Fund (VSMGX)

Post by Aw0k3n » Thu Jul 30, 2020 4:40 pm

vineviz wrote:
Thu Jul 30, 2020 10:28 am
Aw0k3n wrote:
Thu Jul 30, 2020 9:05 am
Is there a comparable or similar product offered by vanguard or any other institution? if one were to simplify their investing I would think of these as attractive options. Keep adding month after month to one of these based on risk tolerance. This is for a taxable account and edit: I do not have a vanguard account hence looking for an ETF option.
Thank you
iShares offers four ETFs that are very similar to Vanguard LifeStrategy funds:

iShares Core Aggressive Allocation ETF (AOA)
iShares Core Growth Allocation ETF (AOR)
iShares Core Moderate Allocation ETF (AOM)
iShares Core Conservative Allocation ETF (AOK)
A.w.e.s.o.m.e
Looking for something like this. Thanks, will look into those as well along with other suggestions
Tat tvam asi (thou art that)

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Aw0k3n
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Re: comparable ETF version of Vanguard Lifestrategy Growth fund (VASGX) and Life Strategy Moderate Growth Fund (VSMGX)

Post by Aw0k3n » Thu Jul 30, 2020 4:42 pm

retiredjg wrote:
Thu Jul 30, 2020 10:39 am
vineviz wrote:
Thu Jul 30, 2020 10:28 am
Aw0k3n wrote:
Thu Jul 30, 2020 9:05 am
Is there a comparable or similar product offered by vanguard or any other institution? if one were to simplify their investing I would think of these as attractive options. Keep adding month after month to one of these based on risk tolerance. This is for a taxable account and edit: I do not have a vanguard account hence looking for an ETF option.
Thank you
iShares offers four ETFs that are very similar to Vanguard LifeStrategy funds:

iShares Core Aggressive Allocation ETF (AOA)
iShares Core Growth Allocation ETF (AOR)
iShares Core Moderate Allocation ETF (AOM)
iShares Core Conservative Allocation ETF (AOK)
This is exactly what you are looking for, but I'm going to suggest it may not be what you should buy.

These funds contain taxable bonds which will not be tax efficient in a taxable account. Also, when it is time to sell, for example to change your asset allocation, you have to sell both stocks and bonds at the same time. This could trigger unnecessary capital gains taxes.

In addition, these funds have a higher expense ratio than the LifeStrategy funds...I have no idea why. I cannot see any reason that this ETF all in one solution is a better choice than mutual fund version (unless it happens to be at the brokerage you want to use).

They certainly are not poison. :happy But you need to understand the downside of what you think you want.
Thank you at fee of 0.25%, this does seem steep compared to the other ETFs discussed above, but does this seem convenient or what. Thanks
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Re: comparable ETF version of Vanguard Lifestrategy Growth fund (VASGX) and Life Strategy Moderate Growth Fund (VSMGX)

Post by nisiprius » Fri Jul 31, 2020 3:00 pm

For those curious, I did some spreadsheet work to see just how much drift would actually have occurred over a single year in four-fund LifeStrategy-like portfolios, if rebalanced annually.

The results are here.
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Re: comparable ETF version of Vanguard Lifestrategy Growth fund (VASGX) and Life Strategy Moderate Growth Fund (VSMGX)

Post by bck63 » Fri Jul 31, 2020 7:05 pm

02nz wrote:
Thu Jul 30, 2020 9:08 am
The LifeStrategy funds do not have ETF equivalents.
Yes they do. OP can consider one of the asset allocation ETFs offered by iShares.

They offer conservative, moderate, growth and aggressive ETFs -- AOK, AOM, AOR, and AOA.

I own AOK.

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Re: comparable ETF version of Vanguard Lifestrategy Growth fund (VASGX) and Life Strategy Moderate Growth Fund (VSMGX)

Post by 02nz » Fri Jul 31, 2020 7:15 pm

bck63 wrote:
Fri Jul 31, 2020 7:05 pm
02nz wrote:
Thu Jul 30, 2020 9:08 am
The LifeStrategy funds do not have ETF equivalents.
Yes they do. OP can consider one of the asset allocation ETFs offered by iShares.

They offer conservative, moderate, growth and aggressive ETFs -- AOK, AOM, AOR, and AOA.

I own AOK.
I meant in the sense that VTI is the ETF equivalent of VTSAX. Yes the iShares ETFs are similar, but they do cost a bit more (around 0.3 vs 0.14% for LifeStrategy, although apparently BlackRock has a fee waiver right now that brings it to 0.25%).

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Re: comparable ETF version of Vanguard Lifestrategy Growth fund (VASGX) and Life Strategy Moderate Growth Fund (VSMGX)

Post by Explorer » Fri Jul 31, 2020 7:29 pm

02nz wrote:
Fri Jul 31, 2020 7:15 pm
bck63 wrote:
Fri Jul 31, 2020 7:05 pm
02nz wrote:
Thu Jul 30, 2020 9:08 am
The LifeStrategy funds do not have ETF equivalents.
Yes they do. OP can consider one of the asset allocation ETFs offered by iShares.

They offer conservative, moderate, growth and aggressive ETFs -- AOK, AOM, AOR, and AOA.

I own AOK.
I meant in the sense that VTI is the ETF equivalent of VTSAX. Yes the iShares ETFs are similar, but they do cost a bit more (around 0.3 vs 0.14% for LifeStrategy, although apparently BlackRock has a fee waiver right now that brings it to 0.25%).
The main issue I have with iShares allocation ETFs is (while they are convenient), their asset size is still hovering around $1B (some more and some less than a billion). If you look at VG lifestrategy funds they have much larger asset base. Secondly, the bid/ask spread for these allocation ETFs is not trivial - you end up paying quite a bit more to acquire them. I know folks want portability and ability to trade during the day (in general) but for allocation funds I am not sure intraday liquidity is that critical.

I personally do not understand why one would not open a VG account and buy the mutual fund version which always trades at NAV at 4pm ET every day the market is open.

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Re: comparable ETF version of Vanguard Lifestrategy Growth fund (VASGX) and Life Strategy Moderate Growth Fund (VSMGX)

Post by bck63 » Fri Jul 31, 2020 7:37 pm

02nz wrote:
Fri Jul 31, 2020 7:15 pm
bck63 wrote:
Fri Jul 31, 2020 7:05 pm
02nz wrote:
Thu Jul 30, 2020 9:08 am
The LifeStrategy funds do not have ETF equivalents.
Yes they do. OP can consider one of the asset allocation ETFs offered by iShares.

They offer conservative, moderate, growth and aggressive ETFs -- AOK, AOM, AOR, and AOA.

I own AOK.
I meant in the sense that VTI is the ETF equivalent of VTSAX. Yes the iShares ETFs are similar, but they do cost a bit more (around 0.3 vs 0.14% for LifeStrategy, although apparently BlackRock has a fee waiver right now that brings it to 0.25%).
Ahh, understood. Apologies.

Speaking of the iShares funds and the LifeStrategy funds, I compared AOK (the conservative ETF, which I own at Fidelity) and VASIX (the LifeStrategy Income Fund, which I own at Vanguard). AOK is 30% stocks, VASIX is 20% stocks. But VASIX consistently outperforms AOK, even with 10% fewer stocks.

I am only recently at Fidelity because my new 401k is there and I use their cash management account. But I am increasingly convinced that Vanguard is unbeatable on many levels

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Re: comparable ETF version of Vanguard Lifestrategy Growth fund (VASGX) and Life Strategy Moderate Growth Fund (VSMGX)

Post by 02nz » Fri Jul 31, 2020 7:52 pm

bck63 wrote:
Fri Jul 31, 2020 7:37 pm
02nz wrote:
Fri Jul 31, 2020 7:15 pm
bck63 wrote:
Fri Jul 31, 2020 7:05 pm
02nz wrote:
Thu Jul 30, 2020 9:08 am
The LifeStrategy funds do not have ETF equivalents.
Yes they do. OP can consider one of the asset allocation ETFs offered by iShares.

They offer conservative, moderate, growth and aggressive ETFs -- AOK, AOM, AOR, and AOA.

I own AOK.
I meant in the sense that VTI is the ETF equivalent of VTSAX. Yes the iShares ETFs are similar, but they do cost a bit more (around 0.3 vs 0.14% for LifeStrategy, although apparently BlackRock has a fee waiver right now that brings it to 0.25%).
Ahh, understood. Apologies.

Speaking of the iShares funds and the LifeStrategy funds, I compared AOK (the conservative ETF, which I own at Fidelity) and VASIX (the LifeStrategy Income Fund, which I own at Vanguard). AOK is 30% stocks, VASIX is 20% stocks. But VASIX consistently outperforms AOK, even with 10% fewer stocks.

I am only recently at Fidelity because my new 401k is there and I use their cash management account. But I am increasingly convinced that Vanguard is unbeatable on many levels
I suppose if you wanted something with 30% stocks, Vanguard's Target Retirement Income Fund (VTINX) would be a good choice. It's a LifeStrategy fund in all but name since, unlike the target retirement funds with a year in their name, it has no glidepath (it's the endpoint of the glidepath).

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