Vanguard balanced funds

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
Mario2222
Posts: 64
Joined: Mon Dec 24, 2018 12:16 am

Vanguard balanced funds

Post by Mario2222 »

My wife wants to invest her Roth IRA in a 1 or 2 funds portfolio. She doesn't like the high percentage of the international stocks in the TDFs and the international bonds. She is thinking to add international index fund to VBIAX. She is 39 years old. Any recommendations? Thanks.
User avatar
arcticpineapplecorp.
Posts: 6470
Joined: Tue Mar 06, 2012 9:22 pm

Re: Vanguard balanced funds

Post by arcticpineapplecorp. »

what percentage of international is she looking to add (out of her total stock allocation)?
what overall allocation is she looking for?

The balanced index is 60% stock and 40% bond which could be high percentage of bond for a 39 year old (or not depending on other factors not mentioned like her risk tolerance, need to take risk, ability to take risk and so on).

Adding international stock to the mix will then decrease the amount in bonds, but she'll have to rebalance periodically between the two funds as her stock/bond allocation becomes different than she originally intended. And she may want a different risk amount as she gets older, in which case she'll have to rebalance out of stocks and into bonds as well.

is she aware of those additional steps she'll have to take and how to figure her overall stock/bond allocation among the two funds both now and into the future?

otherwise, nothing wrong with this, she just needs to understand how to build her allocation of stocks/bonds and US/International between the two funds.
It's "Stay" the course, not Stray the Course. Buy and Hold works. You should really try it sometime. Get a plan: www.bogleheads.org/wiki/Investment_policy_statement
User avatar
ruralavalon
Posts: 19712
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: Vanguard balanced funds

Post by ruralavalon »

Mario2222 wrote: Sat Sep 12, 2020 10:36 am My wife wants to invest her Roth IRA in a 1 or 2 funds portfolio. She doesn't like the high percentage of the international stocks in the TDFs and the international bonds. She is thinking to add international index fund to VBIAX. She is 39 years old. Any recommendations? Thanks.
What percentage of stocks in international stocks does she wish to have?

A three-fund portfolio might be easier to manage.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started
UpperNwGuy
Posts: 4330
Joined: Sun Oct 08, 2017 7:16 pm

Re: Vanguard balanced funds

Post by UpperNwGuy »

I wish Vanguard offered a set of balanced funds that allowed a choice between various percentages of international in the stock portion. The current funds have a market weight split, which is about 55/45 between US and international. I wish they would also open a fund with a 70/30 split and one with an 80/20 split.
User avatar
ruralavalon
Posts: 19712
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: Vanguard balanced funds

Post by ruralavalon »

UpperNwGuy wrote: Sat Sep 12, 2020 11:39 am I wish Vanguard offered a set of balanced funds that allowed a choice between various percentages of international in the stock portion. The current funds have a market weight split, which is about 55/45 between US and international. I wish they would also open a fund with a 70/30 split and one with an 80/20 split.
I also want them to create a balanced fund especially for me :wink:
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started
livesoft
Posts: 73523
Joined: Thu Mar 01, 2007 8:00 pm

Re: Vanguard balanced funds

Post by livesoft »

Mario2222 wrote: Sat Sep 12, 2020 10:36 am My wife wants to invest her Roth IRA in a 1 or 2 funds portfolio. She doesn't like the high percentage of the international stocks in the TDFs and the international bonds. She is thinking to add international index fund to VBIAX. She is 39 years old. Any recommendations? Thanks.
Nothing wrong at all with what she is thinking. I recommend she just does it.

Basically, there are an infinite number of ways to put index funds together and most of them will be similar enough that one will not be able to predict which one will end up doing better (whatever "better" means) in the near-, intermediate-, nor long-term.
Wiki This signature message sponsored by sscritic: Learn to fish.
ruud
Posts: 320
Joined: Sat Mar 03, 2007 1:28 pm
Location: san francisco bay area

Re: Vanguard balanced funds

Post by ruud »

UpperNwGuy wrote: Sat Sep 12, 2020 11:39 am I wish Vanguard offered a set of balanced funds that allowed a choice between various percentages of international in the stock portion. The current funds have a market weight split, which is about 55/45 between US and international. I wish they would also open a fund with a 70/30 split and one with an 80/20 split.
The Vanguard Target Date and LifeStrategy funds all use a fixed ratio of 40% of equities and 30% of fixed income in international.
.
Beehave
Posts: 843
Joined: Mon Jun 19, 2017 12:46 pm

Re: Vanguard balanced funds

Post by Beehave »

The Vanguard Balanced Index fund is 60/40 US total stock market index and 40% US bond index.
The Vanguard Total World Index is 60% US total stock index and 40% total international stock index.

A 50-50 investment in the 2 funds yields a very low fee 60% US stock index, 20% US bond index, 20% total international stock index mix.

Obviously, you can play with the relative percentages of the 2 funds to achieve different mixes. For example, a 60-40 ratio of Balanced to Total World Indexes yields an overall:

60% US Total Stock Index
24% Total US Bond Index
16% Total International Stock Index.

Perhaps you can use these two funds to find an overall ratio of components that suits risk tolerance and objectives with low fees and very broad coverage.

Best wishes.
Topic Author
Mario2222
Posts: 64
Joined: Mon Dec 24, 2018 12:16 am

Re: Vanguard balanced funds

Post by Mario2222 »

She wants no more than 20% in international stocks. She likes the 80/20 allocation.
UpperNwGuy
Posts: 4330
Joined: Sun Oct 08, 2017 7:16 pm

Re: Vanguard balanced funds

Post by UpperNwGuy »

ruud wrote: Sat Sep 12, 2020 12:24 pm
UpperNwGuy wrote: Sat Sep 12, 2020 11:39 am I wish Vanguard offered a set of balanced funds that allowed a choice between various percentages of international in the stock portion. The current funds have a market weight split, which is about 55/45 between US and international. I wish they would also open a fund with a 70/30 split and one with an 80/20 split.
The Vanguard Target Date and LifeStrategy funds all use a fixed ratio of 40% of equities and 30% of fixed income in international.
That's my point. I wish Vanguard provided other choices than just market weight (Total World) or 40% (Target Date, Life Strategy). I'd like to see them offer a US/ex-US blended fund that is 33%, 30%, 25%, or 20% international in addition to what they offer now. I'd settle for even one or two of those possibilities. (I'm only discussing equities. Not sure why you mentioned fixed income.)
Last edited by UpperNwGuy on Sat Sep 12, 2020 2:08 pm, edited 1 time in total.
User avatar
arcticpineapplecorp.
Posts: 6470
Joined: Tue Mar 06, 2012 9:22 pm

Re: Vanguard balanced funds

Post by arcticpineapplecorp. »

Mario2222 wrote: Sat Sep 12, 2020 2:05 pm She wants no more than 20% in international stocks. She likes the 80/20 allocation.
sounds like beehave's suggestion for "A 50-50 investment in the 2 funds (total world stock index fund and balanced index fund) yields a very low fee 60% US stock index, 20% US bond index, 20% total international stock index mix" accomplishes your goal.

(technically, unless my math is off, doing the above, she'd have 26.875% international of her total stock portion (not 20%) because US makes up 57% of total world, source: https://investor.vanguard.com/mutual-fu ... olio/vtwax). But that's close enough without making this more complicated than it needs to be.
It's "Stay" the course, not Stray the Course. Buy and Hold works. You should really try it sometime. Get a plan: www.bogleheads.org/wiki/Investment_policy_statement
dru808
Posts: 1066
Joined: Sat Oct 15, 2011 2:42 pm
Location: mid pac

Re: Vanguard balanced funds

Post by dru808 »

UpperNwGuy wrote: Sat Sep 12, 2020 11:39 am I wish Vanguard offered a set of balanced funds that allowed a choice between various percentages of international in the stock portion. The current funds have a market weight split, which is about 55/45 between US and international. I wish they would also open a fund with a 70/30 split and one with an 80/20 split.
Build your own with vanguard funds at m1.
65% US equity | 25% INTL equity | 10% US long bonds
User avatar
tennisplyr
Posts: 2718
Joined: Tue Jan 28, 2014 1:53 pm
Location: Sarasota, FL

Re: Vanguard balanced funds

Post by tennisplyr »

While it may not be a 3 fund play, why not build your own portfolio based on several Vanguard (or other) index funds.
Those who move forward with a happy spirit will find that things always work out.
tibbitts
Posts: 12276
Joined: Tue Feb 27, 2007 6:50 pm

Re: Vanguard balanced funds

Post by tibbitts »

Mario2222 wrote: Sat Sep 12, 2020 10:36 am My wife wants to invest her Roth IRA in a 1 or 2 funds portfolio. She doesn't like the high percentage of the international stocks in the TDFs and the international bonds. She is thinking to add international index fund to VBIAX. She is 39 years old. Any recommendations? Thanks.
If someone is sophisticated(?) enough to not want Vanguards' recommended percentage of this or that, then they are sophisticated enough to invest in multiple funds.
Imbros
Posts: 204
Joined: Mon Jan 23, 2012 11:41 pm
Location: Wisconsin

Re: Vanguard balanced funds

Post by Imbros »

Mario2222 wrote: Sat Sep 12, 2020 10:36 am My wife wants to invest her Roth IRA in a 1 or 2 funds portfolio. She doesn't like the high percentage of the international stocks in the TDFs and the international bonds. She is thinking to add international index fund to VBIAX. She is 39 years old. Any recommendations? Thanks.
FFNOX (Fidelity Four in One)

60% US Equities
25% International Equities (ex Emerging)
15% US Bonds

Aggressive enough, yet does not have International Bonds and Emerging Equities. It re-balances itself and has 0.11 Expense Ratio.
There is no greatness where there is no simplicity, goodness and truth. -L. Tolstoy
saagar_is_cool
Posts: 220
Joined: Thu Jan 30, 2014 2:21 pm

Re: Vanguard balanced funds

Post by saagar_is_cool »

Beehave wrote: Sat Sep 12, 2020 12:36 pm The Vanguard Balanced Index fund is 60/40 US total stock market index and 40% US bond index.
The Vanguard Total World Index is 60% US total stock index and 40% total international stock index.

A 50-50 investment in the 2 funds yields a very low fee 60% US stock index, 20% US bond index, 20% total international stock index mix.

Obviously, you can play with the relative percentages of the 2 funds to achieve different mixes. For example, a 60-40 ratio of Balanced to Total World Indexes yields an overall:

60% US Total Stock Index
24% Total US Bond Index
16% Total International Stock Index.

Perhaps you can use these two funds to find an overall ratio of components that suits risk tolerance and objectives with low fees and very broad coverage.

Best wishes.
I think the first fund you reference is VBIAX. What is the second fund. Is the second one - VTWSX ?
sycamore
Posts: 1336
Joined: Tue May 08, 2018 12:06 pm

Re: Vanguard balanced funds

Post by sycamore »

saagar_is_cool wrote: Sun Sep 13, 2020 3:36 pm
Beehave wrote: Sat Sep 12, 2020 12:36 pm The Vanguard Balanced Index fund is 60/40 US total stock market index and 40% US bond index.
The Vanguard Total World Index is 60% US total stock index and 40% total international stock index.

A 50-50 investment in the 2 funds yields a very low fee 60% US stock index, 20% US bond index, 20% total international stock index mix.

Obviously, you can play with the relative percentages of the 2 funds to achieve different mixes. For example, a 60-40 ratio of Balanced to Total World Indexes yields an overall:

60% US Total Stock Index
24% Total US Bond Index
16% Total International Stock Index.

Perhaps you can use these two funds to find an overall ratio of components that suits risk tolerance and objectives with low fees and very broad coverage.

Best wishes.
I think the first fund you reference is VBIAX. What is the second fund. Is the second one - VTWSX ?
It's VTWAX which is the "Admirial" share class. https://investor.vanguard.com/mutual-fu ... view/vtwax

VTWSX is the "Investor" share class of the same fund but is now closed to investors (back in 2018, Vanguard lowered the minimum purchase amount for Admiral shares to match that of Investor, and closed the Investor class)
User avatar
willthrill81
Posts: 21433
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: Vanguard balanced funds

Post by willthrill81 »

Vanguard's Wellington fund is 65% stock and 35% bonds, all U.S. That could fit the bill nicely.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
User avatar
abuss368
Posts: 22153
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!
Contact:

Re: Vanguard balanced funds

Post by abuss368 »

Mario2222 wrote: Sat Sep 12, 2020 10:36 am My wife wants to invest her Roth IRA in a 1 or 2 funds portfolio. She doesn't like the high percentage of the international stocks in the TDFs and the international bonds. She is thinking to add international index fund to VBIAX. She is 39 years old. Any recommendations? Thanks.
I think the Balanced Index fund is an excellent choice. Jack Bogle has written in many of his books that this one fund would serve the needs of most investors.
John C. Bogle: “Simplicity is the master key to financial success."
User avatar
abuss368
Posts: 22153
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!
Contact:

Re: Vanguard balanced funds

Post by abuss368 »

willthrill81 wrote: Sun Sep 13, 2020 4:23 pm Vanguard's Wellington fund is 65% stock and 35% bonds, all U.S. That could fit the bill nicely.
That is a good active fund.
John C. Bogle: “Simplicity is the master key to financial success."
000
Posts: 3294
Joined: Thu Jul 23, 2020 12:04 am

Re: Vanguard balanced funds

Post by 000 »

If someone thinks they can create a better allocation than Vanguard, why not... just... do... it?

Just pick separate funds and keep contributing at the fixed percentages one desires.

An automatic contribution can be setup to contribute different percentages to different funds.
UpperNwGuy
Posts: 4330
Joined: Sun Oct 08, 2017 7:16 pm

Re: Vanguard balanced funds

Post by UpperNwGuy »

dru808 wrote: Sat Sep 12, 2020 8:03 pm
UpperNwGuy wrote: Sat Sep 12, 2020 11:39 am I wish Vanguard offered a set of balanced funds that allowed a choice between various percentages of international in the stock portion. The current funds have a market weight split, which is about 55/45 between US and international. I wish they would also open a fund with a 70/30 split and one with an 80/20 split.
Build your own with vanguard funds at m1.
I build my own with Vanguard funds at Vanguard.
dru808
Posts: 1066
Joined: Sat Oct 15, 2011 2:42 pm
Location: mid pac

Re: Vanguard balanced funds

Post by dru808 »

UpperNwGuy wrote: Sun Sep 13, 2020 8:28 pm
dru808 wrote: Sat Sep 12, 2020 8:03 pm
UpperNwGuy wrote: Sat Sep 12, 2020 11:39 am I wish Vanguard offered a set of balanced funds that allowed a choice between various percentages of international in the stock portion. The current funds have a market weight split, which is about 55/45 between US and international. I wish they would also open a fund with a 70/30 split and one with an 80/20 split.
Build your own with vanguard funds at m1.
I build my own with Vanguard funds at Vanguard.
Sure, but you wish they offered a way to set your us/int allocations. M1 allows you to do this with the click of a button and not have to monitor your allocation. I’d say, “you don’t do that at vanguard” :sharebeer
65% US equity | 25% INTL equity | 10% US long bonds
UpperNwGuy
Posts: 4330
Joined: Sun Oct 08, 2017 7:16 pm

Re: Vanguard balanced funds

Post by UpperNwGuy »

dru808 wrote: Sun Sep 13, 2020 8:40 pm
UpperNwGuy wrote: Sun Sep 13, 2020 8:28 pm
dru808 wrote: Sat Sep 12, 2020 8:03 pm
UpperNwGuy wrote: Sat Sep 12, 2020 11:39 am I wish Vanguard offered a set of balanced funds that allowed a choice between various percentages of international in the stock portion. The current funds have a market weight split, which is about 55/45 between US and international. I wish they would also open a fund with a 70/30 split and one with an 80/20 split.
Build your own with vanguard funds at m1.
I build my own with Vanguard funds at Vanguard.
Sure, but you wish they offered a way to set your us/int allocations. M1 allows you to do this with the click of a button and not have to monitor your allocation. I’d say, “you don’t do that at vanguard” :sharebeer
I have accounts at three brokerages already. I don't need a fourth, so no M1 for me. And, to be honest, I don't care that much about this issue to take any action.
User avatar
arcticpineapplecorp.
Posts: 6470
Joined: Tue Mar 06, 2012 9:22 pm

Re: Vanguard balanced funds

Post by arcticpineapplecorp. »

Imbros wrote: Sun Sep 13, 2020 8:34 am
Mario2222 wrote: Sat Sep 12, 2020 10:36 am My wife wants to invest her Roth IRA in a 1 or 2 funds portfolio. She doesn't like the high percentage of the international stocks in the TDFs and the international bonds. She is thinking to add international index fund to VBIAX. She is 39 years old. Any recommendations? Thanks.
FFNOX (Fidelity Four in One)

60% US Equities
25% International Equities (ex Emerging)
15% US Bonds

Aggressive enough, yet does not have International Bonds and Emerging Equities. It re-balances itself and has 0.11 Expense Ratio.
that's interesting. wasn't aware of that one. thanks.
It's "Stay" the course, not Stray the Course. Buy and Hold works. You should really try it sometime. Get a plan: www.bogleheads.org/wiki/Investment_policy_statement
User avatar
vineviz
Posts: 8050
Joined: Tue May 15, 2018 1:55 pm

Re: Vanguard balanced funds

Post by vineviz »

tibbitts wrote: Sun Sep 13, 2020 8:29 am
Mario2222 wrote: Sat Sep 12, 2020 10:36 am My wife wants to invest her Roth IRA in a 1 or 2 funds portfolio. She doesn't like the high percentage of the international stocks in the TDFs and the international bonds. She is thinking to add international index fund to VBIAX. She is 39 years old. Any recommendations? Thanks.
If someone is sophisticated(?) enough to not want Vanguards' recommended percentage of this or that, then they are sophisticated enough to invest in multiple funds.
If an investor isn’t “sophisticated“ enough to understand the value of diversification, I’d argue that investing in multiple funds will likely do more harm than good.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch
ruud
Posts: 320
Joined: Sat Mar 03, 2007 1:28 pm
Location: san francisco bay area

Re: Vanguard balanced funds

Post by ruud »

UpperNwGuy wrote: Sat Sep 12, 2020 2:06 pm
ruud wrote: Sat Sep 12, 2020 12:24 pm
UpperNwGuy wrote: Sat Sep 12, 2020 11:39 am I wish Vanguard ...
The Vanguard Target Date and LifeStrategy funds all use a fixed ratio ...
That's my point. I wish Vanguard provided other choices than just market weight (Total World) or 40% (Target Date, Life Strategy).
Oops, sorry, I misread your post and missed the part about "I wish".
.
Post Reply