M* Tools vs Vanguard Portfolio Watch

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BeachPerson
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M* Tools vs Vanguard Portfolio Watch

Post by BeachPerson »

Since I am now a Voyager™ client, I found that I get the Vanguard Portfolio Watch tab now. It is a nice having the analysis. I like the ok, consider, and caution analysis that Vanguard gives. Since I own the T Rowe Price International Discovery Fund, I get Morningstar tools with my T Rowe Price account. Previously I would use that for my analysis.

Does anyone have a preference for which of these tools to use?

Thanks,
From Jack Brennan's "Straight Talk on Investing", page 23 "Living below your means is the ultimate financial strategy"
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mickeyd
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Post by mickeyd »

I use the Vanguard tools that are provided mostly because they are handy and most of my stuff is with VG. The investments not @ VG are listed and they are reflected in my account, so all is good. 8)
Part-Owner of Texas | | “The CMH-the Cost Matters Hypothesis -is all that is needed to explain why indexing must and will work… Yes, it is that simple.” John C. Bogle
livesoft
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Post by livesoft »

I use both since both make mistakes. I prefer the M* now after some convincing by folks on this forum and because one can get it free via troweprice. It's easy to put in a benchmark portfolio at M* and next to impossible at VG. The beauty of a couple of benchmark portfolios is that one can see if your portfolio of the same risk/reward/9-grid/value/growth/largecap/midcap/smallcap/domestic/international/emergingmarkets as a benchmark of DFA or VG funds exceeds the benchmarks. If it doesn't you are doing something wrong.
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diehards
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Post by diehards »

David

VG's Portfolio Watch does a very poor job analyzing non-VG funds.

I much prefer M* X-ray analysis.

The following is my Wife's Portfolio which has VG, Dodge & Cox, ETF, Pimco and American Funds:

VG's Portfolio Watch Style Box Analysis:

24.7---24----9.1
9.6-----0-----27.1
5.5-----0-----0

M* X-ray Style Box Analysis, same portfolio:

22----20-----27
7-----9------9
3-----2------2

Just looking at LC Growth, VG had one American Fund.
M* included 4 Funds to calculate LC Growth.

Good Luck, A Diehard :roll:
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grabiner
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Re: M* Tools vs Vanguard Portfolio Watch

Post by grabiner »

davidkw wrote:Since I am now a Voyager™ client, I found that I get the Vanguard Portfolio Watch tab now. It is a nice having the analysis. I like the ok, consider, and caution analysis that Vanguard gives. Since I own the T Rowe Price International Discovery Fund, I get Morningstar tools with my T Rowe Price account. Previously I would use that for my analysis.

Does anyone have a preference for which of these tools to use?

Thanks,
Vanguard doesn't get the style and capitalization categories right even for many of its own funds, putting an entire fund in one style box, and thus you can't really get an idea of your style breakdown from the Portfolio Watch.

Vanguard defines large-cap as the 200 largest stocks, mid-cap as numbers 201-1000, and small-cap as 1001 and smaller. Total Stock Market is properly categorized as 65% large-cap, 27% mid-cap, 8% small-cap, but Small-Cap Value Index is characterized as 100% mid-cap, and it's actually half mid-caps by this definition. REIT Index, which is mostly mid-caps, is characterized as 100% mid-cap.

Value/growth has the same problem. REIT Index is in the Morningstar mid-cap blend category now, so Vanguard considers it 100% blend, ignoring the value bias. I no longer hold Winsdor, but I suspect that Vanguard would consider Windsor to be 100% value (which is its objective) or 100% blend (which is its current style box); neither one is correct.

I haven't bothered to put my non-Vanguard investments in Portfolio Watch because my own spreadsheet (in which I break investments down by my own definition of style) gives me a better picture of my asset allocation.
sport
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Post by sport »

Vanguard Portfolio Watch also considers all domestic funds to be 100% domestic, regardless of the percentage of foreign holdings. In general, it treats most funds as a 100% lump of some kind, even if there are significant holdings in other areas. I find it essentially useless for determining my asset allocation.

Jeff
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SpringMan
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Post by SpringMan »

The style boxes of VG Portfolio Analysis tools are very suspect. It says I have 0 mid cap value and I own VBR and VNQ. I don't trust the developed country breakdown of the foreign stock either. It says I have -17% weight in Europe and I have some VEURX (Europe index) in addition to FSIIX (EAFE index). I do like the tab that gives the average expense ratio. The Portfolio Tester Tool is full of bugs which I have reported to Vanguard and they can't or refuse to fix them. Even the column headings are wrong between current and proposed portfolios. Vanguard says they recommend market weighting but they really don't. Global market weight of Foreign vs Domestic is about 50/50, I think anything over 20% foreign and VG throws up flags. Is not this over weighting domestic equity and under weighting foreign. Use these tools with a grain of salt.
Best,
Best Wishes, SpringMan
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