Vanguard Funds Mutual Fund #1 — Vanguard 500 Index Fund Admiral Shares (VFIAX)
Allocation: 50% of Portfolio
YTD Performance: 1%
The goal here is to keep costs to a minimum while generally sticking to Buffett’s hypothesis when it comes to his wife’s investments.
In that case, it makes more sense for the S&P 500 investment to be a mutual fund rather than an ETF (although Vanguard Funds do offer commission-free ETFs) to avoid paying commissions on the largest segment of the portfolio. The Vanguard 500 Index Fund Admiral Shares (VFIAX) charge an annual expense ratio of just 0.05%.
Your fees would amount to a mere $12.50 on a $50,000 portfolio. That’s hard to beat, and Buffett knows it. The largest holdings in this fund include Apple (AAPL), Exxon Mobil (XOM) and Google (GOOG). Minimum investment is $10,000.