Vanguard Funds Wildcard — Vanguard Consumer Staples ETF (VDC)
Allocation: 10% of Portfolio
YTD Performance: -1%
On this final piece of the puzzle, I’m going defensive. The mutual fund version of the S&P 500 has less than 10% invested in consumer staples’ stocks. I mean to remedy that by putting the final 10% in the Vanguard Consumer Staples ETF (VDC), a collection of 109 household names including Procter & Gamble (PG) and Coca-Cola (KO).
Since its inception in 2004, VDC has had but one year of negative annual total returns, and that was in 2008 when it experienced a 17% decline — 20 percentage points better than the S&P 500. When the you-know-what hits the fan, you’ll be glad you own this particular low-cost ETF (with a 0.14% expense ratio) from Vanguard Funds.
Vanguard Funds — Bottom Line
If you invested $50,000 on March 19, 2011 in a portfolio of two equities — VFIAX and VGSH as Buffett recommends — you would have approximately $72,647 today. If you invested in these two Vanguard Funds along with the other three I’ve recommended in the percentage allocations suggested, you would have $73,689 — an additional $1,042.
It seems the “keep it simple” rule holds true, and Warren Buffett is the No. 1 follower.
As of this writing, Will Ashworth did not own a position in any of the aforementioned securities.