Vanguard Balanced Funds

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Vanguard balanced funds - Vanguard Balanced Funds

Vanguard balanced funds may be the best mutual funds in the market today that don’t get the respect that they deserve.

Vanguard Balanced Funds

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Although millions of investors have taken advantage of the many benefits of Vanguard’s balanced funds, they’d arguably be some of the biggest funds in the world (by measure of assets under management) if only more investors knew of their boring but beautiful virtues.

Rather than spend time and unnecessary expenses on two or three mutual funds to meet an investment objective, why not buy one cheap, balanced fund that serves all of your needs?

Balanced funds can serve as a good standalone investment or as a solid core holding to build upon for a broadly diversified portfolio. And Vanguard balanced funds are among the best of their kind on the market today.

A Look at Vanguard’s Balanced Funds

Vanguard Balanced Index (MUTF:VBINX): This balanced fund from Vanguard offers low-cost, passively-managed approach to diversified investing. The asset allocation is approximately 60% stocks and 40% bonds, which makes VBINX a fine choice for investors with moderate risk tolerance. The equity side of the fund includes blue chips such as Apple Inc. (NASDAQ:AAPL), Alphabet Inc (NASDAQ:GOOGL) and Microsoft Corporation (NASDAQ:MSFT). The annualized return since its 1992 inception is an impressive 8%, which rivals that of most stock funds with riskier allocations. The expense ratio for VBINX is just 0.22%, or $22 for every $10,000 invested.

Vanguard Convertible Securities (MUTF:VCVSX): Vanguard’s VCVSX invests in convertible bonds, which are bonds that can be converted into stocks. This type of security can potentially provide investors optimal exposure to the upside of stocks while minimizing the downside with a fixed income feature. Investors buying shares of VCVSX are typically looking for a combination of income and long-term growth. Expenses for VCVSX are 0.34%.

Vanguard STAR (MUTF:VGSTX): This balanced fund from Vanguard is fund of fund, which means the underlying holdings are other mutual funds. The holdings for VGSTX include 11 Vanguard funds, diversified across several categories, including large-cap growth, large-cap value, intermediate-term bond, short-term bond, and international stock. With a minimum initial investment of just $1,000, the STAR fund is one of few Vanguard funds with minimums below $3,000. Expenses are 0.32%.

Vanguard Tax-Managed Balanced (MUTF:VTMFX): Vanguard’s VTMFX is a low-cost, passively-managed fund that balances growth and income with an allocation consisting of approximately 50% stocks and 50% bonds. The stocks are mid- and large-caps and the bonds are municipal bonds that are tax-free at the federal level, which makes VTMFX a smart choice for a taxable account. Expenses are a low 0.11% and the minimum initial purchase is $10,000.

Vanguard Wellesley Income (MUTF:VWINX): Investors looking for a low-cost conservative-allocation fund with an outstanding history of producing above-average returns will want to take a close look at Vanguard’s Wellesley fund. The asset allocation is solidly conservative with a mix of roughly one-third stocks and two-thirds bonds. With a 10-year annualized return above 6.5% and a return since inception (07-01-1970) of more than 9%, you get a conservative balanced fund that can outperform average stock funds. Expenses for VWINX are 0.22%.

Vanguard Wellington (MUTF:VWELX): At nearly 90 years old, the Wellington fund holds the dual distinction of being the first balanced fund and the oldest in the Vanguard lineup. VWELX is a moderate allocation fund with a blend of approximately two-thirds stocks and one-third bonds. The fund is broadly diversified with about 100 stock holdings and over 800 bonds. The expense ratio for VWELX is 0.25%.

Vanguard Managed Payout (MUTF:VPGDX): Investors looking for an actively-managed fund that aims to payout a consistent annual distribution rate that keeps pace with inflation will like what they find in VPGDX. The portfolio management team for the Managed Payout fund attempts to target a 4% annual distribution, paid on a monthly basis, by maintaining an allocation of underlying Vanguard funds to reach its target. Expenses for VPGDX are 0.38% and the minimum initial investment is $25,000.

As of this writing, Kent Thune did not personally hold a position in any of the aforementioned securities, although he holds VWINX in some client accounts. His No. 1 holding is his privately held investment advisory firm in Hilton Head Island, SC. Under no circumstances does this information represent a recommendation to buy or sell securities.


Article printed from InvestorPlace Media, https://investorplace.com/2017/08/vanguard-balanced-funds/.

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