|Expense Ratio (net)||0.04%|
|Last Cap Gain||0.00|
|Morningstar Risk Rating||Above Average|
|Beta (5Y Monthly)||1.04|
|5y Average Return||N/A|
|Average for Category||N/A|
|Inception Date||Nov 13, 2000|
‘The FIRE lifestyle prepares one for situations like COVID, in that we are already living within our means and have no debt.’
When building a retirement portfolio, the goal is to grow your assets for the long term. Since no one knows which asset classes will lead and which will lag, diversification is paramount. And Vanguard ETFs are an easy way to get some diversification.If you're further than 10 years from retirement, it's wise to lean towards a more aggressive portfolio to capture the higher equity returns. As retirement approaches, dial back equities and increase fixed and cash equivalent holdings.If you're healthy and retire in your 60's you might have an additional 20-plus years in retirement, so don't forgo the stock market. In fact, you may want to ramp up equity investing as your retirement advances. This reverse glidepath strategy was suggested by Michael Kitces and Wade Pfau in an article on the Nerd's Eye View entitled, "Should Equity Exposure Decrease In Retirement, Or Is A Rising Equity Glidepath Actually Better?"InvestorPlace - Stock Market News, Stock Advice & Trading TipsThese three Vanguard exchange-traded funds will work when building a retirement portfolio as well as during the drawdown years. Each of the Vanguard funds can be purchased through any investment account, while other financial firms offer comparable funds. The key to this simple retirement portfolio is to invest in low-fee index ETFs that fit within these categories. * 7 A-Rated Growth Stocks That Are Loaded With Long-Term Potential The rationale for a three-fund retirement portfolio is as follows. First, a simple investment portfolio in retirement leaves time for what matters most. Second, it provides diversification to minimize losses in a particular sector while maintaining broad exposure to the main asset classes and global markets. And finally, it cuts investment fees to the bone. * Vanguard Total Stock Market ETF (NYSEARCA:VTI) * Vanguard FTSE All-World ex-US ETF (NYSEARCA:VEU) * Vanguard Total Bond Market ETF (NASDAQ:BND)And now, let's get further into why I like these three funds in particular. Best Vanguard ETFs: Vanguard Total Stock Market ETF (VTI)Expense Ratio: 0.03%, or $3 per $10,000 invested annually.This U.S. stock market fund tracks the performance of the CRSP US Total Market Index. The benchmark includes companies spanning the mega-, large-, small- and micro-capitalization field and represents nearly 100% of the U.S. investable equity market.The fund utilizes a passively managed, index-sampling strategy. VTI offers rock-bottom expenses and minimal tracking error versus the benchmark index. This total stock market fund owns roughly 3,500 stocks, with 22.6% of the assets in the 10 largest names.The fund uses a market cap weighting, which means that returns will be influenced by the momentum growth of the biggest firms.Investors seeking a more value-leaning equal weight US stock index fund might consider the Invesco S&P 500 Equal Weight ETF (NYSEARCA:RSP).The funds sector weightings approximate the benchmark index, with approximately 25% in the technology sector, 17% in financials, 15% in healthcare and 14% in consumer services.The largest holdings read like a who's-who in American commerce and include Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN).The returns of the fund parallel those of the index with a 10-year average annual return of 12.8%, and one-, three- and five-year returns of 11.5%, 9.6%, and 9.2% respectively.Investing in the U.S. equity market has been a sound investment strategy for decades, and the 0.03% expense ratio is among the most affordable ways of capturing this growth. The current 1.8% 30-day SEC yield is higher than investors receive on most short-term cash equivalents. Vanguard FTSE All-World ex-US ETF (VEU)Expense Ratio: 0.08%This large-cap-leaning international fund invests in developing and emerging market global companies. The passively managed fund attempts to match the returns of the FTSE All World ex-U.S. index. Investors willing to take a bit more risk for potentially higher returns among Vanguard ETFs might consider the Vanguard Total Stock International Index ETF (NASDAQ:VXUS) instead, which includes greater small-cap international exposure.Like VTI, the VEU's holdings are weighted by market cap, so the larger companies are a greater proportion of the fund. The allocation is geographically diversified, with 41% invested in Europe, 23% in in Emerging Markets, 29% in the Pacific and the remaining firms from North America and the Middle East.The top holdings are well-known global names. Although, the top 10 holdings make up only 11.5% of the total fund assets. The largest holdings include Alibaba (NYSE:BABA), Nestle (OTCMKTS:NSRGY) and Tencent Holdings (OTCMKTS:TCEHY). Other major companies are representatives of the auto, pharmaceutical, electronic and oil industries. * 10 Robotics Stocks on the Technological Cutting Edge The fund's 0.08% expense ratio keeps most investment dollars in the markets, not flowing to the fund manager. Recently, international markets have underperformed the U.S., but seem to be turning around this year. Vanguard Total Bond Market ETF (BND)Expense Ratio: 0.035%A total bond market fund rounds out this three-piece retirement portfolio of Vanguard ETFs. Bonds are still valuable to own as eventually; interest rates will rise along with bond yields.Another Vanguard low-fee offer, BND is an intermediate bond fund with the objective to track a broad, market-weight bond index. Included in the fund are taxable investment-grade U.S. bonds. With 9,568 bonds and an average duration of 6.4 years, the current SEC yield is 1.4%.The fund is heavily weighted to U.S. Government bonds, with 61% in this asset class. The next-highest weighting of 19% is in Baa rated bonds. And 12.6% of the fund is invested in A bonds with a small percent allocated to Aaa and Aa rated bonds. The 0.035% expense ratio is negligible.In summation, create your asset allocation to fit your comfort with investment volatility. Allot greater percentages to the stock market if you're younger and more comfortable with risk. If not, bulk up your bond investment.Retirees should consider their short and intermediate cash flow needs and invest accordingly. Meanwhile, it's prudent to keep at least one year's living expenses in a high yield cash account.Barbara A. Friedberg, MBA, MS is a veteran portfolio manager, expert investor, and former university finance instructor. She is editor/author of Personal Finance; An Encyclopedia of Modern Money Management and two additional money books. She is CEO of Robo-Advisor Pros.com, a robo-advisor review and information website. Additionally, Friedberg is publisher of the well-regarded investment website Barbara Friedberg Personal Finance.com. Follow her on twitter @barbfriedberg and @roboadvisorpros. As of this writing, she held positions in VTI and VEU. More From InvestorPlace * Why Everyone Is Investing in 5G All WRONG * Top Stock Picker Reveals His Next 1,000% Winner * The 1 Stock All Retirees Must Own * Look What America's Richest Family Is Investing in Now The post The 3 Best Vanguard ETFs for a Long-Term Retirement Portfolio appeared first on InvestorPlace.
The stock market gets a full day off for Memorial Day. The bond market gets Monday off too, not to mention an early close ahead of the holiday weekend.
Celebrity financial adviser Suze Orman isn’t for everybody, but her common sense brand of money management has clearly resonated with her fans over the years. Lately, with Americans struggling to navigate the coronavirus pandemic, she’s been hitting the media circuit to address just some of the issues facing investors and consumers these days.
When it comes to investing, Warren Buffett, chairman of Berkshire Hathaway (BRK) is unquestionably the greatest who ever lived, posting an extraordinary record over more than five decades. From 1965 through 2018, Berkshire racked up a 20.5% compound annual return, more than double that of the S&P 500 (SPX) including dividends. Buffett also is a beloved multibillionaire in an age when the superrich are vilified.
When does the stock market open? While the market does have regular hours, trading doesn't stop when the major exchanges close.
Exchange-traded funds (ETFs) are growing at an astronomical rate. U.S. assets are closing in on $4.25 trillion. The ETF share of total assets at investment firms has more than doubled to 17% from 8% at the start of the decade, while mutual funds have lost market share. The only problem with this explosive growth? The industry now boasts thousands of funds, making it difficult to determine the very best ETFs.But investors are getting smarter about how they use ETFs in their portfolios. "After a decade of market gains, ETFs now play a unique role for investors as the foundation of a portfolio and also as vehicles that enable investors to be nimble," says Kari Droller, who oversees third-party mutual funds and ETFs at Charles Schwab.We try to be nimble, too. Although a thorough review of the Kiplinger ETF 20 happens only once a year, we watch each fund closely. As you'll see below, we've noted where a couple of funds merit more scrutiny as interest rates stay steady and low. But for now, we're holding fast to our 20.Read on for more analysis of our Kiplinger ETF 20 picks, which allow investors to tackle various strategies at a low cost. SEE ALSO: The 20 Best ETFs to Buy for a Prosperous 2020
[Editor's note: This article is regularly updated to include the most relevant information available.]At their core, mutual funds should be lower-risk investments. The aim of many mutual funds is to provide broad-based exposure to a particular asset class; stocks, bonds, etc. With that diversity, at least in theory, should come to a lower risk profile for investors.According to the Securities and Exchange Commission (SEC):InvestorPlace - Stock Market News, Stock Advice & Trading Tips"All funds carry some level of risk. With mutual funds, you may lose some or all of the money you invest because the securities held by a fund can go down in value. Dividends or interest payments may also change as market conditions change…A fund's past performance is not as important as you might think because past performance does not predict future returns. But past performance can tell you how volatile or stable a fund has been over a period of time. The more volatile the fund, the higher the investment risk."Indeed, an array of low-risk mutual funds spanning multiple asset classes are currently available to investors. Still, even low-risk mutual funds are not entirely free of risk. Even those with fixed-income exposure have some risk."Bond mutual funds -- like all mutual funds -- involve investment risk, including the possible loss of principal. A fundamental principle of investing known as the risk/reward tradeoff means that when you make an informed decision to assume some risk, you also create the opportunity for reward. Investors should be aware of the risks and potential for losses associated with bond mutual fund investing," according to the Investment Company Institute (ICI). * 7 Lumbering Large-Cap Stocks to Avoid Here are a few low-risk mutual funds for conservative investors to consider. Fidelity Income Conservative Bond Fund (FCONX)Source: Shutterstock Expense Ratio: 0.35% per year, or $35 on a $10,000 investment.The Fidelity Income Conservative Bond Fund (MUTF:FCONX) epitomizes "low-risk mutual fund," particularly at any time when interest rates could rise. Short-term bond funds are often among the most popular fixed-income funds due to the lower duration risk profile offered by short-dated bonds.Credit risk is benign with this Fidelity fund because its holdings are comprised primarily of sovereign debt. Over 60% of FCONX's holdings are rated AA or A. Vanguard Inflation-Protected Securities Fund (VIPSX)Source: Shutterstock Expense Ratio: 0.2%When looking for low-risk mutual funds, the Vanguard Inflation-Protected Securities Fund (MUTF:VIPSX) highlighted here is the investor class of this popular product.Treasury inflation-protected securities (TIPS), the bonds held by this Vanguard fund, are low-risk bonds. Reduced risk in the fixed income space usually means lower yields, and that is true of TIPS. * 7 Lumbering Large-Cap Stocks to Avoid Income on this low-risk mutual fund "can fluctuate more in this fund because payments depend on inflation changes. Investors with a long-term time horizon may wish to consider this fund as a complement to an already diversified fixed income portfolio," according to Vanguard. Vanguard Equity Income Fund (VEIPX)Source: Shutterstock Expense Ratio: 0.27%Over long holding periods, dividend stocks can reduce a portfolio's risk profile and there are plenty of dividend funds that can be classified as low-risk mutual funds, include the Vanguard Equity Income Fund (MUTF:VEIPX). VEIPX is the investor share class of this popular Vanguard offering.This low-risk mutual fund holds 97.4% stocks, and most of them have large market capitalizations. Financial services and technology stocks combine for over 28% of VEIPX's roster while the healthcare and industrial sectors combine for nearly 25% of its holdings.VEIPX does not explicitly have a dividend increase streak requirement, but this fund is home to some stocks with lengthy histories of rising payouts. Several of VEIPX's top ten holdings have dividend increase streaks that can be measured in decades. American Century Mid-Cap Value Fund (ACLAX)Expense Ratio: 1.23%Some words of advice regarding the American Century Mid-Cap Value Fund (MUTF:ACLAX). As the above expense ratio indicates, this is not a cheap fund, and that status is further cemented by a 5.75% sales load -- meaning investors considering this low-risk mutual fund should be in it for the long-term.On to better news, mid-caps have a lengthy history of outperforming large-caps while doing so with less volatility than small-cap stocks. * 7 Lumbering Large-Cap Stocks to Avoid The financial services and industrial sectors combine for nearly 40% of ACLAX's weight. None of the fund's holdings exceed a weight of 3.1% as of the start of the year. Vanguard Total Stock Market Index Fund (VTSAX)Source: Shutterstock Expense Ratio: 0.04%The Vanguard Total Stock Market Index Fund (MUTF:VTSAX) is a passively managed index fund, not an active mutual fund. In the fund world, VTSAX is one of the true giants among equity products. As of the end of May, across various share classes, the Vanguard Total Stock Market Index Fund, had almost $211 billion of net assets.VTSAX can be considered a low-risk mutual fund among equity funds due in part to its massive roster. This Vanguard fund is home to over 3,000 stocks, giving it a lineup that is more than six times larger than the S&P 500.VTSAX is the Admiral share class of this fund and has an annual fee that makes this fund very cheap. Fidelity Advisor Strategic Income Fund (FSTAX)Source: Shutterstock Expense Ratio: 0.98%The Fidelity Advisor Strategic Income Fund (MUTF:FSTAX) is a multi-sector bond fund, offering investors exposure to multiple corners of the fixed income universe."The fund uses a neutral mix of approximately 45% high yield, 25% U.S. Government and investment-grade, 15% emerging markets, and 15% foreign developed markets. Engaging in transactions that have a leveraging effect on the fund," according to Fidelity. * 7 Lumbering Large-Cap Stocks to Avoid The fund's managers can adjust credit and interest rate risk as market conditions. The fund has $16.94 billion of assets and has beaten its benchmark over the last three years. It has a 4% load. Invesco Global Low Volatility Equity Yield Fund (GTNDX)Source: Shutterstock Expense Ratio: 1.59%The Invesco Global Low Volatility Equity Yield Fund (MUTF:GTNDX) can be considered another low-risk mutual fund tracking the mid-cap space.Currently, GTNDX is underweight technology stocks, and overweight industrials and consumer discretionary. The latter category has kept its performance quite solid this year.This low-risk mutual fund "has dual objectives of providing income and long-term growth of capital. In addition to these objectives, the fund targets a level of total volatility that is less than that of its capitalization-weighted market index," according to the issuer.It also has a 5.5% load.As of this writing, Todd Shriber does not own any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Hot Stocks for 2020's Big Trends * 7 Lumbering Large-Cap Stocks to Avoid * 5 ETFs for Oodles of Monthly Dividends The post 7 Low-Risk Mutual Funds to Buy Now appeared first on InvestorPlace.
If you're looking to upgrade your portfolio in the new year, you'd be wise to look first at Vanguard - the proprietor of low-cost, high quality funds. The best Vanguard funds tend to have similar qualities. They're inexpensive. They're easy to understand. And when they're managed funds, they're managed well.Jack Bogle, who the world lost about a year ago, will long be remembered for his passionate advocacy of low-cost investing in general, and the index fund in particular. Pursuing those two ideas relentlessly, he built Vanguard into one of the world's largest investment companies with more than $5.5 trillion in assets.But Bogle possessed another talent that went virtually unnoticed. He was a superior judge of actively managed mutual funds.Consider: When Vanguard opened for business on May 1, 1975, Wellington Management - where Bogle had worked previously - was already on board. Vanguard's Wellington (VWELX) is now one of the nation's largest and most successful balanced funds with more than $110 billion in assets. And Wellington remains the subadvisor on several more Vanguard funds.In the mid-1980s, Bogle heard that several top managers wanted to leave the American Funds, which had a reputation of being such a good place to work that no one ever left. But those managers did leave, to start Primecap Management. Vanguard Primecap (VPMCX) and later Vanguard Primecap Core (VPCCX) were launched. They've been two of the most successful mutual funds ever.Today, however, we're going to look at the best Vanguard funds to buy for 2020. While Bogle is no longer with us, his firm still is renowned for both its skilled management and its dirt-cheap indexed products. Here, we'll look at some of each that should serve investors well in the new year. SEE ALSO: The 30 Best Mutual Funds in 401(k) Retirement Plans