Build Vanguard LifeStrategy Portfolios With ETFs

What are Vanguard LifeStrategy portfolios?

There are four Vanguard LifeStrategy portfolios. They are exposed to 4 asset clases. They can be built with just 4 ETFs. They differ from lifecycle funds in that they keep the same asset allocation where the lifecycle funds change theirs.

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What is the historical return of Vanguard’s LifeStrategy portfolios?

Here is the historical return of Vanguard’s LifeStrategy portfolios.

Portfolio data was last updated on 11th of August 2023, 08:35 ET

NameYear to dateReturn in 202210 year returnCAGR since 1989 (%)Draw DownExpense ratioYield
Vanguard LifeStrategy Income Fund (20/80)2.42-13.992.855.95-13.990.05%2.23
Vanguard LifeStrategy Conservative Growth (40/60)5.18-14.984.466.67-14.980.05%2.21
Vanguard LifeStrategy Moderate Growth (60/40)7.95-15.986.017.28-21.870.05%2.19
Vanguard LifeStrategy Growth Fund (80/20)10.69-16.967.57.75-30.80.05%2.17
Performance for Vanguard LifeStrategy portfolios

Here is what the table is showing you

Year to date: This shows what the portfolio has returned this year starting from the first trading day of the year.

10 Year return: This shows the compounded annualized growth rate over a ten-year period. The current year is excluded from calculations.

CAGR since 1989: This shows the compounded annualized growth rate since 1989. The current year is excluded from calculations.

Expense ratio: This shows the cost of holding the portfolio if you were to construct the portfolio using the proposed ETFs.

Yield: This is the expected dividend yield of the portfolio.

Please note that past performance is not a guarantee of future returns.

How do Vanguard’s LifeStrategy portfolios compare to the best portfolios?

Below you can see the returns of the best portfolios that we have benchmarked.

NameSee PortfolioYear to dateReturn in 202210 year returnCAGR since 1989 (%)Draw Down
Ben Stein RetirementComing soon!4.05-18.039.4610.8-35.42
Paul Merriman 4-Fund-PortfolioComing soon!9.22-11.9811.2510.38-35.26
S&P 500Coming soon!17.09-18.1912.5210.28-37.63
Paul Merriman Target Date Portfolio (25 year old)Coming soon!6.63-13.088.2810.2-36.46
Scott Adams Dilbert PortfolioComing soon!10.87-18.757.010.19-44.88
JL Collins, Simple Path To Wealth, Wealth Building PortfolioComing soon!16.6-19.5112.0810.19-37.0
American Institute of Individual Investors (AAII) PortfolioComing soon!3.74-13.919.710.16-40.85
Paul Merriman Target Date Portfolio (35 year old)Coming soon!6.57-13.228.3110.08-36.35 Portfolio 14Coming soon!6.95-16.947.599.99-37.91
Balanced Portfolio 90/10Coming soon!14.83-18.8711.039.84-32.78
The 10 Best Performing Portfolios That We Have Benchmarked

How do you build Vanguard’s LifeStrategy portfolios with ETFs?

Here is how you build Vanguard’s LifeStrategy portfolios with ETFs.

Vanguard LifeStrategy Income Fund (20/80)

  • 12.00% US Total Stock Market
  • 8.00% International All-World ex-US
  • 56.00% Total US Bond Market
  • 24.00% Non-US Bonds

Vanguard LifeStrategy Conservative Growth (40/60)

  • 24.00% US Total Stock Market
  • 16.10% International All-World ex-US
  • 42.00% Total US Bond Market
  • 17.90% Non-US Bonds

Vanguard LifeStrategy Moderate Growth (60/40)

  • 36.10% US Total Stock Market
  • 24.10% International All-World ex-US
  • 27.90% Total US Bond Market
  • 11.90% Non-US Bonds

Vanguard LifeStrategy Growth Fund (80/20)

  • 48.10% US Total Stock Market
  • 31.90% International All-World ex-US
  • 14.00% Total US Bond Market
  • 6.00% Non-US Bonds

If you want a 100% bond portfolio, there are of course the total bond market fund or ETF (BND).

If your a missing a 100% stock portfolio, there are the total stock market ETF and fund (VTI).

Make sure you select the right ETFs!

There are a lot of ETFs! It is pretty boring to sift through hundreds and hundreds of ETFs just to find the right one, but it is worth it!

Finding the right and BEST ETF could earn you a lot more money than number two on the list.

We have done the work for you – all for FREE.

We have carefully selected ETFs for each asset class that the portfolios on use. If you want to read more about our selection process and see what we consider the best ETFs please visit our article What Is The Best ETF?

If you are a European investor you need to buy European ETFs (they need to be of the UCITS kind!).

We have listed 47 of the best ETFs in our article What Are The Best ETFs For European Investors? (Here Is 47).

As of 2021 we also track socially responsible investing ESG portfolios. Socially responsible investing (ESG) portfolios prioritize investing that puts an emphasis on environmental, social, and corporate governance issues.

You can find the socially responsible investing ESG ETFs in the same article.

Vanguard LifeStrategy Portfolios, Happiness In A Box

Vanguard is the fund management company founded by the supreme good guy of investing John C. Bogle.

Vanguard has a unique governance structure that makes it so that Vanguard’s only mission is to look out for those who own shares of the mutual funds. John Bogle has structured Vanguard in such a way that the owners of shares are also the owners of Vanguard.

The investors (owners) are all those people who own a Vanguard mutual fund or ETF. John Bogle calls it the o_nly mutual mutual fund company._

John Bogle talks about it in one of his best books Common Sense on Mutual Funds.

John Bogle - Common Sense on Mutual Funds

I recently completed a history of the Vanguard, which was very good. It is called The Man in the Arena: Vanguard Founder John C. Bogle and His Lifelong Battle to Serve Investors First

The Man in the Arena: Vanguard Founder John C. Bogle and His Lifelong Battle to Serve Investors First

Here is what one reviewer wrote about the book:

“The book is part tribute to Mr. Bogle, part history, and part investment wisdom. The breadth of the tributes extends beyond the finance world of managers and writers, to heavyweight economists, such as Paul Volcker, and all the way to a former resident of the White House, Bill Clinton. The history spans the time period from the founding of Vanguard and its unique mutual ownership to the launching of the first no-load mutual funds and index funds. I personally loved the poster that declared, “Index funds are un-American.”

An ad taken out against index funds

What are the Vanguard LifeStrategy portfolios?

The Vanguard LifeStrategy funds are one-fund portfolio funds. They are funds of funds. This means that each fund contains a collection of other funds.

This is the same method that target-date funds are constructed. It is an easy and inexpensive way to build one-fund portfolio funds. The alternative would be that each fund would need to buy individual shares and bonds to reach their allocated target levels.

One-fund portfolio funds are sometimes called target-risk funds.

A one-portfolio fund promises a particular asset allocation within the fund, such as 50% stocks and 50% bonds. The fund handles all the rebalancing for you. The only thing you need to do is buy that one fund. Other one-portfolio funds are target-date funds that also have a particular allocation but one that changes as you age.

There are many other providers of funds and ETFs who offer one-fund portfolios solutions. Ishares have a few ETFs.

Charles Schwab also provides one-fund portfolios as does Fidelity.

There are 4 Vanguards LifeStrategy funds. An income fund and three growth funds. They are:

  1. LifeStrategy Income Fund
  2. LifeStrategy Conservative Growth Fund
  3. LifeStrategy Moderate Growth Fund
  4. LifeStrategy Growth Fund

The LifeStrategy portfolio allocation, along with recommended investment time horizons. Source: Vanguard

The LifeStrategy portfolio allocation, along with recommended investment time horizons. Source: Vanguard

Where can I learn more about the Vanguard LifeStrategy portfolios?

It is always a pleasure to read any of John Bogle’s books, so any book by him is recommended.

These two are good starting points.

The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns

Vanguard’s youtube channel.

You can compare different Target Date Funds in the article What Is The Best Target Date Fund?

If you need a primer on target-date portfolios, you should go read the article Target Date Fund Portfolios.

Suggestions for your next steps

If you have already committed to a portfolio then maybe you need help maintaining the portfolio. In this case you will find our rebalance worksheet useful.

Rebalancing your portfolio lowers your risk and may provide higher returns in the long run. It is completely FREE.

You can find the rebalance worksheet in our article Here Is The Most Easy To Use Portfolio Rebalance Tool.

Are Vanguard LifeStrategy funds good?

Vanguard LifeStrategy funds are maybe the best-balanced funds you can get.

Is Vanguard good for beginners?

Vanguard has 7 trillion dollars under management. Vanguard is suited for both beginners and very advanced investors.

What Vanguard fund does Warren Buffett recommend?

Warren Buffett recommends that most people will do just fine if they held a Vanguard S&P 500 fund (VOO) and a short-term treasury bond fund (VGSH).