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Participant ○○

Choice of ONE managed Balanced fund as benchmark....

I am 62 and recently chose to let my hourly FA manage my Conservative portfolio on a reduced AUM fee basis, because it is simply more convenient at this point for a few reasons.  I am however interested in establishing, independently, a position in a single balanced fund with moderate allocation.. I would contribute periodically and use it as a sort of benchmark to the advisor managed PF.  I know there are target allocation fund options...so thats one idea...but also would consider a VG Wellington or similar..

This is subjective of course but if you could only pick one such fund with a solid track record and low expense for a managed Balanced portfolio, what would be your first choice?  

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Frequent Contributor

Re: Choice of ONE managed Balanced fund as benchmark....

If not VWELX, then consider Star/VGSTX for benchmarking. It is a fund of active Vanguard funds but with no top level ER.

YBB
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Explorer ○○○

Re: Choice of ONE managed Balanced fund as benchmark....

Wellington is a great choice. Fidelity Balanced (FBALX) has a good record. TRP's Capital Appreciation is very good. It's closed though.  I prefer Wellington. A little more conservative for me. But all three are good.

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Participant ○○○

Re: Choice of ONE managed Balanced fund as benchmark....

VBIAX/VBINX are 'lightly managed' but considered to be indexed. Benchmark should be selected based on portfolio category to be comparable. Would need to know the advisor's portfolio strategy for an appropriate comparison. 

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Frequent Contributor

Re: Choice of ONE managed Balanced fund as benchmark....

@mikes425 , BTW, is it the same FA that you have been with or a different one? If his goal is conservative-allocation/management, why are you looking for a moderate-allocation benchmark? In conservative-allocation, reasonable benchmarks may be active VWINX, FTANX; passive VSCGX, etc.

YBB
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Participant ○○

Re: Choice of ONE managed Balanced fund as benchmark....

Same FA, i just lean toward a more moderate risk profile and ultimately will advocate for closer to a 50/50 allocation.

We have a value oriented approach abt. 42% equity, mostly large cap US.  A small % in international and EM...On bond/FI side, a range of a number of CEFs in ST to Intermediate bond and FI sectors, some EM debt, FR, TIPs..  ST treas.

Wellington was first instinct, albeit no dedicsted international exposure as i recall...

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Contributor ○○○

Re: Choice of ONE managed Balanced fund as benchmark....


@Kudzu wrote:

Wellington is a great choice. Fidelity Balanced (FBALX) has a good record. TRP's Capital Appreciation is very good. It's closed though. 


 

It has often been mentioned that VLAIX is an excellent choice in place of the closed PRWCX fund.

Good luck,

Fred

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Frequent Contributor

Re: Choice of ONE managed Balanced fund as benchmark....

I've been using VWELX as a benchmark for years.  I've beaten it handily for several years. This is the first year where my personal performance is just about neck and neck. As a result I've been building a position in it. It may never be the smartest investment I've made but it will be far from the dumbest. Good luck, rm

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Follower ○○

Re: Choice of ONE managed Balanced fund as benchmark....

Dodge & Cox Balanced Fund - DODBX. 

 

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Contributor ○○○

Re: Choice of ONE managed Balanced fund as benchmark....

I'm with YBB, take a look at Vanguard STAR (VGSTX).  very good long term record, a fund of funds comprising 11 actively managed Vanguard stock and bond funds.  It just seems to sit quietly and do a good job year after year.  

 

 

 

 

 

 

 

 

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Participant ○○

Re: Choice of ONE managed Balanced fund as benchmark....

Agreed, VGSTX for this purpose might be ideal vs VWELX. It’s actually a tough call between that and VWELX - or - VWINX.  All great funds in this realm. I wonder if there might be a bit more flexibility with VWELX vs Star-wherein underperformance of one or several funds can weigh down overall performance.  But track record certainly speaks well for it.


@mlott1 wrote:

I'm with YBB, take a look at Vanguard STAR (VGSTX).  very good long term record, a fund of funds comprising 11 actively managed Vanguard stock and bond funds.  It just seems to sit quietly and do a good job year after year.  

 

 

 

 

 

 

 

 


 

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Participant ○

Re: Choice of ONE managed Balanced fund as benchmark....

If you intend to have an actual account in a "single balanced fund with moderate allocation", then you may need to be concerned about income tax that will be owned on distributions made by the fund.

If the actual account is a taxable one, then consider using Vanguard Balanced Index or Vanguard Tax-Managed Balanced. Those funds tend to have lower taxable distributions than Vanguard Wellington and other actively managed balanced funds.

If the actual account is a tax-deferred one, then there will be no concern about income taxes when the fund makes distributions.

Instead of having an actual account, you could use the Morningstar Portfolio Manager to track the performance.

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Frequent Contributor

Re: Choice of ONE managed Balanced fund as benchmark....

good point

not taxed: VGSTX

taxed: VBIAX

high tax bracket: VTMFX

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Participant ○○

Re: Choice of ONE managed Balanced fund as benchmark....

Just coming back to this and have pretty well narrowed it to either VWELX or VGSTX.  Either is very valid for what I want to do. Maybe somebody can help me break the 'tie' -  I like STAR for the fund-of-funds diversification aspect. The only catch i see is in the possibility of a drag on overall performance based on underperformance of one or more market sectors of the individual funds; whereas VWELX offers a more direct active management aspect.  Don't know if i'm expressing that clearly enough.  Interested in any pro/con perspectives.  Thanks as always!

 

Mike   

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Frequent Contributor

Re: Choice of ONE managed Balanced fund as benchmark....


@mikes425 wrote:

Just coming back to this and have pretty well narrowed it to either VWELX or VGSTX.  Either is very valid for what I want to do. Maybe somebody can help me break the 'tie' -  I like STAR for the fund-of-funds diversification aspect. The only catch i see is in the possibility of a drag on overall performance based on underperformance of one or more market sectors of the individual funds; whereas VWELX offers a more direct active management aspect.  Don't know if i'm expressing that clearly enough.  Interested in any pro/con perspectives.  Thanks as always!

 

Mike   


For benchmarking, VGSTX may be better. It holds 60-40 allocation rigidly but is a fund of active funds.

YBB
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Participant ○○○

Re: Choice of ONE managed Balanced fund as benchmark....

I prefer the Vanguard Balanced Index Fund.  

Gabe

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Contributor ○

Re: Choice of ONE managed Balanced fund as benchmark....

If you are looking for a benchmark to measure how well your FA is doing, You might want to pick a fund that is merely a "good" fund. The odds of your FA disappointing are pretty high with a PRWCX. At least pick a fund that you can move into if you do better, either an open fund or a closed fund that you already have access to. It might also be good to use an average of 3-4 funds for a benchmark. Even the best fund's rankings fluctuate year to year.

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Explorer ○○○

Re: Choice of ONE managed Balanced fund as benchmark....

My beef against the STAR Fund is that it posses The Windsor Funds which have stunk recently 1yr,3yr,5yr, for its LCV selection.

I'd stick w/Wellington, or VBINX, or branch out to a very good , stodgy Balanced Fund, w/excellent F.I. Allocation Grade, e.g. ABALX, choose the F-1 CLASS,Load Free @ FIDO or Schwabie.

 

Good Luck w/any choice,

 

Signed,

NoFriends1

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Frequent Contributor

Re: Choice of ONE managed Balanced fund as benchmark....

Deleted, as I misunderstood the OP.

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Contributor ○○○

Re: Choice of ONE managed Balanced fund as benchmark....

@mikes425  Your concern about VGSTX is clear, and a valid point.  However, you can flip that same logic - what if the VWELX manager decides to load up on the next Washington Mutual or some such?  That would throw things off, too.  

I'm still in favor of VGSTX.

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