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Explorer ○○

Core and Explore Changes

@yogibearbull, you have been a consistent and articulate advocate for the "Core and Explore" philosophy.

I was wondering whether you have adjusted your thinking on your core, given the ongoing dominance of Growth over Value, the high volativity of markets and uncertain economic times, et. al. Shifts in fund management like Wellington, etc.

If you don't mind sharing, what makes up your core these days? How has that changed, particularly in terms of equities?

Others, please chime in as well. 

Not interesting in hearing from active traders with their current fav recommendations. No CEFs please!!

More interested in what "buy and hold" retirees/investors have to say. Again, especially as it relates to equities.

Interested as well in the relative allocation between core funds in your retirement portfolio.

I think I have it right for myself but am already interested in comparing that with what others are currently doing.

Thanks

N.B. I suppose you could say this is an elaboration of Win's recent thread on What is the Best Vanguard Fund to Hold in Retirement by looking more broadly at how the parts come together.

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9 Replies
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Frequent Contributor

Re: Core and Explore Changes

Only minor changes in core that includes allocation/balanced funds, core bond funds [mostly ST as replacements to m-mkt funds] and core-plus bond funds [a shift from multisector bond funds that used to be in explore]. VWELX is changing by itself for better.

Future growth tilt will come from explore. For example, I will use VUG or QQQ instead of VEIPX or VYM for quick equity allocation shifts.

My effective-equity allocation remains around 50%. I am comfortable with its related upside and downside. For me, control of volatility via effective-equity [Relative SD] is primary and performance is wherever it falls, or secondary.

YBB
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Participant ○○○

Re: Core and Explore Changes

Core is 50% World Equities + 45% USD IG IT Bonds + 5% CASH.

Explore is slight tilt to EM and SC equities.

IG = Investment Grade. IT = Intermediate Term.

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Explorer ○○

Re: Core and Explore Changes

Thanks @yogibearbull for the prompt and comprehensive response.

If I may, what are the allocation/balanced funds in your core?

You mention VUG and QQQ, are you still holding VIGAX or will those ETFs replace that fund?

I guess I never comprehended whether you were using VIGAX as  part of your core or explore.

If it is not prying too much, what are the core-plus bond funds you are considering. You mention that multisector bond funds were in your explore. To reach your roughly 50/50 allocation are you using core-plus bonds in the core or explore category?

Many, many thanks and I apologize for so many personal questions but I admit that I am curious.

Steve

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Explorer ○○

Re: Core and Explore Changes

@yogibearbull 

See above post.

Would you be willing to share what allocation/balanced funds currently make up your core?

Thanks.

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Frequent Contributor

Re: Core and Explore Changes

VIGAX [explore] was missed but its another class VUG was included.

Allocation/balanced funds in core include VWINX/VWIAX, VWELX, JABAX.

I am not willing to discuss other details of the portfolio, but I described things in general terms.

YBB
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Explorer ○○

Re: Core and Explore Changes

Many thanks! Much appreciated.

How you given any thought about PRWAX as a possible substitute for VIGAX or JABAX?

Do you have any particular feelings about that fund? Other than its higher expense.

I see that Marc Pinto will retire next year at JABAX. They don't seem to have the bench that Wellington has. Is that a cause of concern to you?

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Frequent Contributor

Re: Core and Explore Changes


@Newer_Retiree wrote:

Many thanks! Much appreciated.

How you given any thought about PRWAX as a possible substitute for VIGAX or JABAX?

Do you have any particular feelings about that fund? Other than its higher expense.

I see that Marc Pinto will retire next year at JABAX. They don't seem to have the bench that Wellington has. Is that a cause of concern to you?


PRWCX isn't available to me but it is a great fund.

I have had JABAX for MANY years. There were similar concerns when Gibson Smith left in 2016 on the fixed-income side. I put it on my watch list for a while then but replacements worked fine; at that time, the lead manager role also shifted from Gibson Smith to Marc Pinto. I will watch the equity side manager transition [from Marc Pinto to Jeremiah Buckley]. I have another implied screen - it is in my Schwab DAF and I think that Schwab will kick it out if it starts to falter; Schwab hasn't hesitated to make changes in its DAF lineup [a small list].

YBB
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Participant ○○○

Re: Core and Explore Changes


@yogibearbull wrote:

Only minor changes in core that includes allocation/balanced funds, core bond funds [mostly ST as replacements to m-mkt funds] and core-plus bond funds [a shift from multisector bond funds that used to be in explore]. VWELX is changing by itself for better.

Future growth tilt will come from explore. For example, I will use VUG or QQQ instead of VEIPX or VYM for quick equity allocation shifts.

My effective-equity allocation remains around 50%. I am comfortable with its related upside and downside. For me, control of volatility via effective-equity [Relative SD] is primary and performance is wherever it falls, or secondary.


Yogi,

Is it possible to figure out effective-equity allocation with M* x-ray?

Hootz

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Frequent Contributor

Re: Core and Explore Changes


@Hootz wrote:

@yogibearbull wrote:

Only minor changes in core that includes allocation/balanced funds, core bond funds [mostly ST as replacements to m-mkt funds] and core-plus bond funds [a shift from multisector bond funds that used to be in explore]. VWELX is changing by itself for better.

Future growth tilt will come from explore. For example, I will use VUG or QQQ instead of VEIPX or VYM for quick equity allocation shifts.

My effective-equity allocation remains around 50%. I am comfortable with its related upside and downside. For me, control of volatility via effective-equity [Relative SD] is primary and performance is wherever it falls, or secondary.


Yogi,

Is it possible to figure out effective-equity allocation with M* x-ray?

Hootz


No.

M* X-ray only shows nominal-equity %.

But Portfolio Visualizer [PV] can be used to calculate effective-equity % from the ratio of SD_portfolio and SD_sp500. For example, for FBALX, X-Ray shows 65.52% nominal-equity, but PV shows 75.68% effective-equity. I used this example to show that a wide difference is possible. I don't know if FBALX holders realize that it is now acting like aggressive-allocation [70-85% equity], not moderate-allocation [50-70% equity] that it is supposed to be. Other anomalies detected by this approach are DODBX [MA acting like AA], FKINX [CA but acting like MA], etc.

Depending on the type of fund, the two may differ by 0-15%.

Beware that these two sources may use different dates for fund portfolios.

YBB
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