Vanguard now has one of the largest ETF lineups. Continuing their low cost index fund tradition, Vanguard has made these ETFs have extremely low (if not lowest) cost. If you have a brokerage account at Vanguard, you can also trade these ETFs commission free. For more information on these ETFs, please see Vanguard ETF page

We use these ETFs to construct an investment plan Vanguard ETFs. The plan consists of 53 funds. These funds enable participants to gain exposure to 5 major assets: US Equity, Foreign Equity, REITs, Emerging Market Equity, Fixed Income.

 The following is the list of Vanguard ETFs in the plan:

Asset Class Ticker Name
Consumer Discretionary VCR Vanguard Consumer Discretionary ETF
Consumer Staples VDC Vanguard Consumer Staples ETF
LARGE BLEND VIG Vanguard Dividend Appreciation ETF
DIVERSIFIED EMERGING MKTS VWO Vanguard Emerging Markets Stock ETF
Equity Energy VDE Vanguard Energy ETF
Foreign Large Blend VEA Vanguard Europe Pacific ETF
EUROPE STOCK VGK Vanguard European ETF
LONG GOVERNMENT EDV Vanguard Extended Dur Trs Idx ETF
Financial VFH Vanguard Financials ETF
Foreign Large Blend VEU Vanguard FTSE All-World ex-US ETF
FOREIGN SMALL/MID GROWTH VSS Vanguard FTSE All-Wld ex-US SmCp Idx ETF
LARGE GROWTH VUG Vanguard Growth ETF
Health VHT Vanguard Health Care ETF
LARGE VALUE VYM Vanguard High Dividend Yield Indx ETF
Industrials VIS Vanguard Industrials ETF
Technology VGT Vanguard Information Technology ETF
Intermediate-Term Bond BIV Vanguard Intermediate-Term Bond ETF
Intermediate-Term Bond VCIT Vanguard Interm-Tm Corp Bd Idx ETF
Long-Term Bond BLV Vanguard Long-Term Bond Index ETF
Long-Term Bond VCLT Vanguard Long-Term Corp Bond Idx ETF
LONG GOVERNMENT VGLT Vanguard Long-Term Govt Bd Idx ETF
Natural Resources VAW Vanguard Materials ETF
LARGE BLEND MGC Vanguard Mega Cap 300 Index ETF
LARGE GROWTH MGK Vanguard Mega Cap 300 Gr Index ETF
LARGE VALUE MGV Vanguard Mega Cap 300 Value Index ETF
MID-CAP BLEND VO Vanguard Mid Cap ETF
Mid-Cap Growth VOT Vanguard Mid-Cap Growth ETF
MID-CAP VALUE VOE Vanguard Mid-Cap Value ETF
Intermediate-Term Bond VMBS Vanguard Mortgage-Backed Sec Idx ETF
DIVERSIFIED PACIFIC/ASIA VPL Vanguard Pacific Stock ETF
REAL ESTATE VNQ Vanguard REIT Index ETF
Short-Term Bond BSV Vanguard Short-Term Bond ETF
SHORT GOVERNMENT VGSH Vanguard Short-Term Govt Bd Idx ETF
SMALL BLEND VB Vanguard Small Cap ETF
Small Growth VBK Vanguard Small Cap Growth ETF
SMALL VALUE VBR Vanguard Small Cap Value ETF
Communications VOX Vanguard Telecom Services ETF
Intermediate-Term Bond BND Vanguard Total Bond Market ETF
LARGE BLEND VTI Vanguard Total Stock Market ETF
WORLD STOCK VT Vanguard Total World Stock Index ETF
Utilities VPU Vanguard Utilities ETF
LARGE VALUE VTV Vanguard Value ETF
ROOT CASH CASH
Short-Term Bond VCSH Vanguard Short-Term Corp Bd Idx ETF
Intermediate Government VGIT Vanguard Interm-Tm Govt Bd Idx ETF
Global Real Estate VNQI Vanguard Global ex-US Real Estate ETF
LARGE BLEND VOO Vanguard S&P 500 ETF
LARGE BLEND VV Vanguard Large Cap ETF
MID-CAP BLEND VXF Vanguard Extended Market Index ETF
Foreign Large Blend VXUS Vanguard Total Intl Stock Idx ETF
Inflation-Protected Bond VTIP Vanguard Shrt-Term Infl-Prot Sec Idx ETF
WORLD BOND BNDX Vanguard Total Intl Bd Idx ETF
Emerging Markets Bond VWOB Vanguard Emerg Mkts Govt Bd Idx ETF

 Asset classes covered: 

Asset Class Number of funds
Balanced Fund 0
REITs 2
Fixed Income 15
Commodity 0
Sector Fund 10
Foreign Equity 5
Emerging Market Equity 2
US Equity 17
Other 2
Total 53

MyPlanIQ offers two asset allocation strategies: strategic and tactical asset allocation strategies (SAA and TAA). 

Strategic Asset Allocation is based on well known modern portfolio theory and its key features include: diversification, proper fund selection and periodically re-balancing.

Tactical Asset Allocation works on a diversified array of assets provided by funds in a plan and adjusts asset mixes based on market conditions such as asset price momentum utilized by TAA.

The following table shows how these portfolios have performed:

Portfolio Performance Comparison (as of 11/1/2013)

Portfolio Performance Comparison

Ticker/Portfolio Name YTD
Return**
1Yr AR 3Yr AR 5Yr AR 5Yr Sharpe 10Yr AR 10Yr Sharpe
Vanguard ETFs Strategic Asset Allocation – Optimal Moderate 8.8% 11.0% 7.3% 12.1% 0.8 7.2% 0.45
Vanguard ETFs Tactical Asset Allocation Moderate 7.5% 9.9% 8.0% 10.1% 0.87 10.0% 0.77
Five Core Asset ETF Benchmark Tactical Asset Allocation Moderate 8.4% 9.7% 5.4% 8.7% 0.82 9.1% 0.73
VFINX (Vanguard 500 Index Investor) 25.5% 26.0% 16.5% 15.1% 0.68 7.4% 0.31
VBINX (Vanguard Balanced Index Inv) 14.6% 15.2% 11.1% 12.2% 0.92 7.0% 0.49

All of these portfolios are performing reasonably well. Even though they lagged behind Vanguard Balanced Index fund VBINX that consists of 60% US stocks and 40% US bonds in the near term, primarily because of the recent strength in US stocks, all of the model portfolios outperformed VBINX in the 10 year time frame. 

We also note that the Vanguard TAA portfolio outperformed Five Core Asset ETF Benchmark Tactical Asset Allocation Moderate by some big margin. This illustrates the fund selection advantage: in a major asset class: various sub asset classes covered by Vanguard ETFs can be rotated in and out in different time periods, resulting 1-2% performance difference. 

Disclosure:

MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.