Vanguard Launch of Balanced Asset Allocation ETFs

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Shakespeare
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Re: Norbert, your wish has been granted [Vanguard launching cheap balanced index ETFs]

Post by Shakespeare »

Time to update simple index portfolios on finiki.
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Re: Norbert, your wish has been granted [Vanguard launching cheap balanced index ETFs]

Post by Shakespeare »

Sic transit gloria mundi. Tuesday is usually worse. - Robert A. Heinlein, Starman Jones
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Re: Norbert, your wish has been granted

Post by BRIAN5000 »

BRIAN5000 wrote: 01 Feb 2018 01:05 This may be silly but I'm genuinely excited !! This could be big.
and I'm still excited in at $24.80 missed the low :roll:

I have no life if this is what excites me I guess.
Last edited by BRIAN5000 on 01 Feb 2018 18:49, edited 1 time in total.
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Re: Norbert, your wish has been granted [Vanguard launching cheap balanced index ETFs]

Post by OnlyMyOpinion »

Or this link which compares the three new asset allocation etfs side-by-side. VCNS conservative (60%FI), VBAL balanced (40%FI) and VGRO growth (20%FI):
https://www.vanguardcanada.ca/documents ... ple_en.pdf
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Re: Norbert, your wish has been granted [Vanguard launching cheap balanced index ETFs]

Post by Quebec »

Shakespeare wrote: 01 Feb 2018 17:33 Time to update simple index portfolios on finiki.
I was gonna give the new ETFs a few months to gather assets and trading volume.
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Re: Norbert, your wish has been granted [Vanguard launching cheap balanced index ETFs]

Post by Peculiar_Investor »

I would agree. Although Vanguard has a great track record the new ETFs still need to establish themselves.
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Re: Norbert, your wish has been granted [Vanguard launching cheap balanced index ETFs]

Post by Quebec »

Quebec wrote: 01 Feb 2018 16:14 If I can convince my wife to become comfortable with discount brokerage accounts, VBAL is the new "what to do if I die" plan.
Upon further consideration, this is not the new plan at all. VBAL does solve almost all portfolio management questions for an uninterested widow(er). But it solves none of the financial planning questions, such as
- can I retire now or should I keep working?
- should I take CPP/QPP/OAS sooner or later?
- when do I convert my RRSP to a RIFF and how much can I withdraw from the RRIF each year?
- or should I annuitize?
- ...

What Vanguard needs to offer in Canada is very cost cost index funds (including balanced funds), and an optional advisory service. Apparently the US advisory service costs 0.3% of assets, with a portfolio minimum of $50k. Imagine if you could get personalized advice from a qualified human planner and excellent products for a total fee of about 0.5-0.6%. Now that would be the new "what to do if I die" plan.
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Re: Norbert, your wish has been granted [Vanguard launching cheap balanced index ETFs]

Post by DanH »

True, a product is not a plan. It's an important point. But with the product side taken care of (if VBAL or something similar fitting the bill) you can line up a couple of fee-for-service financial planners to provide the back-up for the planning side. But yes, it's ideal to have those two functions integrated. Also, firms like Steadyhand, Mawer, Beutel Goodman and Leith Wheeler all have "private client" counsellors or portfolio managers. Some might be more planning oriented than others but these are also good options - just not 25 basis point options.
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Re: Norbert, your wish has been granted [Vanguard launching cheap balanced index ETFs]

Post by OptsyEagle »

Quebec wrote: 02 Feb 2018 08:20
Quebec wrote: 01 Feb 2018 16:14 If I can convince my wife to become comfortable with discount brokerage accounts, VBAL is the new "what to do if I die" plan.
Upon further consideration, this is not the new plan at all. VBAL does solve almost all portfolio management questions for an uninterested widow(er). But it solves none of the financial planning questions, such as
- can I retire now or should I keep working?
- should I take CPP/QPP/OAS sooner or later?
- when do I convert my RRSP to a RIFF and how much can I withdraw from the RRIF each year?
- or should I annuitize?
- ...

What Vanguard needs to offer in Canada is very cost cost index funds (including balanced funds), and an optional advisory service. Apparently the US advisory service costs 0.3% of assets, with a portfolio minimum of $50k. Imagine if you could get personalized advice from a qualified human planner and excellent products for a total fee of about 0.5-0.6%. Now that would be the new "what to do if I die" plan.
It doesn't walk my dog either, so I don't want it. lol.
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Re: Norbert, your wish has been granted [Vanguard launching cheap balanced index ETFs]

Post by AltaRed »

Nor does any of this help 'established' portfolios with high 6 or 7 digits of unrealized capital gains in taxable accounts. That said, there appear to be good opportunities now for those relatively early into the investing phase of their lives to get on to one of these horses and stay there.
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Re: Norbert, your wish has been granted [Vanguard launching cheap balanced index ETFs]

Post by Shakespeare »

There are also those of us with complex RRSPs or RRIFs. If we wish to simplify because nobody else can manage them, we can do so.
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Re: Norbert, your wish has been granted [Vanguard launching cheap balanced index ETFs]

Post by AltaRed »

Shakespeare wrote: 02 Feb 2018 12:48 There are also those of us with complex RRSPs or RRIFs. If we wish to simplify because nobody else can manage them, we can do so.
Indeed. A perfect opportunity for registered accounts.
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Re: Norbert, your wish has been granted [Vanguard launching cheap balanced index ETFs]

Post by Shakespeare »

Well, I think I will consolidate VSB and VTI in my RRIF into VBAL. Maybe next week.

Correction: VT, not VTI.
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Re: Norbert, your wish has been granted [Vanguard launching cheap balanced index ETFs]

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AltaRed wrote: 02 Feb 2018 12:46 Nor does any of this help 'established' portfolios with high 6 or 7 digits of unrealized capital gains in taxable accounts. That said, there appear to be good opportunities now for those relatively early into the investing phase of their lives to get on to one of these horses and stay there.
Do you think this would be attractive for cases that might end up with 6 or 7 digits unrealized capital gains? Or rather, taxable accounts in general? Common wisdom on this forum seems to argue against bond ETFs in taxable accounts, against premium bonds, against strip bonds etc. FI is a problem unregistered regardless, but this would mainly/only seem a good solution for registered investments. Which is fine, of course.
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Re: Norbert, your wish has been granted [Vanguard launching cheap balanced index ETFs]

Post by BRIAN5000 »

Shakespeare wrote: 02 Feb 2018 17:19 Well, I think I will consolidate VSB and VTI in my RRIF into VBAL. Maybe next week.
Waste of $30 and a good way to increase your expenses?

VAB/XAW still looks pretty good as well.
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Re: Norbert, your wish has been granted [Vanguard launching cheap balanced index ETFs]

Post by Insomniac »

Not for me. I'm not interested in emerging markets or ETFs that are currency hedged. Also not sure if foreign bonds are needed.
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Re: Norbert, your wish has been granted [Vanguard launching cheap balanced index ETFs]

Post by Shakespeare »

Waste of $30 and a good way to increase your expenses?
Simplicity in case I wind up drooling.

Added: In RRIF or LRIF, once you reach 70 and 5% withdrawal in a balanced portfolio, you have to sell something each year. I can decide what to sell while I am competent. But what if I am not?

If I am alive and competent there is no problem. If I am dead there is no problem: sell it all. But what if I'm Alzheimered out?

If the portfolio only holds VBAL plus a HISA, the decision is easy.
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Re: Norbert, your wish has been granted [Vanguard launching cheap balanced index ETFs]

Post by AltaRed »

peter wrote: 02 Feb 2018 17:28
AltaRed wrote: 02 Feb 2018 12:46 Nor does any of this help 'established' portfolios with high 6 or 7 digits of unrealized capital gains in taxable accounts. That said, there appear to be good opportunities now for those relatively early into the investing phase of their lives to get on to one of these horses and stay there.
Do you think this would be attractive for cases that might end up with 6 or 7 digits unrealized capital gains? Or rather, taxable accounts in general? Common wisdom on this forum seems to argue against bond ETFs in taxable accounts, against premium bonds, against strip bonds etc. FI is a problem unregistered regardless, but this would mainly/only seem a good solution for registered investments. Which is fine, of course.
It ultimately depends what one wants for simplicity. This is a one stop solution for those who are not inclined to spend more than a few hours a year on their portfolios either now or eventually when a senior. That might be a few million Canucks.
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Re: Norbert, your wish has been granted [Vanguard launching cheap balanced index ETFs]

Post by BRIAN5000 »

Yes but you still need someone with a POA and the same or different person to act as a strong advocate for your interests in all other matters. VBAL would make it easier for sure but a competent POA or advocate (with access) should be able to handle VSB/VTI and a HISA.
I'm not interested in emerging markets or ETFs that are currency hedged. Also not sure if foreign bonds are needed.
Either am I but this is pretty close, hard to get something this easy perfect only 16.5% foreign FI in VBAL.
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Re: Norbert, your wish has been granted [Vanguard launching cheap balanced index ETFs]

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BRIAN5000 wrote: 02 Feb 2018 18:57 Yes but you still need someone with a POA and the same or different person to act as a strong advocate for your interests in all other matters. VBAL would make it easier for sure but a competent POA or advocate (with access) should be able to handle VSB/VTI and a HISA.
Perhaps, and one might think someone with a DIY brokerage account might pick a POA that also is DIY, but there are other important qualities to consider in a POA and running a brokerage account, even as simple as 3 ETFs, may not be that high on the list. Worst case is it gets turned over to a % of AUM FA. I know a lot of people that wouldn't know what a brokerage account looks like, never mind a DIY.
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Re: Norbert, your wish has been granted [Vanguard launching cheap balanced index ETFs]

Post by Shakespeare »

IMO most people can't run a 3 ETF portfolio.
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Re: Norbert, your wish has been granted [Vanguard launching cheap balanced index ETFs]

Post by MikeFreedom49? »

Morningstar has a brief article on the new ETFs, they say it’s 5 to 7 basis points in management fees on top of the underlying ETFs fees. It’s very good for someone who doesn’t want to or can’t manage their own portfolio.

http://cawidgets.morningstar.ca/Article ... &id=846981
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Re: Norbert, your wish has been granted [Vanguard launching cheap balanced index ETFs]

Post by longinvest »

Shakespeare wrote: 02 Feb 2018 22:48 IMO most people can't run a 3 ETF portfolio.
I would sadly agree to that. :(

It's really simple for someone who knows how to add, subtract, multiply, and divide. But, lots of people have trouble figuring out what to add or multiply, even with a calculator. Figuring out that to get 40% of $12,434.34 one has to multiply it by 0.4 is a stretch. Figuring out how many ETF units one has to sell (and how many to buy with the proceeds) to rebalance the portfolio to a given allocation becomes a Herculean task. If you spread the portfolio across multiple accounts (RRSP, TFSA, non-registered), it becomes an impossible task. :cry:

Of course, all of us on this forum (I hope) would be able to do it easily in 2 minutes using a simple sheet of paper. It's dead simple as soon as one is able to use basic arithmetic operations correctly. Math illiteracy is higher than one might think.

For such people, VBAL is the start of a good solution. Even simpler would be a mutual fund version, to avoid having to think in terms of units (let alone keeping track of ETF phantom distributions for tax purpose in a non-registered account).
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Re: Norbert, your wish has been granted [Vanguard launching cheap balanced index ETFs]

Post by ghariton »

longinvest wrote: 02 Feb 2018 23:56 It's really simple for someone who knows how to add, subtract, multiply, and divide.
Upon reflection, I don't think that knowing how to divide is necessary. Perhaps if you have a certain sum and you want to know how many units of a certain stock to buy. But all you have to do is make a guess and TDDI will tell you what it will cost you, then iterate.

FWIW my son teaches math at Dawson College in Montreal, and he can't run a DIY portfolio at all. It's not the lack of math skills, it's the emotions.

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Re: Norbert, your wish has been granted [Vanguard launching cheap balanced index ETFs]

Post by Shakespeare »

Well, I'm running an integrated portfolio across 3 separate accounts making extra money by trading large-cap Canadian stocks around a central position.

If I get hit by a stroke, there is no way in hell my POA guardian can do that.
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