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I'm considerning a portfolio consisting of your "6 ways from Sunday" + Emerging Markets for a total of 7 funds.  My potfolio will be in Schwab, so I've been looking for lower entry costs equivalents.  Below is what I've found so far.  I believe that most of Vanguard ETFs are similar to the Couch Potato index funds.  However, I haven't found a good replacement for VGTXS and the energy ETF's don't appear to be the same as VEGNX.  Also, I should be able to buy BEGBX in my Schwab account, but I get a message to contact my broker when I try, which I'll do, but in case BEGBX is not available to me, any suggestions fro a replacement?

1. Treasury Inflation Protected Securties: TIP for VIPSX (very close alternative)
2. Total Stock Market: VTI for VTSMX (very close ETF)
3. Total International Stock Market: ? for VGTSX (can't find a good replacement for VGTSX, any suggestions)
4. International Bonds:  ? for BEGBX (BEGBX is probably ok - need to check with broker)
5. Real Estate:  VNQ for VGSIX (very close ETF)
6. Energy:  VDE or XLE for VGENX (VDE and XLE are not exact replacements as they appear to be domestic only whereas VGENX seems to contain international as well - any suggestions)
7. Emerging Markets:  VWO for VEIEX (very close ETF)

 I use BWX for international bonds.  I believe Scott recommended it.

Thanks for the alternative to BEGBX.  Hard to evaluate BVW because it's only been available since Oct 2007, however, Q1 compares very well.  I'm sure Scott has looked at the details of their investments and if he says they're comparable, that's good enough for me.

John. 

Sorry, I'm getting my symbols mixed up.  In the above reply, I meant to say BWX instead of BVW. 

John.

What are the actual Vanguard Family of Funds in the 6 ways from Sunday portfolio?

CJ,

 I have made a post here about how to construct a portfolio for the couch potato.

 http://assetbuilder.com/forums/p/2082/4337.aspx#4337

 
Thanks,

Zack
 

jjochen,

Concerning the energy fund, I checked into this when cobbling together my 10-speed.

Mutual fund: VGENX is actively managed for Vanguard by Wellington.  Expense ratio is 0.25%.

ETF:  VDE tracks an MSCI index.  Expense ratio is 0.22%, barely less.

The ETF only had returns from 2005 on and was well below the performance of the mutual fund each year.  I opted for ETFs if everything else was equal, but with this one I picked the mutual fund,  It has the added flexibility when re-balancing (no brokerage fees), and the only drawback is a 1% fee on sale of shares held less than one year.  Also, Wellington seems to do well as a fund manager - witness the Wellington fund (balanced category).

 I'd like to hear Scott Burn's comments.

I believe that you have the wrong ticker in the first part of your message - VEGNX instead of VGENX.  Also, I didn't find a fund listing for ticker VGTXS.

You're right about my symbol in the first paragraph; it should be VGENX instead of VEGNX.  I need to be more careful with my symbols.

Abernathy in Everett, 

VGTXS is the Vanguard Total International Stock Index - did you find an EFT for this fund?  Since my account is in Schwab I could use SWINX (Swab International Index Fund).  It has a long history and annual returns are similar and no transaction fee for me, but expense ratio is 0.69% for SWINX instead of 0.27% for VGTXS.  If I buy VGTXS in my Schwab account, there is a transaction fee of $49.95.

The Energy fund VGENX won't work in my situation becuase from what I can tell, there is a $25,000 minimum.  So, if that's the case, then I will probably have to decide between VDE or XLE.  Right now, I'm leaning towards XLE.  Neither is a real good replacement for VGENX as VGENX seems to be more international and XLE appears to be more domestic with 37 holdings and VDE is also more domestic with 163 holding (the last time I looked). 

Thanks for your reply.

I didn't find an ETF substitute for Vanguard's Total International Stock Index fund, which has an expense ration of 0.27%.  It looks like expenses for anything international are quite a bit more than the domestic counterparts, so this may be about as good as it gets.  I went with Vanguard for both four mutual funds plus the ETFs, so my situation was a bit different than yours.

Scott Burns may have some good advice about the total international stock building block, as well as the energy sector fund or ETF.  Other than poking around in Morningstar or similar, I wouldn't know how to pick a good ETF or fund apart from a recommendation from a trustworthy source.

I don't remember when they raised the minimum but Vanguard Energy (VGENX) at one time had the standard minimum investment for a Vanguard fund, $3,000. The $25,000 initial minimum would be a reach for most investors.

Also, while there are periods during with the Vanguard managed fund has done better than the two energy index funds, VDE and XLE, a chart comparison over the last five years shows that they are all neck and neck:

http://finance.yahoo.com/q/bc?s=VDE&t=5y&l=on&z=m&q=l&c=XLE,VGENX

That established, the better buy is VDE. It has the lowest expense ratio and can be purchased with a brokerage commission rather than a higher mutual fund commission.

Scott

Much thanks, Scott.  If I had it to do over, I would do as you suggested, and I learned a good method for fund comparison..  In a few months, I plan to move the whole portfolio into an AB account, so the issue will go away for me.  My (your) 10-speed id doing fine, but AB should do even better.    Your columns and good advice are greatly appreciated.

One thing to remember here is that the Couch Potato focus is on simplicity and low expenses, not perfection in asset allocation.

So for Total International Stock Market you can use Vanguard Europe Pacific (ticker:VEA) or I Shares MSCI EFA (ticker:EFA). It would also be possible to use the recently introduced Vanguard FTSE All World ex USA (ticker:VEU). There are differences in composition, but any one will serve as the broad brush stroke asset class.

Energy, as many have pointed out, can appear to be problematic. The Vanguard managed energy fund, VGENX is inexpensive, has a good track record and appears to be broader based than VDE or XLE which are highly concentrated in mega cap domestic energy companies.

I think it is reasonable to be concerned with the dominance of the portfolio by gigantic companies, e.g. Exxon-Mobil is 20 percent of the XLE/VDE portfolio, Chevron follows with nearly 11 percent, but domestic all companies, by their nature, are as international as any foreign headquartered energy company so I don't think the domestic concentration is a liability.

Some would say it is favorable, since it means some small domestic exploration and production companies get included in the index. Personally, I like the inclusion of companies like Marathon, Devon, Apache, and XTO.

Time will tell whether the substitution of the international bond fund BWX ETF for managed BEGBX is a good move. My bet is that indexing will out.

Scott