Aug

27

I know Rocky has mentioned the Vanguard star fund (VGSTX) as a good long term investment vehicle. I was looking at the Vanguard site and notice that they also offer what is called the "Vanguard Balanced index fund admiral shares" (VBIAX). The performance is almost identical to the star fund, however the fee is amazingly low vs. very low (9 basis points vs. 35 basis points) so I figured it was worth mentioning.

Alex Castaldo clarifies:

They are very similar. The main difference is that VBIAX is allocated 60% stocks, 40% bonds. The star fund, VGSTX, according to the Vanguard web site, is 62% stocks, 25% bonds and 13% short term reserves. So the latter has some money market instruments and low duration bonds in its fixed income positions that the former does not have.

Another difference is that the stock allocation for VBIAX is entirely domestic (modeled after the CRSP US total market index), while VGSTX includes an international (non US) stock component. The 62% in stocks I mentioned earlier breaks down into 44% domestic stocks plus 18% international stocks.


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