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All-In-One Funds - Suitable for the Busy Investor

The mutual fund industry has a relatively new packaging scheme designed for the investor with little or no time to manage his or her portfolio. The new funds have the catchy names such as all-in-one, life style, life cycle and retirement target funds. The idea is to package different mutual funds into one fund that is oriented toward the investment objectives for an investor. The funds designed for long-term investor who has many years before retirement are weighted toward stocks to ensure growth. The funds for the investor who is about to retire or has already retired are weighted toward bonds to ensure income.

Usually a fund manager does not routinely change the mix of bonds and stocks in a fund. But most all-in-one funds regularly rebalance the mix of stocks and bonds. For example, a fund designed for people who plan to retire in 2045 will hold mostly stocks in 2005. But the allocation will shift more and more to bonds as 2045 nears. Periodic rebalancing of stocks and bonds by the fund manager is a selling feature of all-in-one funds because investors are relieved of that burden.

Vanguard All-in-One Funds

The ten all-in-one funds from Vanguard are featured in the following table. These funds are composed of other Vanguard passively-managed index funds so the fees of the all-in-one funds range from only 0.21% to 0.26%. Fees of similar funds from other mutual fund companies run as high as almost 1%.

The four Vanguard LifeStrategy funds do not adjust the mix of stocks and bonds. But the six Target Retirement funds do periodically change the stocks and bonds mix.

Vanguard All-in-One Funds
Fund	Symbol	Fund Components	% Stocks	% Bonds
Vanguard LifeStrategy Income	(VASIX)	Vanguard funds: Total Bond Market Portfolio, Asset Allocation Fund, Short-Term Corporate, and Total Stock Market Index	20%	80%
Vanguard LifeStrategy Conservative Growth	(VSCGX)	Vanguard funds: Total Stock Market Portfolio, Total International Portfolio, Asset Allocation Fund, Total Bond Market Portfolio, and Fixed Income Securities Fund - Short-Term Corporate Portfolio	40%	60%
Vanguard LifeStrategy Moderate Growth	(VSMGX)	Vanguard funds: Total Stock Market Portfolio, Total International Stock Index Portfolio, Total Bond Market Portfolio, and Asset Allocation Fund	60%	40%
Vanguard LifeStrategy Growth	(VASGX)	Vanguard funds: Total Bond Market Index, Asset Allocation, Short-Term Corporate, Total Stock Market Index, and Total International Stock Index	80%	20%
Vanguard Target Retirement Income	(VTINX)	Vanguard funds: Total Bond Market Index, Inflation-Protected Securities, Total Stock Market Index and Total Stock Market VIPERs	20%	80%
Vanguard Target Retirement 2005	(VTOVX)	Vanguard funds: Total Bond Market Index, Total Stock Market Index, Inflation-Protected Securities, and Total Stock Market VIPERs	35%	65%
Vanguard Target Retirement 2015	(VTXVX)	Vanguard funds: Total Bond Market Index, Total Stock Market Index, European Stock Index, Pacific Stock Index, Total Stock Market VIPERs, and Inflation-Protected Securities	50%	50%
Vanguard Target Retirement 2025	(VTTVX)	Vanguard funds: Total Stock Market Index, Total Bond Market Index, European Stock Index, Vanguard Pacific Stock Index and Vanguard Total Stock Market VIPERs	60%	40%
Vanguard Target Retirement 2035	(VTTHX)	Vanguard funds: Total Stock Market Index, Total Bond Market Index, European Stock Index, Pacific Stock Index and Total Stock Market VIPERs	80%	20%
Vanguard Target Retirement 2045	(VTIVX)	Vanguard funds: Total Stock Market Index, European Stock Index, Total Bond Market Index, Pacific Stock Index and Total Stock Market VIPERs	90%	10%
Fund components and stock and bond percentages as of February 23, 2005.

Other mutual fund firms that offer all-in-one funds include: American Century, T. Rowe Price, and Fidelity. Their fees tend to be significantly higher the Vanguard's fees.

Updated on February 24, 2005