Vanguard Funds for 2016

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    Dear TS Paul and subscribers,

    Would you talk about the Vanguard funds you like for 2016. I have a bunch of money there. Do you have preference for Large Cap or Growth for 2016?

    Appreciate suggestions.

    TS Paul

    For my Thrift Savings Plan equivalents, for large cap I use VOO, which is the Vanguard 500 Index Fund. The expense ratio on this is a ridiculously low 0.05%.

    If you prefer mutual funds, VFIAX is the matching admiral shares ($10,000 minimum) fund. This one is also available as VFINX which is the investors shares version ($3,000 minimum). I generally prefer ETFs to mutual funds, but because I had a mutual fund account set up with Vanguard from many, many years ago, I’ve maintained that and invest only in Admiral shares.

    I typically go with the straight large cap fund rather than playing with the large cap growth (VOOG) or value (VOOV) funds. On occasion if I feel that one is really undervalued compared to the others, I will put some money in there, but the vast bulk of my investments go into VOO during this phase of the business cycle.

    The TSP Allocation Guide

    richard smith

    What do you think of the Vanguard Healthcare Fund Investor Shares? This is where I have my outside investments. It has had outstanding returns since its’ inception and regularly has double digit returns with a .34 expense ratio.

    TS Paul

    Hindsight being what it is, I’ve kicked myself for not being in any healthcare specific funds or ETFs the last few years. I certainly knew that the ACA was going to have an effect on that sector, but didn’t ever get smart enough to decide between the competing arguments for and against it. Now I suspect the big gains have already happened, but with the US’ aging population there may be a lot more run out there yet.

    As for VGHCX, that has had an awesome average annual return – one dated article I just skimmed claimed that it had the higher return of any Vanguard fund over the past 30 years.

    I would hesitate to take on too much exposure in a relatively narrow sector, but that one is definitely on my shortlist to look more closely at and may well wind up in one of my Vanguard accounts.

    For anyone who does take a fancy to health care funds, make sure you note that he Vanguard Health Care ETF, despite the similar name, is a completely different fund (it is an index fund rather than actively managed), and has not done nearly as well as VGHCX.

    Thanks for the food for thought.

    The TSP Allocation Guide



    Have you compared price ratios of each fund over time against the overall market (VTSAX). Comparing the Value and Growth Indices against the general index for the Large, Mid and Small admiral funds reveals an inverse relationship between growth and value, especially in Mid & Small.

    I recently moved from the S&P index (VFIAX) , and other funds into Mid-Cap (VMGMX) & Small-Cap growth (VSGAX) indices. My decision was based on comparison of price ratios trends which indicated that these two funds are lagging the overall market, but had recently made upturns. I almost also went into large-cap growth (VIGAX), but decided against it because this fund seems to be is coming down from a historical high relative to the entire market.

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