Entering text into the input field will update the search result below

Performance Of Low-Risk Vanguard Portfolio Year To Date

Charles Bolin profile picture
Charles Bolin


  • The February Vanguard Model Portfolio is updated with the recent data from turbulent markets to see how it has held up.
  • Mutual Fund Observer Risk and Performance Metrics are updated through February.
  • I have combined the February Model Portfolio with my own portfolio and plan to use it as a target portfolio.


Monday was an enlightening day with the S&P 500 falling 7.6%, real estate falling 4% to 5%, corporate bonds falling 0.8% to 2%, and gold was not much protection. Tuesday was a choppy day with the S&P 500 rising 4.9%. As I conclude this article, Wednesday stock futures appear set to continue the roller-coaster ride. Granted, coronavirus and oil price wars are serious matters, but in my opinion, high frequency trading is a major contributor to the recent volatility.

Last month, I wrote, Developing A Low-Risk Vanguard Portfolio For This High-Risk Environment which built a lower-risk model portfolio containing roughly 40% stocks. Vanguard advocates a globally diversified portfolio. Their philosophy is:

Although the asset allocation decision is one of the cornerstones for achieving an objective, it only works if the allocation is adhered to over time and through varying market environments.

Investment Model

I vary my allocation according to the business cycle as shown in Chart #1. The model is built using over 30 main indicators which show slowing orders, production, and shipping. The current allocation (dark blue line) to stocks is near my minimum of 20%. Most data from the impacts of the coronavirus are not yet available. My base case is that there will be a slow down in the economy for a couple of quarters, but then the global economy will resume its path of recovery. I remain conservative until the direction is more firmly established. A recession is possible, but with global low interest rates and fiscal stimulus, it may be enough to avoid a recession, depending upon the extent of the coronavirus and oil price wars.

Chart #1: Investment Model

Source: Author

Mutual Fund Observer

Each month, I extract about a thousand funds using Mutual Fund Observer and rank them based on Risk, Risk-Adjusted Return, Momentum, Income, and Quality (Valuation, Performance

This article was written by

Charles Bolin profile picture
I use Mutual Fund Observer MultiSearch as the primary tool to analyze and rank funds based on risk, momentum, quality, income, and consistency factors. I classify nearly 300 funds each month by investment buckets for risk and trends. I began contributing to the MFO monthly newsletter in 2019.I retired in June 2022.  I am an individual investor and retired engineer with an MBA.

Analyst’s Disclosure: I am/we are long VFIJX, VFISX, PRSNX, VBILX, VEMBX, VTABX, VWIAX, VFICX, VMVFX, VWELX, VGWLX, VPGDX, IAU, VEMAX. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

I am an engineer with an MBA nearing retirement and not an economist nor an investment professional. The information provided is for educational purposes and should not be considered as advice. Investors should do their due diligence research and/or use an investment professional. In September 2019, I began contributing to the Mutual Fund Observer monthly newsletter.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (34)

Michael de la Maza profile picture
@Charles Bolin Any idea how VUBFX (Vanguard Ultra-Short) can be down in this environment?
Charles Bolin profile picture
@Michael de la Maza
I am looking at VUBFX and four other Ultrashort Bond Funds. VUBFX, BUBSX, and FCONX are all positive year to date while LUBAX and GIYAX are not. For the last thee month, VUBFX and BUBSX are down 0.52 to 0.56% while the other three are down more than 1%.

The drop in the value of funds occurred during the last two weeks of March which coincides with the recovery of the stock market. Here is a good answer from 2008: "Like beaten-up funds in other categories, many ultrashort funds own securities tied to the performance of the housing market and, as it became clearer that that area was running into trouble, these bonds started flailing." Similarly, real estate was down a lot in March.

Will you be updating the above 2 portfolios to see how they have reacted based on the increased volatility exhibited since the beginning of March? It would be interesting to see how much drawdown these portfolios have exhibited given the 10% moves we have seen on an almost daily basis.

Thank you.
Charles Bolin profile picture

Thanks for your interest. I am writing an article now that looks at the Vanguard Portfolio, and two similar Fidelity Portfolios for Mutual Fund Observer and it should be published April 1st. It is free to subscribe or you can go look at it at the link below.


I would like to write an article for Seeking Alpha if I have time next weekend. Below are the funds in the Vanguard Target Portfolio along with SPY for reference. The Target Portfolio is at the bottom. YTD the Vanguard Target Porftfolio lost 5.8% compared to 20.9 for SPY. For the past year, the Vanguard Target Portfolio made 2.5% compared to -6.8% for SPY.

Symbol Shares 1Wk 1Month YTD 1Year
SPY 0 -9.5 -21.8 -20.9 -6.8
IAU 2800 -9.1 -3.5 0.3 15.8
PRSNX 4300 -5.1 -5.9 -4.7 2.3
VBILX 9000 -3.6 0.5 2.6 10.5
VEMAX 1300 -10.3 -17.7 -18.6 -11.3
VEMBX 3400 -8.7 -8.2 -6.2 3.6
VFICX 0 -3.9 -1.2 0.6 8.3
VFIJX 6400 -1.3 0.1 0.8 5.5
VFISX 9900 -0.3 1.6 2.0 5.1
VGSTX 1200 -8.7 -14.8 -12.0 -1.2
VGWAX 2000 -9.6 -15.2 -14.1 -2.7
VMVFX 3800 -11.7 -19.4 -16.3 -5.7
VPGDX 5900 -8.6 -14.0 -13.4 -6.4
VTABX 2100 -2.4 -0.8 1.0 6.7
VWELX 2500 -7.8 -13.6 -11.3 0.7
VWIAX 2200 -6.7 -8.3 -6.2 3.4
Portfolio -6.0 -7.4 -5.8 2.5
Charles - Thanks for responding so quickly. What does the column shares represent?
Charles Bolin profile picture
Sorry @todd1320

I entered the portfolio into Morningstar as an approximately hypothetical million dollar portfolio based on prices about a month ago. That is the number of shares of each fund. The % allocation is in the article.
Thanks for your good work once again. For the safety and 1-2 year categories, I'm finding FDIC insured CD's yielding 2%. That's good enough for me and higher than the yields on the other "safe" options especially with little risk of higher inflation on the horizon.
Charles Bolin profile picture
After this week, CD's are looking much better. I still own a few. Thank you.
Considering inflation and taxes, how CDs are good?
Charles Bolin profile picture
Safety. Preservation of investment. They are doing better than stocks and most bonds.
Do you have table # 3 covering ETFs?
Charles Bolin profile picture
ETFs are in the right hand column of Table #3. I did not include a table specifically for ETFs but produce it each month as part of the process.
I was looking for ETFs by providers.
Charles Bolin profile picture

Here are 30 of my top ranked ETFs as of February:

SLQD BlackRock iShares 0-5 Year Invest Grade Corp Bond
SCHR Schwab Intrmdt-Term US Treas
SPIB State Street SPDR Portfolio Intrmdt Term Corp Bond
VGSH Vanguard Short-Term Treas Index
AGZ BlackRock iShares Agency Bond
VCSH Vanguard Short-Term Corp Bond Index
AGZ BlackRock iShares Agency Bond
FTSD Franklin Liberty Short Duration US Gov
VPU Vanguard Utilities Index
VGIT Vanguard Intrmdt-Term Treas Index
SPSB State Street SPDR Portfolio Short Term Corp Bond
IGIB BlackRock iShares Intrmdt-Term Corp Bond
SCHO Schwab Short-Term US Treas
IBDP BlackRock iShares iBonds Dec 2024 Term Corp
XLU State Street Utilities Select Sector SPDR
ISTB BlackRock iShares Core Short-Term USD Bond
VNLA Janus Henderson Short Duration Income
CEMB BlackRock iShares JP Morgan EM Corp Bond
ICSH BlackRock iShares Ultra Short-Term Bond
GNMA BlackRock iShares GNMA Bond
TIPX State Street SPDR Bloomberg Barclays 1-10 Year TIPS
SPTI State Street SPDR Portfolio Intrmdt Term Treas
FLRN State Street SPDR Bloomberg Barclays Invest Grade Float Rate
CLTL Invesco Treas Collateral
NEAR BlackRock iShares Short Maturity Bond
SPIP State Street SPDR Portfolio TIPS
LDUR PIMCO Enhanced Low Duration Active Exchange-Traded
QLTA BlackRock iShares Aaa - A Rated Corp Bond
EMTL State Street SPDR DoubleLine EM Mark Fixed Income
AGG BlackRock iShares Core US Aggregate Bond
FLTB Fidelity Limited Term Bond
SHV BlackRock iShares Short Treas Bond
SHAG WisdomTree Yield Enhanced US Short-Term Aggregate Bond
HYMB State Street SPDR Nuveen Bloomberg Barclays High Yield Muni Bond
11 Mar. 2020
Why is VTBIX and BND falling every day this week regardless of whether the S&P is up big or down big?
Charles Bolin profile picture
Thanks for reading and asking a great question. Both VTBIX and BND hav about 30% in long term bonds. As the yield falls, the percentage change on long bonds becomes a larger factor (ie 0.1%/3% and 0.1%/1%). Secondly, they both own about 25% corporate bonds. Investors are worried that companies hit by the coronavirus or oil wars are leveraged up and won't be able to make interest payments, perhaps even going into bankruptcy.
Great article Charles but I have a more fundamental issue. The biggest surprise I have had in the correction this week is the erosion of corporate bond prices pretty much across the board, not as much as stocks but it still got my attention. As stocks sell off the expectation is for bonds to increase in value or at least remain the same. To have bond prices correlated with stocks in any meaningful way destroys the whole philosophy of a balanced portfolio. High yield junk bond price erosion is expected but not investment grade. Even DODIX and VFIIX have taken hits this week and it has been even more significant for VCIT and VCLT. What is your take?
11 Mar. 2020
It's crazy. How does a retiree simply protect nominal principle at this point? Should one go 100% cash?
Charles Bolin profile picture
As always, thanks for your insights @Steve Hastings

I don't claim to be an expert on this, but I believe there are several factors happening. The first is the drop in interest rates, heading toward zero. I think the fear of coronanvirus caused interest rates to overshoot. This week the 30 year treasury fell from 1.6% to 0.7% which is a 57% drop in long duration bonds. The 30 year treasury then climbed back to 1% for an increase of 30% from the lows. These are tremendous changes for a long duration bond. The second thing impacting DODIX is that it has 25% investment grade bonds, mostly BBB. If we do go into a recession, oil companies in particular may also have difficulty making interest payments. Corporations now have a high level of debt and some analysts write about the poor quality of debt. One final factor is that with global easing, currencies are fluctuating several percent adding more volatility.

I like DODIX and it is one of my larger holdings. I think it is important to keep the bigger picture in mind. DODIX is up 1.5% year to date and 9% for the past 1 year. I have concerns over federal debt being so high and want to diversify across many of the "safer" assets. I just flipped through about a thousand funds in my Morningstar watch lists. Most bond funds are up for the last month.
Charles Bolin profile picture

As I have written over the past year, the stock market is over valued and due for a correction. I think the current correction is based on a lot of fear. Like in this article, I have less than 35% in stocks, and what is in stocks, I have tried to have lower volatility funds and diversity.

For me, preservation of capital is more important than trying to squeeze extra returns from over valued assets. Cash and quality bonds are good places to be. Having a set allocation for your risk tolerance and sticking to it is the best way to go. That way you don't miss out when the market starts rising.

Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.