By: Revanche

2017 Money Move: Vanguard and cleaning up my holdings

November 20, 2017

Mimicking my favorite tax blogger Kay Bell’s “Moves to make” posts, I’m making some moves before the end of the year to maximize our tax efficiency, minimize our expenses, and ensure we’re saving / investing as much as we can for retirement.

Step One – examining Vanguard accounts!

My Rollover IRA has held my retirement contributions since 2007, and my personal rate of return over that time has been 10.4%, but the fund selections are really outdated.

Over the past decade, as my contributions grew, I’ve shifted from holding Investor Shares to Admiral Shares which have a much lower expense ratio but that was only true for two of my five funds:

  1. VFIAX Vanguard 500 Index Fund Admiral Shares
    Expense ratio: 0.04%, Asset class Domestic Stock – General
    Category Large Blend
  2. VTIAX Vanguard Total International Stock Index Fund Admiral Shares
    Expense ratio: 0.11%, Asset class International/Global Stock
    Category Foreign Large Blend
  3. VFINX Vanguard 500 Index Fund Investor Shares
    Expense ratio: 0.14%, Asset class Domestic Stock – General
    Category Large Blend
  4. VEIEX Vanguard Emerging Markets Stock Index Fund Investor Shares
    Expense ratio: 0.32%, Asset class International/Global Stock
    Category Diversified Emerging Markets
  5. NAESX Vanguard Small-Cap Index Fund Investor Shares
    Expense ratio: 0.18%, Asset class Domestic Stock – More Aggressive
    Category Small Blend

The holdings in the Emerging Markets fund are no winners – the expense ratio is way too high, the performance in that fund dropped substantially, and they don’t seem to hold anything in the areas that make sense for emerging markets. Toodle-loo!

It was sheer carelessness to be paying Investor Share expense ratios for the 500 Index Funds when I also have the Admiral Shares fund. Toodle-loo!

I’d like to keep the Small Cap fund but not at the 0.18% fee, and they have an Admiral Shares option with a $10,000 minimum so it made sense to roll everything else into the Admiral Shares fund – meeting the minimum balance and slashing my expenses substantially.

VFINX + VEIEX + NAESX –> VSMAX

I could probably make a case for simplifying even further and dumping my 500 Index Fund and Small Cap in exchange for the Total Stock Index Fund but I’d want to do a touch of research before making that move.

Or maybe I should just throw caution to the winds and go for it.

:: Where do you hold your retirement money? Do you rebalance or adjust that portfolio regularly?

8 Responses to “2017 Money Move: Vanguard and cleaning up my holdings”

  1. I moved all of my accounts to Vanguard this year (I had some with a brokerage account) and that meant that I really cleaned up my allocations. I got rid of a bunch of high expense mutual funds my mom had left (and I had left untouched) and traded out for VFIAX and their total bond index fund, with Admiral shares of both. I still have a fair amount of individual stocks and bonds, but the stocks are in DRIP mode and I’m just holding the munis until maturity. I feel like my stock/bond allocation is good for the moment, but I’m sitting on more cash than usual for a bit.

  2. I don’t. I should, but I don’t. I mostly don’t even rebalance with new money.

    Those investor fund fee ratios look high compared to my investments, so I’m fairly sure I’m in admiral funds (and the target fund because I’m lazy) with Vanguard stuff and I’m in “Spartan” (I guess they’re not called that anymore?) funds with our Fidelity stuff.
    nicoleandmaggie recently posted…Switching away from Roth to Traditional retirement savings as a form of protest– even if it is suboptimal monetarilyMy Profile

  3. bethh says:

    I’m all Vanguard with my rollover stuff; of those funds I’m mostly in VTSAX (their total stock market fund, admiral version). I have some money with them in VTIAX (international fund, admiral version) and I have one Roth with them that’s not over the 10k line so it’s in the non-Admiral version of the total stock market fund. I took a page from Jim Collins to go mostly all in with VTSAX.

    I should call Vanguard, though, because I have five different types of accounts with them and I don’t know if I need to. I have: Traditional IRA, Rollover IRA, Roth IRA, and also Roth IRA brokerage account and Rollover IRA brokerage account. And I have no idea why it’s like this or if it needs to stay that way!

    I also have current work-related retirement accounts with Fidelity, and once upon a time I was in a 457 and that account is held separately because so long as I leave it alone, I can access the $$ penalty-free before I’m 59 1/2. Right now there’s enough in there to fund two years of early retirement – woot! It feels like my secret weapon.

    • Revanche says:

      I’d be interested to know if you really need all those accounts, too. It’d be great to simplify that if you don’t need them.

      Woot for 2 years of early retirement money!

  4. Leigh says:

    I usually check in every year when making a plan for the next year. I used to check in more often, but I’ve worked to not check quite as often. In my 401(k), I actually use a higher expense ratio total stock market index fund instead of the cheaper S&P 500 index fund because philosophically, I prefer to hold the entire market and I don’t want to deal with finding the ratios of the extended market index fund to balance it with. My husband’s 401(k) doesn’t allow for that choice and it’s probably only about a tenth of our overall portfolio at this point, so he’s elected to just use the S&P 500 index fund there and count it as total stock market. I wish my 401(k) was also at Vanguard as it would make it much easier to see the entire portfolio!
    Leigh recently posted…Married Finances: One Year InMy Profile

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