Managed Accounts or DIY?

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Topic Author
cat5
Posts: 49
Joined: Mon Oct 14, 2013 12:01 pm

Managed Accounts or DIY?

Post by cat5 »

Hello forum:

Background:
1. I have a brokerage account and an IRA account under management with Vanguard. I am retired.
2. The brokerage account is a Legacy account. I do not need this $ to live off.
3. The IRA is a modest account left over from my first job. I do not need it to live off and I do not contribute to it any longer.
4. I opened a Managed account in spring 2020. I did not want many bonds in this account because I have a 401K plan invested very conservatively.

5. The original IRA was allocated to VTI, VBTLX, and 1 stock.
5. in 2020, an advisor exchanged VTI in the IRA for 4 bond funds and VXUS.
6. The new allocation for the IRA in 2020 was:
VG Intermediate term investment grade fund admiral shares VFIDX 11.1%
VG Short term investment grade fund Admiral shares VFSUX 7.4%
VG Total market Index fund Admiral Shares VBTLX 14.3%
VG total International Bond ETF BNDX 16%
VG Total International stock ETF VXUS 43.9%
1 STOCK 7.3% 1 stock 7.3%

The new scenario 2022: After consulting with the advisor in 2022, a new plan was proposed:

VG Intermediate term investment grade fund admiral shares VFIDX 4.6%
VG Short term investment grade fund Admiral shares VFSUX 3.1%
VG Total market Index fund Admiral Shares VBTLX 7.7%
VG total International Bond ETF BNDX 6.6
VG Total International stock ETF VXUS 40.0%
1 STOCK 7.3% 1 stock 7.3%
VG US Growth Fund Admiral VWUAX 2.8%
VG Windsor II Fund Admiral VWNAX 2.8%
VG Strategic Equity Fund VSEQX 1.2%
VG Explorer fund Admiral VEXRX 1.2%
VG International Growth Fund Admiral Shares VWILX 11.4%
VG International Value Fund VTRIX 11.4%

My questions:
Some of the funds are actively managed. Low dollar denominations would be invested in each. Do you think it is worth the extra costs involved with having the funds managed? Is it too complicated?
Would it make a difference in the long run if I had this portfolio?
Do you think I could manage this myself using a simpler portfolio? a 3 fund portfolio? Can you suggest funds?

Thank you very much.

I could definitely use some direction.

cat5
mhalley
Posts: 10432
Joined: Tue Nov 20, 2007 5:02 am

Re: Managed Accounts or DIY?

Post by mhalley »

A long way from the 3 fund portfolio. The allocations of less than 5% don’t make sense imho. Very disappointing. Have you discussed with your advisor about how overcomplicated you think the portfolio is? I liked the one you had before going pas better.
If you think you can manage it yourself, you can post in the preferred format and we can give you a proposal.
https://www.bogleheads.org/wiki/Asking_ ... _questions
Topic Author
cat5
Posts: 49
Joined: Mon Oct 14, 2013 12:01 pm

Re: Managed Accounts or DIY?

Post by cat5 »

Thank you, mhalley, for your response. I appreciate your comment on the less than 5% allocations. I did express my concern to the advisor about the % allocations and the number of different funds. he responded that the actively managed funds could do quite well even with a small amount of funds! I would much rather not have that. Having your opinion supporting my feeling gives me more confidence in going forward and breaking the relationship with the advisor.

I will try to restate my portfolio and the particulars about my situation in keeping with the forum format for asking questions. It will take a little time to gather. In the meantime, I deeply appreciate your response. It gave me steam...

Cat5
pkcrafter
Posts: 15461
Joined: Sun Mar 04, 2007 11:19 am
Location: CA
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Re: Managed Accounts or DIY?

Post by pkcrafter »

cat5 wrote: Sun Jan 23, 2022 4:57 pm Hello forum:

Hello cat5,


Background:
1. I have a brokerage account and an IRA account under management with Vanguard. I am retired.
2. The brokerage account is a Legacy account. I do not need this $ to live off.
3. The IRA is a modest account left over from my first job. I do not need it to live off and I do not contribute to it any longer.
4. I opened a Managed account in spring 2020. I did not want many bonds in this account because I have a 401K plan invested very conservatively.

OK, overall what is your asset allocation?

5. The original IRA was allocated to VTI, VBTLX, and 1 stock.
5. in 2020, an advisor exchanged VTI in the IRA for 4 bond funds and VXUS.

?? Whaaat?


6. The new allocation for the IRA in 2020 was:
VG Intermediate term investment grade fund admiral shares VFIDX 11.1%
VG Short term investment grade fund Admiral shares VFSUX 7.4%
VG Total market Index fund Admiral Shares VBTLX 14.3%
Wrong ticker.

VG total International Bond ETF BNDX 16%
VG Total International stock ETF VXUS 43.9%
1 STOCK 7.3% 1 stock 7.3%

The new scenario 2022: After consulting with the advisor in 2022, a new plan was proposed:

VG Intermediate term investment grade fund admiral shares VFIDX 4.6%
VG Short term investment grade fund Admiral shares VFSUX 3.1%
VG Total market Index fund Admiral Shares VBTLX 7.7% Wrong ticker
VG total International Bond ETF BNDX 6.6
VG Total International stock ETF VXUS 40.0%
1 STOCK 7.3% 1 stock 7.3%
VG US Growth Fund Admiral VWUAX 2.8%
VG Windsor II Fund Admiral VWNAX 2.8%
VG Strategic Equity Fund VSEQX 1.2%
VG Explorer fund Admiral VEXRX 1.2%
VG International Growth Fund Admiral Shares VWILX 11.4%
VG International Value Fund VTRIX 11.4%

My questions:
Some of the funds are actively managed. Low dollar denominations would be invested in each. Do you think it is worth the extra costs involved with having the funds managed? Is it too complicated?

It's the oddest portfolio I've ever seen Vanguard recommend.
Would it make a difference in the long run if I had this portfolio?
[color=#0000BF No.[/color]

Do you think I could manage this myself using a simpler portfolio? a 3 fund portfolio? Can you suggest funds?
Yes, absolutely you can self-manage.

The 3-fund portfolio

viewtopic.php?f=10&t=88005

In tax-advantaged accounts you could also use target date funds or lifestrategy funds (Vanguard).

Paul



When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.
Topic Author
cat5
Posts: 49
Joined: Mon Oct 14, 2013 12:01 pm

Re: Managed Accounts or DIY?

Post by cat5 »

Hello PkCrafter,

Sorry for the hiatus in answering your questions:.

1. What is my asset allocation: My accounts under management at VG consisted of

1 brokerage legacy account: total International Index ETF VXUS 11.4%
total US Stock Mkt, ETF VTI 88.3%

1 Trad IRA: Intermediate term bond fund VFIDX 11.3
Short term bond fund VFSUX 7.5
Total Bond Mkt VBTLX 14.3
Total International Bond BNDX 16.3
Total Intl Stock ETF VXUS 43.3
1 STOCK 7.1

I do not know how to figure my AA in an overall way. This is not the only $ I have, but it is the $ I have put into the legacy account which I expect will have 20-30 years before it will be used or maybe more if it can be left to the 2nd generation of children.

I did not want to have so much INTL stock. The advisor said it would be better served in the IRA because it gives of greater dividends. The advisor said, if I added more $ to the legacy account, he would have to adjust the amount of intl stock in the IRA. But the IRA and the the legacy account are two separate entities, one is for me and the other is for heirs. The entire experience was disconcerting. But I do Not want to harp on the VG Advsior. It is ultimately my responsibility. I finally terminated my relationship with VG PAS. Now I am left to figure out what to do with those bond funds. Sell all, sell some, take the losses, redeploy assets into VTI, reduce or eliminate VXUS. I am not sure... A 3 or 2 fund portfolio would suit me fine.

Yes, I had the wrong name of the fund VBTLX should have been Total Bond Index Fund.

Thanks for your interest in my situation.
Best to you,
Cat5
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