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Vanguard Managed Payout aka Harvard Endowment Funds
Old 10-31-2007, 02:15 PM   #1
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Vanguard Managed Payout aka Harvard Endowment Funds

Havent seen this thrown about over here yet, but its everywhere else.

Vanguard to Broaden Retirement Income Solutions with Three New Managed Payout Funds - - insurancenewsnet.com

Vanguard is launching a series of funds that offer managed payouts of 3%, 5% and 7%, while suggesting they'll attempt to maintain the principal even or better than the CPI based inflation measure.

Fund mixes include US and international stocks, bonds, cash instruments, commodities, market neutral/hedge funds, etc. An expense ratio in the mid .3x range is expected. Fund mixes are the same, with different size allocations depending on how much you want paid out. The 7% fund will invest in larger chunks of the riskier elements while the 3% fund more conservatively allocated.

I find these funds realllllly interesting and barring any weird changes or late discoveries of displeasing aspects, will probably consider at least a partial investment in them.

They're essentially self directed annuities, except you get to keep the principal and you dont get the benefit of sharing market risk with a million other insurance company customers. In any case, the broad diversification, including into areas like commodities and market neutral funds that vanguard hasnt traditionally offered, is interesting. Think of it as target retirement funds on steroids with higher payouts.

I'm really interested in HOW they distribute, presuming a mix of interest/dividends, qualified dividends, and capital gains.

Some discussions at bogleheads and morningstar.

Bogleheads :: View topic - new VG fund
Bogleheads :: View topic - InsuranceNewsNet: Vanguard's New Managed Payout Funds

Morningstar Discuss
Morningstar Discuss
Morningstar Discuss

They were originally launched as the "vanguard managed payout" funds, but were later renamed "The vanguard harvard endowment" funds, or somesuch. Interesting branding.
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Old 10-31-2007, 02:19 PM   #2
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Well fooey, and nevermind. This has been discussed already. The search I did didnt match up with the couple of other threads already inflight.
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Old 10-31-2007, 08:06 PM   #3
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Link to other thread?
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Old 10-31-2007, 08:10 PM   #4
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http://www.early-retirement.org/foru...ard-30786.html

Vanguard Retirement Payout Funds

Probably others. Its tough to search for some things unless you're willing to weed through a lot of chaff.

The threads on the Diehards board pretty much beat this to death. I think the synopsis is that the trueblue vanguard indexers/bogleheads think all of this international/commodity/etc stuff is ridiculous and all you need is the s&p500 and some tips. Others who are into slicing and dicing and more exotic options are excited by this option. Seems cheap for what it is, since access to commodity and hedge funds can get pretty spendy.


I'd lose about 17 basis points per year going from my ridiculously cheap portfolio setup, but I'd pick up all the rebalancing and distribution stuff and some broader diversification. Not bad.
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