Selling Large Fee Asset Allocation

[ferco]

Need to do a little "tweaking" of a part of the portfolio and need suggestions. Planning to do MAJOR shift to Vanguard. Present allocation is:

USAZ Oppen Emerging Growth 10%
Seligman Small Cap Value 9%
USAZ OCC Renaissance 9%
Franklin Lg Growth Secs 9%
USAZ Oppenheimer Int'l Growth 11%
USAZ OCC Value 10%
USAZ Van Kemp Comstock 10%
Franklin Real Estate 11%
Dreyfus Stock Index 10%
Jennison 20/20 Focus 11%

I'm looking to sell all and probably go with:

Vanguard Wellington 70%
Vanguard Total Int'l Index 10%
Vanguard REIT Index 10%
Vanguard Emerging Markets 10%

I plan to leave it for 14 years w/ estimated 7-8% growth. Any thoughts?

 

[JPatrick]

Without knowing your age or other asset info, I'd just mention the following.
I'd be inclined to have 30% in foreign funds.  The simple way to do that would be to add to the total int'l.
That would leave 60% in wellington.  A bit much for me, but without more info it's hard to recommend further.

 

[Spanky]

Expected return based on last 8 years of data:

Input:

Vanguard Wellington 70% VWELX
Vanguard Total Int'l Index 10% VGTSX
Vanguard REIT Index 10% VGSIX
Vanguard Emerging Markets 10% VEIEX

Expected return:
Annualized
Mean Rtn Volatility Annual Return
VWELX 7.6% 9.4% 7.4%
VGTSX 7.6% 15.9% 6.6%
VGSIX 13.3% 14.3% 12.8%
VEIEX 14.3% 24.7% 12.0%

Portfoliio 8.8% 10.5% 8.6%

 

[sgeeeee]

Expected return based on last 8 years of data:

Input:

Vanguard Wellington  70%  VWELX
Vanguard Total Int'l Index  10%  VGTSX
Vanguard REIT Index 10%   VGSIX
Vanguard Emerging Markets 10%  VEIEX

Expected return:
             Annualized 
              Mean Rtn    Volatility  Annual Return
VWELX       7.6%        9.4%        7.4%
VGTSX       7.6%        15.9%       6.6%
VGSIX       13.3%       14.3%       12.8%
VEIEX       14.3%       24.7%       12.0%

Portfoliio   8.8%        10.5%       8.6%

What do you mean by "expected" return? I assume that is some kind of projection. Are you also assuming annual rebalancing?

 

[JPatrick]

Expected return based on last 8 years of data:

Input:

Vanguard Wellington  70%  VWELX
Vanguard Total Int'l Index  10%  VGTSX
Vanguard REIT Index 10%   VGSIX
Vanguard Emerging Markets 10%  VEIEX

Expected return:
             Annualized 
              Mean Rtn    Volatility  Annual Return
VWELX       7.6%        9.4%        7.4%
VGTSX       7.6%        15.9%       6.6%
VGSIX       13.3%       14.3%       12.8%
VEIEX       14.3%       24.7%       12.0%

Portfoliio   8.8%        10.5%       8.6%

Spanky - Where did you dig up your data and what is the ending date of your 8 year span??
BTW nice avatar 

 

[Spanky]

The data is from Yahoo. Expected return is based on monte carlo simulation. May be we should call it past return since we cannot predict that the future return will follow that of the past.

Here is the method of getting data for Vangaurd Health-care:
http://chart.yahoo.com/table.csv?s=VGHCX&a=1&b=26&c=1998&d=1&e=26&f=2006&g=m&q=q&y=0&z=VGHCX&x=.csv