We have developed two portfolios for you to consider. Each one incorporates Vanguard’s investment philosophy, including a commitment to maintain broad diversification. However, each portfolio goes about it in a different way. Both portfolios strive to match your target asset allocation within acceptable ranges, and depending on your objectives, you may find one portfolio more suitable to your style.
Integrated Portfolio
The Integrated Portfolio maintains current holdings where possible while integrating them into a diversified portfolio. This approach is suitable for clients who have a preference for and are comfortable with their current holdings, but are looking to ensure they are properly diversified.
Consolidated Portfolio
Vanguard believes there are additional measures you can take to further enhance your chances for success over the long term provided you are willing to move more assets within your portfolio. This Consolidated Portfolio is also highly diversified, and may also offer these additional benefits:
- Lower annual portfolio costs. Vanguard funds charge a small fraction of the industry average to manage your assets. Because costs subtract directly from investment returns, this may result in a higher balance for you over the long term. (The projected impact of costs on your portfolio is illustrated in the Your retirement outlook section of this report.)
- Greater tax−efficiency. The taxes you pay on the distributions from your portfolio also detract from returns. Adjusting your portfolio to hold tax−efficient investments in taxable accounts can help minimize the impact taxes have on your portfolio’s returns.
- Simplicity. The convenience of consolidating your investments at one or only a few companies can greatly ease the management of your portfolio, as well as help with recordkeeping and tax preparation.
During your consultation, your financial planner will discuss both the Integrated and Consolidated approaches