Originally Posted by bentley
Reads very closely like the Vanguard Managed Payout Funds.
Vanguard and Schwab have three slightly different funds that payout different % based on equity exposure, ranging from 3% to 6% +/-.
I wonder if anyone else has considered a strategy of putting 33% of your portfolio into each fund.
Assuming a portfolio of 1.5 mm, then $500k into each style. That provides a decent income along with a somewhat enhanced equity exposure.
How dumb is this idea? and why?
If you're looking for something in the middle, why not just buy the "middle" fund and deal with a single fund rather than 3?
In any event, I currently use a garden variety Schwab managed account, and can say that they're just about average in comparison with other managed accounts in terms of performance. Not that any other comparable fund is really much better.... Schwab, however, does not use any tax reduction strategies. They just shoot for the highest taxable return.
This idea of combining income and growth in a single fund may be reasonable. IMO, anything that cuts down on the number of accounts that need to be monitored by typical investors, is probably a good thing. I haven't looked at the prospectus, but it's going to be key to check the fees charged for these funds, of course.