Daniel Straus Vanguard Conservative ETF Portfolio VCNS-T COMMENT May 16, 2018

A conservative balanced portfolio. Until you have a full year of dividends, it is hard to know what the full dividend payout is going to be over a year, It will be the trailing yield that is published with the ETF. You are getting diversified exposure, globally. Don’t look at the dividend yield. Try annualizing the last quarterly distribution over a year.

VGRO-T vs. VBAL-T vs. VCNS-T. They are the total solution portfolios. If you hold all of them your blended portfolio is the same as VBAL-T, (60/40). VCNS-T gives you much more protection from the equity markets. VGRO-T is for when you don't need protection.

VGRO-T vs. VBAL-T vs. VCNS-T. Would the three be enough for a retirement portfolio? VGRO-T is 80% equity, 20% bonds; VBAL-T is 60% equity, 40% bonds; and VCNS-T is 40% equity, 60% bonds. Don't hold them together. They hold the same thing at different proportions and equate to VBAL-T if all held equally. Move between them as market conditions dictate.

Once stop portfolio (ETF composed of ETFs).
Conservative composure (60% fixed income, 40% equity).
2022 hard on the traditional 60/40 portfolio - but will improve.
Good for defensive investors (40% of equity exposure).

One-stop solution, set it and forget it, 80/20 split. Conservative, multi-asset ETF.

Very low fees of 19-20 bps. Holds other Vanguard ETFs. During significant drawdowns between mid-July to August 1, this ETF was down less than 3%. A way for a conservative investor to set it and forget it.

Investing time horizon is long, 10 years in this case. So that lets you take on a bit more risk. Though you'll find 10-year timeframes in the equity market that have delivered losses, that makes the balanced portfolio of stocks and bonds so important.

If you don't want fluctuations at all, there's always cash or a money market fund. But for this time horizon, consider using an ETF with growth potential. For a conservative investor, think about VGRO or VBAL. VGRO is more aggressive, at 80 stocks/20 bonds. VBAL is more balanced at 60/40.

VCNS is for the very conservative, mostly bonds with a bit of equity. It will still grow over time because of the equity allocation, but will be more stable. You could even mix in more bonds yourself. Consider working with a professional on this for a diversified portfolio.

You need a higher return than a bond is going to give you today to keep up with inflation and grow your savings. Alternative ETFs such as ZWU, VCNS, ZWB, ZWC, and PJAN are what's needed to protect your portfolio, rather than conventional bonds. 

These are what you need to generate the income you'll need for retirement, to get a real return on your investment, more than just protection of principal.