Last update: February 8th, 2010

In our recommendations to investors, we are increasingly emphasizing exchange-traded funds (ETFs) over conventional mutual funds because of their lower costs and greater tax efficiency.

This table shows three different suggested asset allocations for stocks and bonds, for Aggressive, Moderate and Conservative portfolios, which will be followed in the tables below. 

(1) The Vanguard REIT fund has a 1% fee on sales of shares held less than one year.

(2) The Vanguard FTSE All-World ex-US Small-Cap Index fund has purchase and redemption fees of 0.75%.

(3) Vanguard Emerging Market Index fund applies a purchase fee of 0.50% and a redemption fee of 0.25%

(4) We recently changed the recommendation for the Vanguard Tax-Managed (TM) Equity Portfolio.  If you already held these three Vanguard Tax-Managed funds (TM Growth and Income, TM Small Cap and TM International), you should know your holding period before making any trading decisions.  These three funds apply the 1% redemption fee if held less than five years.

(5) We don't have the recommendation for the Vanguard Tax-Managed Moderate and Conservative portfolios since the tax situation varies from person to person.

(6) We recommend managing portfolios on a total rate of return basis, with the total return coming from interest on bonds, dividends on stocks, and potential price appreciation from the securities in the portfolio.  Withdrawals from a total return portfolio may come from both income and principal.  The monthly income portfolio is designed for those investors who want to generate income from the portfolio, without withdrawing any principal.  In order to generate reasonable levels of income, we are including allocations to investment grade corporate bonds, high yield corporate bonds, and Ginnie Mae mortgage securities, bond types which are not included in our total return portfolios.  The Vanguard High-Yield Corporate Fund assesses a 1% fee on shares held less that one year.