# Lazy Portfolios



## Darc Knight (21 October 2018)

Anyone have any experience or thoughts on these?"

"_*Lazy portfolios* are designed to perform well in most market conditions. Most contain a small number of low-cost funds that are easy to rebalance. They are "lazy" in that the investor can maintain the same asset allocation for an extended period of time, as they generally contain 30-40% bonds, suitable for most pre-retirement investors."_

https://www.bogleheads.org/wiki/Lazy_portfolios

The one I'm looking at is the two Index Fund one, containing a Global Bond Index Fund and a Global Shares Index Fund. To me this overcomes some of the dangers of specific Index funds like S&P500 or ASX200 Index Funds, where the "narrowness" of the Fund inflates the share's value too far from their intrinsic value.

It may also allow for a bit of market timing by adjusting the percentage of Bonds to Shares holdings, for those into market timing.


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## barney (21 October 2018)

Darc Knight said:


> Anyone have any experience or thoughts on these?"
> 
> "_*Lazy portfolios* are designed to perform well in most market conditions. Most contain a small number of low-cost funds that are easy to rebalance. They are "lazy" in that the investor can maintain the same asset allocation for an extended period of time, as they generally contain 30-40% bonds, suitable for most pre-retirement investors."_
> 
> ...




Hey DK …. Not something I am personally invested in but appreciate your questions …. No doubt there will be some more prudent Investors with some useful input ….


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## greggles (21 October 2018)

It just looks like a portfolio of ETFs. Interesting. 

What would be a good ASX Lazy Portfolio of ETFs? Any suggestions?


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## Darc Knight (21 October 2018)

greggles said:


> It just looks like a portfolio of ETFs. Interesting.
> 
> What would be a good ASX Lazy Portfolio of ETFs? Any suggestions?




I think they'd be VAS (ASX300) and VAF (Aus F.I. Index Fund).

The reason I went global is due to things like ASX200 Index funds are increasing the Stocks within the ASX200 beyond their Intrinsic Value. Going global lessens the risk of Stock price exceeding Intrinsic value too much.


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## Darc Knight (21 October 2018)

And the combination of Bonds and Shares allows for adjustment of holdings depending on Market cycle.
Heck throw in a Property EFT such as VAP if you're game!


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## lenny (21 October 2018)

Have a look at Meb Faber's Ivy portfolio.


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## Darc Knight (21 October 2018)

lenny said:


> Have a look at Meb Faber's Ivy portfolio.




Interesting. 

I was looking at going global though.


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## Ann (21 October 2018)

My choice of ASX Lazy portfolio would be a simple ETF that can give either an income or offer a dividend re-investment plan option. I would also require it to have very low fees. So far my choice is the Vanguard Australian Shares Index Fund VAS. It tracks the S&P/ASX300. It offers a DRP, the dividends are currently franked at 30%. Its management fee is a very competitive 0.14%. There is no hedging if the market falls with just a local Index fund ETF, but I take long term views with all my investments. I am happy to sit and wait if it falls, it will still be paying a dividend. If you set it up with a DRP over the years you will gain a solid compounding effect which will work in your favour if there is a big dip in the market.


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## Darc Knight (21 October 2018)

Ann said:


> My choice of ASX Lazy portfolio would be a simple ETF that can give either an income or offer a dividend re-investment plan option. I would also require it to have very low fees. So far my choice is the Vanguard Australian Shares Index Fund VAS. It tracks the S&P/ASX300. It offers a DRP, the dividends are currently franked at 30%. Its management fee is a very competitive 0.14%. There is no hedging if the market falls with just a local Index fund ETF, but I take long term views with all my investments. I am happy to sit and wait if it falls, it will still be paying a dividend. If you set it up with a DRP over the years you will gain a solid compounding effect which will work in your favour if there is a big dip in the market.




That's one of my current holdings, but I'm concerned about these "narrow" Shares Index Funds increasing Stock price too far above Intrinsic Value.


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## Ann (21 October 2018)

Darc Knight said:


> That's one of my current holdings, but I'm concerned about these "narrow" Shares Index Funds increasing Stock price too far above Intrinsic Value.




G'day DK, wouldn't argue with you on that point, I am currently feeling the same way about property.


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## systematic (21 October 2018)

When it comes to these types of question; I'm practically a mostly unashamed shill for Vanguards so-called 'Life-Strategy' product.  (Or similar, from another provider of your choosing).

Why?

Because if you're going to go _that way_ ('I wanna diversify, baby')...then do it all, and do it cheap.

These types of funds (Vanguard and similar) do it very well, I think.

Take the high-growth Vanguard (the obvious choice IMO...'high growth' might sound risk-taking to the general public, but not around these parts).  90/10 equities/bonds.  Buffett would smile, and I think (especially) a young person wanting to do some 'set-and-forget-because-seriously-I-am-way-too-busy-with-my-family-career-and-whatever-else-I-have-going-on' investing _could_ be well served just ploughing into something like this.  You get domestic equities; and international equities hedged, unhedged, small and emerging. 

Sure - there's lots similar.  You can cover all asset classes at once.  You can add funds that will do basic trend following (if that's your English breakfast), or do stuff that does some tilting toward so-called factors.  Heck, you can design your own philosophy (I'd recommend it!) and build your own ETF portfolio.  BUT - remember - someone has to manage it.  If you're the above, 'too busy' investor, or - just want to live by that philosophy - the good news is that there are so many options these day - low cost options, at that - to cater to that.  Good news, for sure.

Just my 2 cents


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## barney (21 October 2018)

Again, I am out of my depth in a thread like this but applaud those who are well versed enough to offer a sensible opinion ….. This is what @Joe Blow is asking for to keep ASF on the rails …..


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## SirRumpole (22 October 2018)

I like this thread, it suits my personality !

Keep posting here please.


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## PZ99 (22 October 2018)

When it came to set-and-forget ETF's I was happy just to stick with one which was the ASX:ZYUS low volatility fund set up by the ANZ bank. 

Divvies at around 5% a year, so less than the banks but growth over 3 years is better.



_
Then I got greedy with pennies _


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## aus_trader (22 October 2018)

SirRumpole said:


> I like this thread, it suits my personality !
> 
> Keep posting here please.



Ditto, Keep it up.

Although not to be used as a main allocation of wealth, a very small % of a lazy portfolio can be allocated to Gold as a portfolio hedge during times of crisis. I have QAU in the Medium/Longer Term Stock Portfolio and a lot of thinking has gone into making this choice as I want to leave it alone i.e. lazy. Reasons are in another thread Storing Physical Gold - Coins etc.

DK, thanks for starting this thread.


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## Darc Knight (24 October 2018)

_"Fidelity and Vanguard are breaking new ground in launching zero fee mutual funds and ETFs."

https://www.forbes.com/sites/carrie...-mutual-funds-and-etfs-are-here/#3e35612d5f6a
_


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## aus_trader (24 October 2018)

Darc Knight said:


> _"Fidelity and Vanguard are breaking new ground in launching zero fee mutual funds and ETFs."
> 
> https://www.forbes.com/sites/carrie...-mutual-funds-and-etfs-are-here/#3e35612d5f6a_



I am a little sceptical, is it possible? Since only way funds make money is through fees. Unless there is some hidden structure to make profit for them in offering these type of products.


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## CBerg (24 October 2018)

aus_trader said:


> I am a little sceptical, is it possible? Since only way funds make money is through fees. Unless there is some hidden structure to make profit for them in offering these type of products.



I’m not sure if Vanguard or Fidelity do it but others loan the shares to short sellers. I also think they use some of the index funds as loss leaders, lose a little on minimal fees products in exchange for the potential big fee active management funds.


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## aus_trader (24 October 2018)

CBerg said:


> I’m not sure if Vanguard or Fidelity do it but others loan the shares to short sellers. I also think they use some of the index funds as loss leaders, lose a little on minimal fees products in exchange for the potential big fee active management funds.



That'll make more sense. Thanks for the info, it makes me expand my view of these products. Like Given.


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## kenny (16 February 2019)

Sadly, late to this thread. Is the purpose of this Lazy Portfolio for minimally monitored capital growth or also serving to provide passive income?

Is it a worry that it replicates many of the older (but excellent) LIC's (eg Argo, AFIC, Milton) in holding large stakes in the Big 4 banks, TLS, BHP etc?


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