Two model ETF portfolios have been added.
This portfolio started with $10,000 on December 31, 2010.Â It provides asset class diversification using 14 ETFs (8 Vanguard and 4 non-Vanguard ETFs).Â The portfolio includes an equal weighting of US and foreign equities; large, medium, and small capitalization stocks; and U.S. and international REIT ETFs.Â The portfolio has a value tilt.
Vanguard ETFs offer particularly good value. It is mutual company (meaning it is member owned and has no shareholders) and its ETFs have low expense ratios.Â Unfortunately, Vanguard has some gaps in its coverage of international ETFs.Â So this model portfolio has included 4 non-Vanguard ETFs.
Under Vanguardâ€™s new ETF pricing, the total cost for setting up this portfolio would be $28, (4x$7) in commissions for the non-Vanguard IRAs, and an annual brokerage account fee of $20.Â The use of ETFs allows broad diversification with a relatively small amount of money.Â Most index mutual funds have a $3,000 minimum cash requirement.
This ETF portfolio also started with $10,000 on December 31, 2010.Â It consists of five Vanguard funds.Â It achieves simple but good asset allocation with equal weight of US and foreign equities. It includes large and small cap stocks with a value bias and a US REIT ETF.
Under Vanguardâ€™s new ETF pricing, there would be no commission charges for setting up this portfolio since all of the ETFs belong to Vanguard. There would be an annual brokerage account fee of $20.
Both portfolios are updated daily on Stockherd.com and can be viewed using the links on the menu bar.