Vanguard Life Strategy Funds

When it comes to investing your hard earned money into mutual funds, Vanguard is one of the best companies out there to help you do so. On top of being one of the biggest names in Mutual Fund companies, they also try to develop a large variety of different mutual funds that they think will help you earn money, and charge minimal fees. Some of the most popular general mutual funds they offer are the Life Strategy Funds. There are a few of these funds to choose from, so I’m going to outline what the different features are of each fund.

The first Vanguard Life Strategy Fund offered is the Vanguard Life Strategy Income Fund. This fund tends to be the safest and least risky of all the life strategy funds. The Life Strategy Income Fund is made up of primarily 30.3% stocks, 49.8% bonds, and 19.9% short term reserves. For this reason, this fund is primarily intended for people who want to invest the money for less than 5 years, as it contains more safe investments (bonds and short term reserves) and less risky investments (stocks).

The second Vanguard Life Strategy Fund offered is the Vanguard Life Strategy Conservative Growth Fund. This fund is still a very safe fund; in fact all of these funds really are fairly safe. This fund is made up of 50.7% stocks, 29.6% bonds, and 19.7% short-term reserves. This fund is primarily meant for investing money for over a 5 year period, as are most of the Vanguard Mutual funds.

The third Vanguard Life Strategy Fund offered is the Vanguard Life Strategy Moderate Growth Fund. This fund is similar to the previously mentioned Conservative Growth fund, but offers more stocks and no short term reserves. This fund features 70.4% stocks and 29.6% bonds, meaning that is meant for long term investing, and hopefully some good returns and dividends. This is not very risky, but more risky than the previously mentioned funds.

The final Vanguard Life Strategy Fund offered is the Vanguard Life Strategy Growth Fund, which is also similar to the two previously mentioned funds. This is considered the most risky of all the Life Strategy Funds, as it contains the greatest amount of stocks. This fund contains 90.2% stocks and 9.8% bonds. This fund is really meant for someone who wants to rely on the stock market for most of their dividends and capital returns. If the stock market were to crash, this fund would be hit the hardest, but in return if it were to skyrocket (which in the long term it should) you will also see the largest returns.

Overall I would recommend Vanguard Life Strategy Funds for anyone looking to invest, and it’s just a matter of personal preference which fund you choose. Vanguard also offers a large variety of other funds that you may be interested in as well. All of these numbers and facts are courtesy of the Vanguard Life Strategy Funds Semiannual Report of April 2009.