Low-Cost Expert Investment Portfolio (Kiplinger's Bob Frick)

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Low-Cost Expert Investment Portfolio (Kiplinger's Bob Frick)

For investors seeking good returns from accessible, low-cost funds
 65% Stocks |  35% Bonds | 


 Data through August 31, 2016

FUND NAME SYMBOL % OF
PORTFOLIO
YTD
RETURN
1-YR
RETURN
3-YR
RETURN
5-YR
RETURN
10-YR
RETURN
MAX LOAD EXPENSE RATIO
StockVanguard Small Cap Index InvNAESX15%10.97%9.23%9.65%13.78%8.33%none%0.2%
BondVanguard Total Bond Market Index InvVBMFX255.976.14.233.084.75none0.16
StockVanguard 500 Index InvVFINX257.7212.3912.1414.517.39none0.16
StockVanguard REIT Index InvVGSIX513.8225.4315.7813.36.73none0.26
StockVanguard Total International Stock Index InvVGTSX205.233.842.73.672.04none0.19
BondVanguard Inflation-Protected Securities InvVIPSX106.645.222.631.644.2none0.2
   1007.478.577.148.035.46 0.18
** Closed to new investors. # Closed to new investors; other share classes are available.
r Maximum redemption fee charged when you sell shares. s Front-end load; redemption fee may apply.
— Fund has not existed for the specified time. Source: Morningstar, Inc..

Kiplinger's Bob Frick challenged himself to construct a simple, low-cost portfolio that relies heavily to exclusively on index funds. The idea was to show that you don't have to use fancy investments to earn a good return. His package gained almost 23% in the 14 months through February 28, 2010 -- a solid result considering that a large portion was in bonds and that the portfolio was much less volatile than the S&P 500.

The portion in the REIT index fund gained a healthy 30%. Some colleagues at Kiplinger's rolled their eyes when Frick included real estate in his portfolio in 2009, given the drubbing the sector had taken before and during the financial crisis. But the point of crafting a simple portfolio, in his view, is to build a diversified investment plan that you stick with through good times and bad. You don't try to time the market if you want to keep your investments simple. Now the argument is being made that real estate investment trusts are overvalued.

Frick has made one small change to his original portfolio, reducing the allocation to Vanguard 500 Index, which tracks the S&P 500, from 25% to 20% and moving the freed-up cash into Vanguard Emerging Markets Stock Index. Given the fund's 67% gain over the 14 months, Frick doesn't expect big gains in 2010. However, it's clear that developing nations are growing much faster than the developed world, and over time, that should translate into better stock returns in emerging markets.