Daniel Sparks proposes a 20-year Vanguard portfolio for $10,000: $5,000 in an S&P 500 ETF, plus $2,500 each in dividend and growth ETFs. Combined fees are about $3 a year; his plan depends on holding through downturns.
The funds are Vanguard S&P 500 ETF (VOO), Vanguard High Dividend Yield ETF (VYM) and Vanguard Morningstar Growth ETF (VUG). Their expense ratios are 0.03%, 0.04% and 0.03%, respectively; VYM’s yield was about 2.2% at August’s end. VUG was renamed in late July, with no change to its strategy.
Over the past decade, VOO averaged roughly 15% annual returns, VYM about 12% and VUG nearly 18%. In the 12 months through August, they returned around 20%, 21% and 16%, respectively. Sparks cautions against assuming the decade-long pace will continue and says all three funds would probably fall together in bear markets.
